When people use the term, “sports marketing,” a large part of what they refer to is defined by sponsorship. Sponsorship is perhaps the oldest form of sports marketing. In Wilson’s 1988 essay entitled The Sports Business, the author cites the first instances likely dating back to Roman times where a prominent aristocrat might underwrite the cost of sporting events at the Coliseum in order to gain favor with the Emperor.
In Focus: Sports Sponsorships & Sales
Sports sponsorship is a broad field based on a basic business benefit principle. The two parties directly involved, a sports organization and a commercial organization, each have a number of benefits they seek. The sports organization, such as a team, league, or event, seeks financial investment, media exposure, or in-kind services.
Financial investments are sought in order to offset costs and provide revenue to pay expenses such as facility usage and player salaries. Media exposure such as radio or television coverage gives the sports organization more credibility and increases its attractiveness to other sponsors. Finally, in-kind services are sought as a second means to offset costs. An example of in-kind sponsorship is a sporting apparel company providing uniforms for a league in exchange for exclusive exposure.
The sponsor, for its own concerns, seeks one or more of five basic benefits:
Increased awareness – Sponsorships are a great way for a brand to get noticed by consumers. Benefits are especially prominent for emerging brands that have little awareness to start. A good example is Lenovo. This Chinese computer firm had very little awareness outside of Asia prior to signing on as a TOP sponsor of the Torino and Beijing Olympic Games. Associating with the global property has and will continue to expose the company to millions of consumers worldwide.
Image enhancement – A company looking to change, improve, or simply sustain a particular image can do so very effectively by aligning with the right property. Pepsi’s Mountain Dew brand is a prime example. By sponsoring events like the Dew Action Sports Tour, Mountain Dew is able to maintain its image as the drink of choice for alt-minded adolescent males. Conversely, image enhancement can also be sought by the property. In 2006, for example, Austria-based Red Bull bought Major League Soccer’s MetroStars franchise, as well as naming rights to the new stadium, and recognition as a corporate partner of Major League Soccer. The partnership brought European credibility to MLS, as well as a youthful edge to potentially draw in more action oriented consumers to the league.
Demonstration platform – Many sponsors of sports are functional or endemic, meaning that they are directly involved in the execution of the sports organizations’ product. Sporting goods companies like Nike or Rawlings are good examples. Both companies have major sponsorship deals which allow them to demonstrate their products, used in competition by high profile, skilled professionals in front of a wide audience.
Hospitality – Corporations are also attracted to sponsorship opportunities because the relationship grants them certain privileges like premium seating. These hospitality opportunities can be used to reward employees, entertain clients, or as promotional giveaways for customers.
Product sales or trial – Finally, sponsorship can grant a sponsor company the right to sell or give its product away, creating a direct connection with the fans and potential customers. Sporting events like marathons are common environments for brands such as Gatorade, a sponsor of the ING New York City Marathon, to give away samples.
A good resource on the dynamics of sponsorship, please consult Howard and Crompton’s Financing Sport, 2nd ed.