The growing cost of advertising has forced many smaller enterprises to look towards sponsorships as a means of getting their brand across, especially for local businesses who view sponsorship as a contribution to their community as well as an avenue of promotion.
The worth of a sponsorship isn’t always easy to determine. Business owners can get a good feeling seeing their company’s logo circulating around a car racing circuit or on the backs of a junior football team, but are they really getting their money’s worth? If so, what’s the real return they’re getting on their investment?
JEM Promotional Products advises small businesses on how best to spend their sponsorship funds: “The promotional marketing dollar is possibly the most analysed expenditure any business ever embarks on and rightfully so.
“A return from the investment is crucial, especially in the early stages of setting up a new business. This is when the local market is most important, in the establishment of brand awareness.” (jempp.com.au)
Every sponsorship, no matter how small, needs to be evaluated and its contribution to the business identified. Apply the same sort of criteria to sponsorships that are applied to other marketing activities like advertising.
Consider the Total Audience
Any exposure at an event is naturally limited to the number of people who attend the event. Sponsors of a one-off event like a concert or community picnic can get a head count from the organisers, preferably supported by ticket sales.
An activity that has additional flow-on exposure – perhaps an event that’s televised for example, will yield a bigger audience. This doesn’t mean that the sponsorship will have as great an impact on the television audience as it did on those attending the event, but it will add to the overall value.
Calculate the Percentage of Total Impact
It’s also necessary to calculate just how much of the total impact has been received. For example, a sponsor puts their logo on the uniforms of a football team. There are two teams on the field and the members of the team being sponsored have four logos on their uniforms. In very simple terms one logo is around 1/8th of the action.
For the sponsor of a race car with four sponsors’ identification on the body, if there are twenty cars in the event they’ve got about 1/80th of the action. This is a rough way of looking at it but every sponsorship represented is vying for attention.
Of course, sponsoring the winner of an event increases the recognition factor significantly. That’s why sponsors of champions always pay a lot more than those who sponsor the ‘wannabes’.
Know the Frequency of Exposure
Repetition will give any sponsorship greater value. Many exposures over a number of events build awareness and have longer-lasting value than a single exposure. In the area of sporting sponsorships, supporting a team for the full season is a good way to go.
Aim for the Multiplier Effect
A combination of sponsorship and advertising can create a ‘multiplier’ effect where one builds on the other. Sponsoring a presentation by a local theater group and supporting it with an advertisement in the program will consolidate the impact of the total expenditure.
Sponsoring the team on the field with logos on its uniforms can be supported by advertising signage at the ground. This kind of synergy can multiply the impact on the audience that attends.
Always Activate the Sponsorship
There’s a general rule-of-thumb that for every amount spent on sponsorship an equivalent amount needs to be spent to activate it.
This can mean a business using funds to pay for customers to attend an event it sponsors, PR activities to highlight its association with the event, and any other efforts that will call attention to the event and the company’s sponsorship of it.
The Encyclopedia of Business suggests: “Possible ways to promote events sponsorship include billboards, print and broadcast advertisements, and direct mail. Sponsoring companies may also find it helpful to issue press releases about the event to the media, as well as to contribute articles and editorials to publications that reach the target audience.
“Marketers of consumer products may also engage in joint promotions with retailers, such as coupons and tie-ins. (‘Corporate Sponsorship’, referenceforbusiness.com, accessed 20 June 2010)
Sponsors Can Ask for Other Benefits
If the sponsorship is of an event that’s put on by a group with a mailing list, be sure to negotiate the chance to send everyone on the list a message about the sponsorship. Perhaps make them a special offer or just have an awareness-building prize drawing at the event.
Based in Ireland, Mark Nagurski is a small business marketing consultant. He says that it’s most important to ensure any sponsorship aligns with the company’s prospective customers’ interests and values: “To create the perfect sponsorship package, it’s often better to do the approaching as a potential sponsor rather than wait to be approached.
“To help generate some unique sponsorship ideas, start by asking yourself what matters to your customers (outside your business) and then look for opportunities to get involved – and events and organisations to get involved with.” (‘Using Big Business Sponsorship Ideas to Market Your Small Business’, smallbusinessbranding.com)
Conduct Research to Monitor Sponsorships
Most sponsorships are conducted to raise awareness and create or improve the image of a business. Conducting market research to get a benchmark before the event, then following up with further research after the event will tell how effective the sponsorship has been.
This is the best way to obtain metrics that can answer the question of whether the sponsorship is really having the impact the business wants – and has paid for.