Sponsorship 101
"In the last decade a new discipline has emerged, and it's capturing the attention of the media, the corporate world, and academia - the business of sports. There are some exciting things happening in this business, and we thought it would be helpful for you to hear about them from The Authority in the industry"
- Bonham/Wills & Associates.
From the athletes promoting your favorite brands in commercials to the name of your favorite team's stadium (Coors Field) to the corporate-sponsored football games that you watch on TV (FedEx Orange Bowl), these are all strategies of the innovative thinking and hard work of sports marketing professionals.
Sports marketing allows corporations to associate their brands and products with the excitement, passion, and admiration that fans reserve for their favorite teams and athletes. For the athletes, sports marketing provides opportunities to interact with fans and to capitalize on the earning potential associated with celebrity. This industry, as a whole, derives its promotional techniques from fields such as advertising, public relations, and marketing.
Sponsorship is one branch of sports marketing. Sponsorship provides corporations with the ability to achieve their marketing goals through a unique approach in an environment that is interactive and exciting. Unlike traditional advertising, which is effective in creating the imagery and impressions that shape a brand's identity, sponsorship makes the brand "truly come to life." Sponsorship appeals to consumers on an emotional level, allowing people to develop a relationship with a brand, which results in higher customer retention and loyalty. This creates targeted, quality encounters with consumers, and it gives companies high-profile identification and affiliation with a prestigious property - an association that builds brand equity. Sponsorship marketing provides an exciting environment for companies to reach consumers, and that excitement adds "sex appeal" to the product or service. Companies sponsor particular events for the borrowed imagery and the soul of the property, as well as to tap into consumer emotions. As the fans' relationships with the team develop and deepen, so do their feelings toward those companies associated with the team.
Sponsorship also enables a corporation to break through the clutter of traditional advertising. It offers a platform for companies to develop ties where their competitors who do not have a strong presence; and together with advertising, sponsorship can give companies another dimension for a balanced, comprehensive approach to product marketing. In this regard, sponsorship works in synergy with the rest of the marketing mix. It gives a corporation the opportunity to complement all of its marketing efforts and leverage its sales objectives by creating an integrated marketing program through the use of multiple exposure vehicles.
Sponsorship Glossary
ACTIVATION SPENDING - the program of allocating marketing dollars to increase the impact and effectiveness of a sponsorship - for example, promotional support, direct media, etc. Similar to Leveraging
ADI (Area of Dominant Influence) - a television market as delineated by the Arbitron Company. See also DMA.
AMBUSH MARKETING - a marketing strategy whereby a non-sponsor attempts to capitalize on the popularity/prestige of a property by giving the false impression that it is an official sponsor. Often employed by the competitors of a property's official sponsors. Many in the sponsorship industry consider this strategy unethical.
AUDIO MENTION - the mention of a sponsor/company during a TV or radio broadcast.
BILLBOARDS (Opening/Closing) - the exposure a company receives during a broadcast coming into or exiting a commercial break; typically consists of a logo and tag line.
BRAND INTEGRATION - organically weaving a brand into movie, TV or video entertainment and/or related marketing or promotional campaigns. Similar to Product Placement.
BUSINESS-TO-BUSINESS SPONSORSHIP - programs intended to influence corporate purchase/awareness, as opposed to individual consumers.
CATEGORY EXCLUSIVITY - the right of a sponsor to be the only company within its product or service category associated with the sponsored property.
CAUSE MARKETING - promotional strategy that links a company's sales campaign directly to a nonprofit organization. Generally includes an offer by the sponsor to make a donation to the cause with purchase of its product or service. Unlike philanthropy, money spent on cause marketing is a business expense, not a donation, and is expected to show a return on investment.
CO-SPONSORS - sponsors of the same property.
COST/VALUE RATIO - the cost of the sponsorship divided by the value attributed to the sponsorship.
CPM (Cost Per Thousand) - the cost to deliver a message to a thousand people, households, etc., using a particular advertising medium. For example, a 30-second network TV ad might have a cost of $8 for each thousand viewing households.
