Sponsorship can be the most effective form of marketing when handled well. It can become a nightmare when handled badly! Read here about what isn’t sponsorship – it is actually something else – and how you can clarify your understanding.
The public relations literature hardly mentions sponsorship, partly because it may be considered more of a marketing responsibility than PR/comms. However, many sponsorships are based largely on communication objectives and are therefore a responsibility of the PR/comms function. In fact, sponsorship is often one of the largest budget items in annual comms plans.
The modern commercial use of the term requires both the funder as well as the receiver to treat the support as a business activity with measurable value in marketing or communication terms.
Where the benefit offered does not provide genuine marketing or communication value, the activity is not sponsorship in a commercial sense. In other words, the ‘sponsorship’ is entered into merely as a token of support or goodwill, but could not be justified in terms of genuine marketing or communication results, so it is really a donation rather than a sponsorship.
Sponsorships are often confused with donations. A donation is a gift of product or cash with little or no expected return. It is ‘free money’ with no strings attached, and no return benefits or favors expected. Organizations are often asked to advertise in the program, catalogue, etc, whether online or offline, as a form of ‘sponsorship’. These types of advertisements provide no commercial return and therefore are actually donations.
The sponsorship has to provide a measurable dollar value in return to the supporter – a measurable return on investment just like any other financial commitment. The sought-after outcomes of sponsorships may also be enhanced relationships with key stakeholders – these need to be measurable as well, although they may be difficult to quantify if the expectation is of a tangible future return.
Cases become a grey area where there is a limited commercial return expected from the support – there is limited genuine marketing value – but the gesture may at least be providing some degree of commercial return. Probably a compromise is the best way to view these cases. The commercial return to the sponsor could be quantified as one component while the other component could comprise an agreed proportion of the funder’s financial commitment, which is written off as a donation. The sponsorship therefore offers a lower financial return than the overall amount invested by the funder.
Each of the following activities is not sponsorship because there is no reciprocal marketing or communication benefit to the funder, or because the activities require more than mere association between funder and the receiver:
Hospitality is the provision of entertainment, food and beverages for existing and potential clients in expectation of a closer relationship and a future commercial return. This does not involve the purchase of the right of association as defined in the term ‘sponsorship’.
To complicate matters, some of the above activities may be included as part of an overall sponsorship package in which other direct sponsorship benefits are provided.
There are circumstances in which sponsorship dealings are not recommended for ethical or other reasons. If you intend to seek sponsorship in any of the categories listed below, the final decision should be made only at the highest level – by your executive committee or board of directors (in the private sector) or Minister (in government), where:
My ebook, How to successfully seek corporate sponsorship, gives more guidance.
This article also gives further useful insights, especially if you are seeking support in the creative arts.
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