Sponsorship means paying another organization to feature your brand name/logo in some of their marketing. Sponsorship enables a brand to sell to or communicate with the fans, followers, supporters or visitors of the entity being sponsored.
 
Sponsorships can range from:
-       a local shop sponsoring the village fete
-       a national brand sponsoring the country’s favourite TV program
-       a global brand sponsoring the Olympic Games
 
Reasons for using sponsorship fall into the five main categories shown in the illustration:

INCREASE BRAND NAME/LOGO SALIENCE
 
Sponsorship can be a good way to increase or maintain the salience of your brand’s name and logo. Car manufacturer Hyundai has sponsored a wide range of high-profile sports teams, events, and organizations, including the FIFA World Cup, The Australian Open, and the National Geographic Society, to increase brand name familiarity. Many new media channels have emerged over recent years resulting in few channels commanding a large audience on their own. Sponsorship of major sporting events remains an effective way to reach a mass audience, making it an attractive proposition for big brands. Global properties can be particularly appealing to international brands. Since these properties are understood in a similar way in every region, marketing campaigns to leverage the sponsorship can be developed centrally and used everywhere, with little need for local adaptation.
 
Sponsorship tends to work best for brands that are already well known and where the connection to the sponsored entity is obvious - BMW and motorsport teams in the Deutsche Tourenwagen Masters, for example.
 
The effect of sponsorship can be amplified by using it as an opportunity to tell stories about your brand or explain its features and benefits. These stories can be shared via social media and PR activities. For example, Nike often sponsors athletes during the Olympic Games. They create inspiring stories around these athletes, highlighting their journey, dedication and commitment to excellence. Nike shares these stories through short films or documentaries on social media platforms.
 
Sponsorships can also be used to extend the life of a marketing campaign by reminding people of the campaign via a key visual or slogan. From 2009 to 2012, Barclaycard sponsored the music festival Wireless, providing contactless payment wristbands to attendees. After the event, many people kept these branded wristbands as souvenirs, reminding them of the event and Barclaycard’s sponsorship.
 
REACH A SPECIFIC TARGET AUDIENCE
 
Sponsorship can be an effective way to engage with target audiences that are otherwise hard to reach. Bulgari, a brand that makes luxury jewellery and watches, has often sponsored the Cannes Film Festival. The festival is attended by celebrities and high-net-worth individuals who are interested in film, fashion and luxury lifestyle. These people match Bulgari’s target audience perfectly. Likewise, the well-known diapers brand Pampers has been a major sponsor of Mumsnet.com, a website dedicated to new parents. The sponsorship has included providing competition prizes, expert Q&A sessions, and contributing to the costs of live events.
 
ENHANCE YOUR BRAND IMAGE
 
If you have a clear idea about how you want people to think and feel about your brand, you can identify a sponsor to match these aspirations. Your brand will appropriate some of the sponsored brand’s values by association. For example, by sponsoring Formula One, Rolex reinforces its status as a well-engineered, glamourous brand for the rich and famous. Sponsoring a popular or highly respected organization can enhance a brand’s credibility. For example, the German supermarket chain Lidl has sponsored organizations in the UK such as The British Heart Foundation and The Prince’s Trust. This has helped the brand become more widely accepted and respected amongst UK consumers.
 
REINFORCE YOUR BRAND PURPOSE
 
If your brand exists to fulfil a purpose, sponsoring relevant organizations is a good way to highlight your commitment to the cause. The outdoor equipment retailer Patagonia exists to help people enjoy the great outdoors whilst protecting it for future generations. The brand shows its commitment to this ideal by sponsoring a variety of individuals, athletes and organizations who share their passion for environmental and social activism, and who are involved in activities such as climbing, surfing, skiing and snowboarding.
 
PROVIDE SELLING OPPORTUNITIES
 
If you are a fast-food chain, a sponsorship deal with a sports organization might include exclusive rights to sell food at their events. The value of these sales should be factored into your decision about whether to become a sponsor. Sponsorship deals may also include the ability to leverage the customer database of the sponsored entity. This could be used, for example, to deliver advertising for your brand directly to fans of the brand you are sponsoring.
 
Sponsorships can also provide an opportunity to build relationships with people who are able to support your business goals. Inviting stakeholders to an exclusive event that your company sponsors can enhance your company’s reputation and allow you to discuss concerns or potential partnerships.
 
While there are many good reasons for using sponsorship, there is a risk that the decision will be made for the wrong reasons. The CEO may be keen to sponsor an organization or event they are passionate about, but the deal won’t always align with the best interests of the brand. Sponsorships have the potential to boost employee morale, but there may be better ways of using the money to achieve this. Marketers need to make sure that the sponsorships they invest in will fulfil a clearly identified strategic need.