CROSS-PROMOTIONS - a joint marketing effort conducted by two or more co-sponsors using the sponsored property as the central theme.
DASHERBOARD - signage panels located on the boards surrounding a hockey rink.
DEFENSIBLE VALUE - the exposure value of a sponsorship before accounting for the effects of influencing factors. See also Market Value and Influencing Factors.
DISCOUNTED RATE CARD - 15-20% off of rate card; less than the published cost. Dependent upon the buying clout of an advertiser, it can typically expect to pay less than the published rate card.
DMA (Designated Market Area) - a television market as delineated by the A. C. Nielsen Company; designated by number of television households, population, etc.
DORNA - see Rotational Signage; DORNA is the best known brand of rotational signage.
EDITORIAL COVERAGE - impressions generated by news coverage (print, TV, radio, Internet) of the event, facility, etc., that includes mention of the sponsor.
ESCALATOR - a percentage increase on sponsorship fees year to year in order to account for an increase in inflation or the cost of benefits provided to the sponsor. Typically an escalator ranges between a 3% and 5% increase each year.
EVENT MARKETING - promotional strategy linking a company to an event (sponsorship of a sports competition, festival, etc.). Often used as a synonym for "sponsorship." The latter term is more general however, because not all sponsorships involve an event.
FASCIA - signage typically found on the facade of each deck of a facility (in front of the first row of seats on that level).
FEATURES - in-broadcast exposure typically dedicated to a sponsor and consisting of the sponsor's name and/or corporate logo identification shown with information about the event (athlete biographies, score updates, facts, etc.).
FIRST RIGHT OF REFUSAL - contractual right granting a sponsor the right to match any offer the property receives from another company for the same sponsorship during the renewal period.
FULFILLMENT AGENCY - an agency whose primary service is to implement sponsorships; in other word, make sure all of the marketing efforts, signage, etc., tied to the sponsorship are executed.
GRASS ROOTS PROGRAMS - programs aimed toward participants of sports activities and targeted toward the general public (youth soccer, Hoop It Up, etc.).
GROSS RATING POINTS (GRP) - percentage of the total population reached by a commercial or programming; usually radio. For example, 300 GRP's means that everyone within the region of a marketing campaign was reached three times.
HALO EFFECT - In a sponsorship context, a halo effect is the ability of a brand to be perceived as a sponsor of a property (event, team, league, etc.) when this is not actually the case. This is usually due to the brand's ubiquitous marketing (especially in a related context) and its resulting prominence in the marketplace.
HIT - Same as Page Hit. The number of files (i.e., graphics, audio/visual files and other supporting files) that are requested from the server. For example, if a site has one web page with five graphics on it, every time a user visited that page, it would be reported that six hits (one for the page and five for the graphics) and one page view had occurred. For this reason, hits are not a good indication of web traffic. Compare with Page View.
HOSPITALITY - hosting key customers, clients, employees and other VIPs at an event. Usually involves tickets, parking, dining and other amenities, often in a specially designated area, and may include pro-am spots, backstage passes, etc. (Also know as Client Entertainment.)
IMAGE ASSOCIATION - the degree to which a property can create, enhance and/or renew the image of a company or its product(s) through sponsorship.
IMPRESSION - the exposure one receives to a sponsorship or media vehicle that communicates a message through an external influence or image, and which affects the feeling, sense or mind of the individual receiving the exposure; any time a consumer is affected by a targeted corporate message.
INFLUENCING FACTORS - decreases or increases in the defensible value of a sponsorship based on market factors. Long-term factors are those characteristics of the sponsorship property, its industry or the marketplace that will permanently affect the price at which the property can sell its sponsorships. Short-term factors are those characteristics that will affect the initial price but then decrease and eventually disappear over time. See also Defensible Value and Market Value.
IN-KIND PAYMENT - a payment (full or partial) of the sponsorship fee made in the sponsor's goods or services rather than cash. For example, Motorola may pay a portion of its sponsorship fees by providing the property with communication equipment.
ISOTONIC BEVERAGES - sports drinks (Gatorade, PowerAde, etc.); part of soft drink category.
