Sponsorship can be a game-changer for brands seeking to elevate their presence and connect with their target audience in a meaningful way. However, diving into the world of sponsorship requires careful consideration and strategic planning. To ensure your sponsorship venture is fruitful, finding the right partner is essential. Here are six crucial components of successful sponsorship planning that brands should prioritise when considering sponsorship for the first time.

1. Brand Alignment – Shared Attributes

The first and foremost element to consider in sponsorship planning is brand alignment. It’s not just about the visibility; it’s about shared values and synergy between partners. A successful partnership reflects the desirable values that audiences associate with a team or event, quickly applied to your brand. By aligning your brand with an event or team that shares your values, you can authentically demonstrate your brand's ethos, articulating it swiftly and effectively to your audience.

2. Brand Awareness – Making Your Mark

Sponsorship offers a unique opportunity to boost brand awareness significantly. Your partnership should enhance recognition and recall among your target audience. Consider Carabao, whose sponsorship of the Carabao Cup in England led to millions of people becoming aware of their energy drink. Sponsorship provides immediate growth in awareness that would otherwise be challenging to achieve, making it a powerful tool for emerging brands.

3. Positive Contribution – Shaping Perceptions Through Actions

While traditional advertising can increase brand awareness, sponsorship goes a step further by shaping audience perceptions and behaviours. A successful sponsorship partner doesn’t just promote their brand; they positively contribute to the event or community. By enhancing fans' enjoyment, supporting young talent, or benefitting the local community, sponsors can create a positive association with their brand. It's not just about being known; it's about being liked, as people tend to buy from brands they have a positive perception of.

4. Exclusivity – Standing Out in the Crowd

In a competitive market, exclusivity matters. Being the sole industry provider associated with an event amplifies your impact. Successful sponsorship planning is about identifying opportunities aligned with your values where your competitors are less active, allowing you to own that specific sponsorship category. By doing so, your brand becomes top of mind for the audience, ensuring your marketing spend isn’t wasted by being drowned out by competitors with larger budgets.

5. Targeted Approach – Reaching the Right Audience

A targeted approach is crucial to the success of any sponsorship. Rather than sponsoring the biggest event your budget allows, focus on smaller events that align closely with your values. Leveraging these events through your own media channels ensures your message reaches your specific audience. Integrating sponsorship details into your website, social media, company documents, and even employee email signatures creates a cohesive and targeted approach, minimising wastage and maximising impact.

6. Longevity – Cultivating Long-Term Partnerships

Successful sponsorships are not short-term endeavours but partnerships that grow over time. Look for teams and events where your involvement can evolve from a standard partnership to a headline partnership. Planning for longevity is essential. Consider long-term objectives developed in collaboration with the event organisers. By foreseeing growth opportunities and investing in them, your sponsorship benefits increase over time, providing a stable foundation for your brand’s growth.

In conclusion, sponsorship isn't just about putting your brand out there; it's about finding a partner that aligns with your values, amplifies your message, and helps you create a positive impact. By focusing on brand alignment, awareness, positive contribution, exclusivity, a targeted approach, and longevity, brands can forge successful partnerships that leave a lasting impression on their audience and contribute significantly to their growth and recognition in the market.

At The Sponsor, our dedicated consulting service is designed to help sponsors discover their ideal partnership. With our expertise, we guide brands through the intricate world of sponsorship, ensuring they find the perfect match for their values and objectives. For more information on how we can elevate your brand through strategic partnerships, click here.

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In the dynamic world of sports sponsorship, businesses face a critical decision: Should they swim with the giants and be a small partner of a renowned event, or dive into uncharted waters as the main sponsor of a smaller team? The choice is far from simple, it requires a thoughtful evaluation of the pros and cons associated with each approach as well as your organisation's sponsorship capabilities. This article aims to navigate the sponsorship landscape, uncovering the opportunities and challenges of being a big fish in a small pond or a little fish in a big pond to help you choose the right approach for your business.

Being a Small Sponsor of a Big Team

Picture this: Your brand's logo shining alongside the giants of the game—a dream for many sponsors. Opting to be a small sponsorship partner of a big team holds undeniable benefits. By harnessing the power of their strong brand name, your own marketing efforts gain instant credibility. You become part of an elite club, elevating your perceived stature among your existing audience and forging a deeper connection with them.

The perks continue. The hottest hospitality tickets in town and access to star players excite your loyal customers and create unique experiences that strengthen their loyalty and affinity for your brand. The association with a well-established team or event can also open doors to networking opportunities and collaborations with more prestigious brands.

Yet, caution is warranted. The glitz and glamour of big teams come with a downside: fierce competition and a sea of sponsors clamouring for attention. Standing out in this crowded space requires astute marketing strategies and a substantial investment of resources. Without dedicated efforts to leverage your sponsorship rights, you risk blending into the background noise and missing out on reaping the full benefits of the partnership.

