Sponsorship

Sponsorship is when a business pays to support an event, person or team in return for promotion of its name or brand. The sponsored activity might be a local sports club, a school competition or a music festival. In return, the business usually gets its logo on kit, signs or programmes, and may be mentioned in announcements.

Why businesses sponsor

Sponsorship can raise awareness by putting a brand in front of the people who attend or follow the activity. It can also associate the business with that activity's values, such as health, teamwork or creativity. If customers trust the event or team, some of that trust may pass to the sponsor, which can build credibility. Sponsorship also lets a business reach a particular audience - for example, a skateboard shop sponsoring a youth skate contest gets its name in front of young skaters and their families, who are likely customers.

A commercial arrangement

Sponsorship is not a donation. A donation is given without expecting publicity, whereas sponsorship is a commercial arrangement in which the business expects something back, such as logo space, announcements or tickets to give to customers. The business should therefore judge whether the publicity it receives is worth the money it pays.

Costs and risks

Sponsorship can be expensive, especially for large events, and the publicity may not lead to enough extra sales to cover the cost. There is also a risk if the association is unsuitable or unpopular. Imagine a family bakery sponsors a motocross team whose riders are known for dangerous stunts. If local parents think the sport is too risky, the bakery's family-friendly image could suffer. A good fit between the brand and the activity matters, because customers notice who a business chooses to support.