LEVERAGING - marketing dollars spent in support of a sponsorship above and beyond the basic sponsorship fees. See also Support Spending.
LICENSING - right to use a property's logos, images and characters on merchandise or in advertising. (Note: while a sponsor will typically receive the right to include a property's marks on its packaging and advertising, sponsors are not automatically licensees.)
LOCAL OVER-THE-AIR - network affiliated or independent television stations that anyone can get via an antenna (theoretically).
MARKET VALUE - the defensible value less a percentage based on any influencing factors; the amount that should be received in today's sponsorship marketplace. See also Defensible Value and Influencing Factors.
MAKE-GOODS - benefits provided to sponsors/advertisers to make up for a property's poor performance in delivering value to sponsors. Often sponsor contracts include minimum guarantees on the property's performance (attendance, TV ratings, etc.). If the property falls short of these goals it may have to make up the decrease in value through other benefits.
MEDIA BUYBACK - when the property has to purchase radio or television inventory from a broadcaster in order to give the sponsor ad spots as part of the package. This is a cost the property incurs to deliver the sponsorship and is subtracted from the gross fees of the sponsorship.
MEDIA EQUIVALENCIES - measuring the exposure value of a sponsorship by totaling the seconds of coverage it generated and calculating what it would have cost to buy a like amount of ad time or space in those outlets based on media rate cards. TBG does not agree with this methodology because it does not take into consideration the quality of the sponsor's exposure.
MEDIA SPONSOR - TV and radio stations, print media and outdoor advertising companies that provide either cash, or more frequently advertising time or space, to a property in exchange for sponsor benefits.
MUNICIPAL MARKETING - a marketing strategy that links a company to community services and activities (sponsorship of parks and recreation programs, libraries, etc.).
NAMING RIGHTS - a type of sponsorship in which a corporation purchases the right to name a venue (Coors Field, Pepsi Center, etc.) and obtain marketing benefits associated with the venue and its tenant(s).
NEW AGE BEVERAGES - waters, teas, etc.; part of the soft drink category.
PAGE HIT - Same as Hit. The number of files (i.e., graphics, audio/visual files and other supporting files) that are requested from the server. For example, if a site has one web page with five graphics on it, every time a user visited that page, it would be reported that six hits (one for the page and five for the graphics) and one page view had occurred. For this reason, hits are not a good indication of web traffic. Compare with Page View.
PAGE VIEW - The number of pages viewed by one visitor, not including the supporting graphic files. Page views are often used in online advertising, where advertisers use the number of page views a site receives to determine where and how to advertise.
POINT-OF-PURCHASE (POP) / POINT-OF-SALE (POS) DISPLAYS - signage, typically supporting a promotion, that is placed at the location where purchases are made (typically at the register).
POST-MIX - soft drink product (syrup) that must be mixed with carbonated water at point of sale to make fountain beverages. The volume of post mix product dispensed is typically presented in five-gallon units. See also Pre-mix and Vending.
POURING RIGHTS FEE- the fee paid by a beverage company for the right to pour product at a sporting event, venue, etc.
PREMIUMS - souvenir merchandise produced to promote a sponsor's involvement with a property (customized with the names/logos of the sponsor and the property). For example, mouse pads, posters, etc.
PRE-MIX - soft drink product that is already mixed (syrup and carbonated water) when purchased from a distributor. Pre-mix is used less often than post-mix, typically when fountain equipment is unavailable. See also Post-mix and Vending.
PRESENTING SPONSOR - the sponsor that has its name presented just below that of the sponsored property (and secondary to title sponsor, if there is a title sponsor). For example, The Rose Bowl, presented by AT&T.
PRIMARY SPONSOR - the sponsor paying the largest fee and receiving most prominent identification (Would be title sponsor if sponsored property sold title.)
PRODUCT PLACEMENT - when a corporation or property pays to have its products or services seen or used organically in mediums such as movies, video games or on TV. Sometimes known as Brand Integration or Branded Entertainment.
PROPERTY - see Sponsorship Property.
PROPOSAL - a document that describes the benefits or services that the issuer will provide for a specified fee.