Being a Big Sponsor of a Small Team

Now, envision a different scenario: Your company as the headline sponsor of an entire event. While their reach may not rival that of the giants, there are distinct advantages to consider. As the headline sponsor, your brand has the opportunity to make a monumental splash within the club's devoted fan base. Unleashing your marketing prowess in this intimate setting can create waves that extend far beyond the pitch.

A smaller team often possesses a fervent and engaged fan community. By aligning your brand with their enthusiasm, you can forge a deep emotional connection and cultivate loyalty. Your new partner’s eagerness to collaborate and support your sponsorship can translate into innovative campaigns and meaningful experiences that captivate both existing and potential customers.

Nonetheless, it's important to acknowledge that the overall reach may be limited compared to partnering with a big team. However, reach alone does not guarantee engagement and really, what is reach without engagement? Focusing your efforts on a specific audience allows for more targeted and personalised messaging, fostering authentic engagement that resonates with fans on a deeper level.

Deciding What’s Right for Your Business

The sponsorship conundrum of choosing between being a small fish in a big pond or a big fish in a small pond demands careful consideration. For established brands with experienced marketing teams and robust resources, associating with a big team offers the chance to amplify your brand's reputation and leverage existing customer loyalty. In this scenario, the success of your sponsorship more than ever will be determined by your ability to effectively leverage your rights to trademarks and other sponsorship rights.

On the other hand, if your goal is to drive new awareness within a specific audience, becoming the main sponsor of a smaller team can generate unparalleled engagement and brand affinity. Ultimately, brands must evaluate their objectives, available resources, and desired impact to make an informed decision in pursuit of achieving their marketing goals. In addition to deciding whether to be a big fish or a little fish the next question facing sponsorship marketers is whether or not it's better to investment the entirety of your budget with a single team or event or to broaden your partnership portfolio, read more on that subject in our article here.

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Sponsorship is exciting, whether it's seeing your brand front and centre of a major sporting event or entertaining guests at a live music festival. One not particularly exciting thing is pouring over clause 13.2, section 3, paragraph 4, of your sponsorship contract.

Getting the most out of a partnership starts by negotiating the best possible agreement for your company. Fortunately, The Sponsor has taken the time to uncover six key points to help you maximise the value of your contract and reduce the risk should things go awry.

1 Agreement Length

For most teams and events, finding new sponsors is hard. You may initially be wary when your partner tries to sign your organisation up for a longer-term deal. However, if you are at the point of negotiating contracts, we can assume the research and due diligence conducted of the team or event you intended to sponsor is thorough. If so, consider the opportunity to reduce your investment cost by making a longer-term commitment. Turning a three-year deal into a four or five-year partnership can reduce the annual cost of sponsorship by as much as 25%, providing a valuable boost to your activation budget.

2 Break Clauses

For even the most well-researched new partnership, there remains an element of risk. This is particularly true when sponsoring sports teams that can suffer a decline in media coverage and attendance due to relegation or failure to qualify. You will no doubt have set minimum KPIs to measure the performance of your partnership over time, so why not consider de-risking your investment by inserting break clauses should the most basic of these KPIs not be met?

3 Staggered Funding

Another essential factor to consider introducing to your sponsorship contract is staggered or performance-related funding. Like a break clause, performance funding allows sponsors to pay a lower initial cost with additional instalments should certain KPIs be met. Typically, these arrangements work well when partnering with teams or athletes competing in a knockout competition. If the partner is eliminated in the first round, the sponsorship cost you pay reflects the awareness you received. Similarly, if the team makes it to the final, be prepared to pay a higher sponsorship fee with add-ons for the brand awareness generated.

4 Exclusivity

Avoid the possibility of your sponsorship being diluted by your partner bringing in competitors. Which brands are and are not competitors of your business is a grey area, and your sponsorship partner will be keen to keep it as murky grey as possible. Define the brands you consider falling into this category by their services or by providing a blocklist of names. To further reduce the risk of competitors piggybacking on your investment, consider extending the exclusivity period after the expiration of your agreement if possible.

5 Intangible Assets

Brand logos and marks have many uses in your sponsorship activation. Be sure to know precisely what is and is not covered under your agreement and, where possible, maximise the scope of marks available to use in your campaign. Similarly, ensuring complete protection of your marks by setting strict brand guidelines covering how and where your logo can be displayed at various touchpoints is essential to maximising your partnership’s visual identity.

6 Termination

The clause you hope you will never need; termination is your emergency exit from a partnership that negatively impacts your brand. From Tiger Woods to the more recent racism scandal involving racism at Yorkshire Cricket Club, partnerships can sometimes backfire, resulting in a PR crisis; see our articles What to do when your sponsorship backfires and The brand ambassador checklist.

Should unforeseen circumstances happen, your sponsorship contract must have the option to sever all ties with your partner immediately. Seek to make your termination conditions as broad as possible, and always keep in mind the Charles Stross quote, “if my business partner was possessed by a brain-eating monster from beyond spacetime tomorrow, what is the worst thing they could do to me?”

