Sponsorship

Sponsorship is a sales promotion technique: a business pays towards supporting an event, a person or a team in return for having its name promoted. The business does not give the money away as a gift: it pays because it expects something back, such as its logo on a banner, on a shirt or on a livestream, and mentions in the organiser's posts and announcements. Because the business pays for this promotion, sponsorship is a paid arrangement, not free publicity.

For example, a mobile phone repair shop pays £2,000 to sponsor a local gaming tournament. Its name appears on the stage backdrop and on the livestream, and the organisers thank the shop every time they advertise the event.

Benefits of sponsorship

• Brand exposure to a large audience. Many people see the business name at the same time, often again and again over the event, for one fee, which raises awareness quickly.
• Targeting. A business can choose an event that its target market already attends or watches, so the people who notice the name are the ones most likely to buy. In the example, the shop's likely customers are teenage gamers, and those are exactly the people watching the tournament stream.

Limitations of sponsorship

• Bad publicity at the event. If the event is badly run, overcrowded or surrounded by a scandal, some of that negative feeling rubs off on the sponsor's name.
• Poor performance. When a sponsored team keeps losing, or a sponsored person behaves badly, customers link the brand with losing or with the wrong behaviour, and the brand image suffers.
• High cost. Popular events know businesses want the exposure, so they charge high fees. The fee is usually paid whatever happens, and there is no guarantee that people who saw the name will actually buy.