PSLs (Permanent Seat Licenses) - a fee that is paid to a team/franchise that gives the owner of the PSL a license that gives the individual the right to purchase season tickets for that seat.
RATE CARD - published advertising costs.
RATING - the percentage of the broadcaster's total television households watching a broadcast. For example, a five rating means that five percent of the households that could receive a broadcast actually watched it. See also Shareand Total Household Reach.
REQUEST FOR PROPOSALS (RFP) - a document distributed by a property to solicit interest in a sponsorship or providing services. The property is requesting that corporations interested in the opportunity submit a proposal. See alsoProposal.
RETURN ON INVESTMENT (ROI) - the value received (as defined by sponsor: sales, benefit value, brand awareness, etc.) from an investment.
ROTATIONAL SIGNAGE - signage, typically found in prime locations at basketball and baseball games, that rotates through various sponsors (also commonly found at AVP sites around the court). Typically found on the scorers' table during basketball games.
SELF-LIQUIDATING COMPONENT - the ability of a corporate sponsor to offset a portion of its sponsorship cost by generating sales directly tied to the property or its attendees. See also In-kind Payments.
SHARE - the percent of television households (with a TV on) tuned to a particular program. See also Rating and Total Household Reach.
SIGNAGE - banners, billboards, electronic messages, decals, etc., displayed on-site at events, etc., that contain sponsor identification.
SOFT DRINK SPONSORSHIP RATIO - this is the ratio that Bonham/Wills & Associates has developed based on its negotiations to better understand what soft drink companies are willing to pay in sponsorship fees based on the volume (in dollars) of product sold at that property.
SPONSORSHIP - the relationship between a sponsor and a property, in which the sponsor pays a cash or in-kind fee in return for access to the exploitable commercial potential associated with the property.
SPONSORSHIP FEE - payment made by a sponsor to a property.
SPONSORSHIP PROPERTY - a unique, commercially exploitable entity (typically in sports, arts, events, entertainment or causes); any entity or organization that seeks additional revenue through corporate sponsorship; for example: leagues, teams festivals, facilities (stadiums, arenas, convention centers, theaters), municipalities, etc.
SPORTS MARKETING - a marketing strategy that links a company to sports property (sponsorship of competitions, teams, leagues, etc.).
SUPPLIER - official provider of goods or services to a property in exchange for designated recognition. This level is typically below official sponsor, and the benefits provided are limited accordingly.
SUPPORT SPENDING - dollars spent by a sponsor beyond its fees to leverage their sponsorship commitment. For example, the purchase of an ad campaign by the sponsor that includes the property. Also known as marketing support, marketing activation dollars, etc. See also Leveraging and Activation Spending.
TARGET LIST - a list of desirable corporations that are potential sponsors to approach for sponsorship opportunities.
TITLE SPONSOR - the sponsor that has its name incorporated into the name of the sponsored property (e.g., Buick Open, Sears Cup). Top-level sponsor.
TOTAL HOUSEHOLD REACH (THR) - the total potential households that the broadcaster reaches. See also Rating and Share.
TOTAL RATING POINTS (TRP) - percentage of total population reached by an advertising campaign; usually television. See also Gross Rating Points.
TOTAL UNIVERSE - see Total Household Reach.
TOTAL VIEWING HOUSEHOLDS - the total number of households that watched a certain broadcast.
UNIQUE VISITOR - A count of a unique IP address, domain name or cookie, which are like online fingerprints, and are counted only once no matter how many times, within a given timeframe, the user visits the site. Different from hits or page views.
VALUE PER IMPRESSION - the value Bonham/Wills & Associates places on one impression. See Impression.
VENDOR - a company that supplies its products or services to another.
VIEWERS PER HOUSEHOLD (VPH) - the number of viewers watching the program in each household based on Nielsen research. The number varies depending upon the programming; averages 1.5 viewers per household for general sports programming.
VIGNETTE - a small presentation during a broadcast about a product, service or corporation.
VIRTUAL SIGNAGE - the insertion of signage electronically during a TV broadcast that is not actually present at the event.