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Men are from Mars; Women are from Venus. The term could just as easily be applied to marketing and finance professionals. One speaks a language of awareness, consideration and advocacy, and the other talks of compounded annual growth rates and EBITDA. For marketing and finance to agree on sponsorship impact, we must find some common ground. That common ground is brand value.

What is brand value?

Brand value calculates your brand’s contribution to generating revenue for the organisation.

It starts with an assessment of brand strength, the results of which are used to determine a brand royalty rate. The stronger the brand, the higher the royalty rate. For example, we expect to pay more for a t-shirt with the Ferrari logo than one with the Skoda logo. At this point, most of our marketing readers are still with us when talking of brand strength scorecards and royalty rates. Now for the bridge.

The determined royalty rate of each brand is applied to the forecasted revenues of the company. For example, if the company is predicted to turnover £500 million for the next five years and the brand-specific royalty rate is 1%, the brand revenue would be £5 million. Now for the finance bit.

That £5 million of future brand revenue is not money in the bank; it is subject to economic risk. We need to apply an appropriate discount rate to understand the present-day value of that future revenue. Discount rates assess the point at which your money is worth more today than in the future. Would you rather have £1 million today or £5 million in five years? After discounting our £5 million of future brand revenues, the figure we arrive at is a present-day value called brand value.

How does sponsorship impact brand value?

Sponsorship impacts traditional marketing measures such as awareness, familiarity, preference, and consideration. When calculating brand strength, these same measures are used alongside broader company metrics such as trademark protection, the share of voice, employee rating, and environmental and governance scores.

The uplift in these measures brought about by sponsorship increases the organisation’s overall brand strength. This has a knock-on effect on the royalty rate and, ultimately, the brand value. Using this methodology, marketers can demonstrate improvements in their traditional measures while highlighting the uplift in the overall brand and business value.

Measuring changes in Rakuten’s brand value resulting from sponsorship

Rakuten signed a four-year agreement to sponsor FC Barcelona for an estimated 220 million euros. Brand valuation firm Brand Finance tracked the impact of the sponsorship on key brand metrics using the above methodology. This research recorded a positive uplift in measures such as consideration.

When these uplifts were applied to the brand valuation methodology outlined, the result was an 8% increase in Rakuten’s brand value from €4.3bn to €4.7bn.

The process of evaluating sponsorship by conducting a brand valuation is not an easy one. However, marketing decisions, particularly sponsorship investment, are under greater scrutiny than ever. Presenting uplifts in awareness or media value equivalency won’t cut it in the boardroom anymore. So, before requesting sponsorship funds, consider putting some financial evidence in your corner; the results might surprise you. Here's why you must consider Market research and use this methodology to calculate ROI.

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According to research, sponsorship awareness begins to plateau after the second year of a partnership. How can sponsors continue to drive recognition and recall amongst fans and supporters beyond the initial stages of an association?

Below are five points to consider before, during and after your sponsorship to maximise the return on your investment.

1 Plan ahead

For some, this advice may come too little too late. Sponsorship is a long journey, and it requires long-term thinking. When trying to keep things fresh, we often develop new and different activation ideas from one year to the next. Not only can these activations create unforeseen costs, but they can also muddle the message.

Instead, consider how a longer-term theme can be embedded into your campaign from the start. A theme that sticks to the core message but allows for annual or seasonal changes to maintain engagement.

2 Consider utilising an ambassador

A great way to freshen up your partnership is by leveraging a brand ambassador to create new content. Brand ambassadors carry with them inherent positive associations and open up hard-to-reach audiences. Ambassadors can create unique fan interactions or activities in the local community, which can help boost brand awareness and engagement.

However, choose wisely; aligning your brand with an individual often carries more inherent risk than a partnership with a brand. Before cosying up to the team’s star striker, you may wish to consider our brand ambassador checklist.

3 Don’t use off-the-shelf solutions

Sponsors want to sell you their pre-existing packages. They are easy to implement from one client to the next and deliver predictable returns.

The temptation many of us fall into, especially in longer-term deals, is to apply these off-the-shelf solutions. These signage opportunities and activities have been seen by fans for years and have limited impact.

Sponsors need to find unique and creative ways to own the space or create a new space within the event.

4 Switch it up

Don't be afraid to switch things up if you notice declining engagement in your sponsorship activation. Yes, in an ideal world, we have a long-term strategy with pre-planned activation that creates continuous high levels of engagement. However, if this is not the case, the biggest crime is being too stubborn to admit when we are wrong.

If most of the budget has already been allocated, consider looking at low-cost fan engagement activities such as online competitions, giveaways, or pre and post-event entertainment.

5 Negotiate

It’s easier to keep an existing sponsor happy than to acquire a new one. Use this to your advantage by negotiating your rights. Sponsors are unlikely to give you more branding without increasing the associated fee. Still, you may find they are happy to accommodate your new activation idea, especially if your contract is expiring.

The benefits of long-term partnerships between sponsor and team are mutual and well documented. Considering the above points, you can help keep your partnerships fresh, increasing awareness and driving more significant interaction with fans.

Check out our article on the impact of memory on sponsorships, Have you forgotten your memory?

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