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Sport
Sponsorship
Chapter 15
Introduction
• What is sponsorship?
– Cash and/or in-kind fee paid to a property in
return for access to the exploitable commercial
potential associated with that property
• One of most prolific forms of sport marketing
• Sponsorship fees often exceed $5,000,000 per year
and are structured as multiyear deals
• Provides a company with association, value,
exposure, and opportunities to leverage their
affiliation to achieve marketing objectives
History
• Origins traced back to ancient Greek Olympics
• Increasing commercialization of modern sports has led to
tremendous growth in sport sponsorship
– $11.3 billion spent on sport sponsorships in 2009
• 1984 Los Angeles Olympic Games
– Watershed year in the evolution of sport sponsorship
– “Less is more” sales strategy (President Peter Ueberroth)
• Signed a limited number of companies to exclusive
official sponsorship contracts
– The first Olympic Games to turn a profit for the host city
History: Reasons for Sponsorship Growth
• Increased media interest in
sports.
• Companies can “break
through the clutter” of
traditional advertising.
• Sponsorship can reach its
target consumer through
consumers’ lifestyles.
History: Reasons for Sponsorship Growth (cont.)
• Enable corporate marketers to reach specific segments, such
as the following:
– Heavy users, shareholders, and investors; or specific
groups that have similar demographics, psychographics,
or geographic commonalities.
• Today, sport sponsorship has become a discipline involving
serious research, large investments, and strategic planning.
• Buying decisions have become much more sophisticated,
requiring sellers to provide compelling business reasons to
the prospective sponsor.
• Return on investment (ROI)
Sponsorship Activation
• The sponsor commits financial resources in support
of its sponsorship through promotion and
advertising that thematically includes the sport
property’s imagery.
• The oft-cited rule of thumb for activating a
sponsorship is 3 to 1; that is, $3 in
advertising/promotion support for every $1 spent in
rights fees.
Sponsorships Trends
• Green Partners program that today numbers over 20
companies ranging from Eaton Electrical (which supplies
electric vehicle–charging stations) to MillerCoors (Mickle,
2013)
• Social media space
– Among the most active sponsors is the location-based
social networking site Foursquare, which over the past
several years has inked sponsorship arrangements with
sport properties ranging from the U.S. Open Tennis
Championships to the NFL, NHL, and Major League
Soccer (MLS) (Botta, 2013).
Sales Promotion
• A variety of short-term, promotional activities that
are designed to stimulate immediate product
demand” (Shank, 2009, p. 312).
• Efforts also aim at increasing brand awareness,
broadening sales distribution channels for products
or services, and getting new consumers to sample
products or services.
Sales Promotion: In-Venue Promotion
• Increase the amount of “value-added” benefits that
teams provide their paying customers
• Traditional giveaways: Sponsor underwrites the cost
of a “premium” item in exchange for its logo on the
item and advertising support that pre-promotes the
event
• Continuity promotions: Require fans to attend
multiple games to obtain giveaways
• Success of promotion varies widely based on time of
season, teams’ win–loss record, day of promotion,
opponent, and perceived quality of the item.
• Incremental increase in fans
Sales Promotion: In-Store Promotion
• Companies often leverage sponsorships at retail level.
• Premiums
– Merchandise offered for free or at a reduced price as an
inducement to buy a different item or items.
• Contests/sweepstakes
• Sampling
– One of the most effective sales promotion tools to induce
consumers to try a product
• Point-of-sale or point-of-purchase materials
– Used by marketers to attract consumers’ attention to their
product/service and their promotional campaign at the
retail level
• Coupons: Free-standing inserts (FSIs)
Cross-Promotion
• Joining together of two or more companies to capitalize on
a sponsorship is becoming increasingly popular and
effective.
• Creates more “bang for their buck” under the premise that
two sponsors working together can generate more interest
and awareness among targeted sport consumers.
– Codependent partners
• Used to gain exposure in nontraditional and unexpected
retail settings.
• It has become increasingly important to think outside the
box as to how sponsors can be joined to increase the overall
effectiveness of sponsorship investments.
Sponsorship Packages: Sponsor Benefits
• Exclusivity in one’s product or service category
• Official designations
– Leagues and teams offer multiple designations
tied to the sport and to the sponsor’s product or
service category
• Rights to utilize the sport organization’s intellectual
property in advertising and promotion campaigns
• Advertising support
• In-stadium signage and promotional announcements
• Access to tickets
• Potential new business through access and
opportunity
Sponsorship Packages:
League/Team Benefits
•
•
•
•
Rights fee
Multiyear commitment
Advertising commitment
Commitment to team-oriented promotions
Sponsorship Platforms
• Governing body sponsorship
– Entails securing “official sponsor” status
• Team sponsorship
– Appropriate platform for local/regional companies
or companies with smaller marketing budgets
• Athlete sponsorship
– Involves some type of endorsement of the
sponsor’s product or service
Sponsorship Platforms (cont.)
• Media sponsorship
– Companies that purchase advertising or
programming during sport-related broadcasts
• Facility sponsorship
– Enables companies to tie directly to the event
atmosphere
• Event sponsorship
– Tie directly to event atmosphere
• Sport-specific sponsorship
– Enables company to direct its sponsorship efforts
to a specific sport
Evaluating Sport Sponsorship
• Vital due to growing financial commitments
necessary to effectively activate sport sponsorship
programs
• No one exact formula for measuring ROI.
• For ROI, companies use the following:
– Internal feedback, sales/promotion bounce-back
measures, print media exposure, television media
exposure, primary consumer research,
dealer/trade response, and syndicated consumer
research
Evaluating Sport Sponsorship (cont.)
• The evaluation of sponsorships has become a necessary
component of the sport sponsorship process.
• Difficult to determine precisely how much incremental sales
are directly attributable to a specific sponsorship program.
• Many companies conduct periodic consumer surveys to
determine ROI.
• Companies often hire professional sport research firms to
perform media evaluation research that examines corporate
sponsorship and brand exposure through television and print
media coverage of sports events (Performance Research).
Sponsorship Agencies
• Many companies engaged in sport sponsorship
outsource the negotiation and/or implementation of
their sponsorship programs.
• They rely on agencies because they do not possess
the expertise, experience, or resources to negotiate
and implement sponsorship programs.
Current Issues
• Ethnic marketing
– Sport organizations have begun to adopt strategies to
target ethnic groups more effectively.
• Overcommercialization
– Do consumers have an emotional threshold for accepting
a constant bombardment of corporate names, logos, and
messages?
• Gambling
– Sport organizations have embraced gambling (LGEs) as
a growing source of sponsorship revenue.
Summary
• Sport sponsorship has evolved into a billion-dollar
industry that has grown increasingly competitive.
• Competition has heightened the necessary degree of
sophistication in the sales, implementation, and
servicing of sport sponsorships.
• Companies continue to place an increased emphasis
on the evaluation and measurement of the return on
their investment.