A sponsorship involves two main aspects:
- A transaction between a sponsor and a sponsor object, where the object receives a remuneration in return for obtaining the rights to be associated with the object.
- The sponsors marketing of this associate right(s).
Both activities are necessary if the licensee’s costs are going to be a meaningful investment.
The definition distinguishes between the activity to enter into a business agreement that gives rights to the sponsored object, and the activity of utilising this right. The term “reciprocity” is often used as a description of this activity. A sponsorship is thus an investment (money or services) in an object with the purpose to gain access to the commercial potential linked to the object. One can thus invest in the rights of an object, but the investment is worthless if one cannot market the cooperation towards the relevant audience. Marketing of the cooperation is what we often regard as “activation”
Sponsorship has changed from being about gifts and alms, to becoming a professional communication tool with return requirements. One can see a shift from focus on logo exposure to activating the audience where you access this in a more targeted manner.
A sponsorship is a cost-effective communication medium. It is a modern way to communicate the relevance and creating anchoring in the audience by letting them take part in the sponsorship. Sponsorships contribute to attention which in turn provides increased sales, positive publicity for the sponsor/product, motivation of employees and increased loyalty from customers. This sponsorship motives may act together or separately, but it is wise that you as the object note which motivation is linked to your event or concept.
Clarification on concepts related to sponsorship:
This is a sponsorship:
Barter: – (often called in-kind) – goods and services given in return, not money. Note that these goods and services must be charged with VAT (check with national legislations), so it is not completely “free”.
Branded content/experience marketing – Branded content is a newer form of communication medium, which blurs the line between advertising and entertainment. Unlike conventional entertainment, branded content is generally financed entirely by a brand or a company. Experience marketing is used for events and installations, film, video games, music, internet and television.
This is not a sponsorship:
Gifts – foundations/trusts, businesses, individuals or others that gives you money, without expectations or requirements for consideration, based on an application or a donation. This is charity/philanthropy.
Advertising – a tool in a company’s sales strategy to increase sales.
Corporal Social Responsibility (CSR) – the overall enterprise integration of social and environmental concerns into their daily operations. There may be a CSR strategy to work closely with the local community where the corporation has its main activities (business). This is a motive for sponsoring.
Support – government agencies that grant money based on an application.
Crowd funding – when several individuals (private persons) finance a project together based on voluntary work and/or own funds.