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A few days ago, a friend of mine came to tell me his
plan to visit one of the private banks for
sponsorship. In the middle of our conversation, I
asked him if he had prepared something to give them
in return so that his proposal could help them
attract additional equity from new shareholders, or
more money from depositors, if not also promote some
of their services in money transfer, make them open
new branches or even enhance their image.
To my utter surprise, he simply told me that did not
need to prepare such a document. The response
stunned me and just as equally caused me great
dismay.
For someone like me who thrives on the business,
approaching a sponsor without a well-compiled and
developed proposal that makes an offer lucrative by
ensuring that sponsors gain the equivalent return
for their investment is futile. Alas, my effort to
raise the issue with various people exposed me to a
strange understanding of how sponsorship ought to
work. This has lead me to boldly conclude that
sponsorship in Ethiopia is conceived more as an act
of charity as opposed to a business arrangement,
where its true value lies.
Elsewhere in the world, sponsorship is a
multi-billion dollar business. In particular, sports
sponsorships are growing in popularity and are used
as a promotional tool for the business community and
other institutions. It serves as a means for a
company to bring itself, or its products or
services, to the attention of consumers and present
them in a favourable light. For instance, in the
United Kingdom, companies spend more than one
billion pounds annually on such promotional
ventures.
Most businesses across the world have come to
heavily depend on sporting events as a means of
addressing various business interests. Corporate
sponsors, by associating themselves with a sporting
event, receive extensive benefits designed to
complement the corporation’s strategic marketing
objectives. The high level attendance (participant
and spectator) from sporting events and media
coverage guarantees that a sponsor’s support is
visible to a broad and diverse audience. That
enables a sponsor to enjoy a wide range of benefits
from a carefully selected sponsorship.
Sponsorship has historical roots, too. The wealthy
of ancient Greece used to support athletics and arts
festivals in order to enhance their social standing,
and members of the Roman aristocracy owned
gladiators for the same purpose.
Corporate sponsorship and its objectives have
evolved so much since then. In the 1970s, sports
sponsorships were often seen as a way to gain
visibility for companies (such as cigarette
manufacturers) that could not, or chose not to have
advertised on television. Then sports sponsorships
were a popular means for chief executive officers to
rub shoulders with their favourite athletes. By the
1980s, sports and event sponsorships also offered an
alternative to rising television advertising costs.
More recently, as sponsorship costs increase and
companies become more sophisticated about event
marketing, the focus has begun to shift to
incremental sales. Companies look for events that
demonstrate a positive return on their sponsorship
investment. As professionally delivered sporting
events start to emerge in large number, sponsors who
look for positive returns on their investment in
sport began to pay attention to the field. As a
result, the global expenditure on corporate
sponsorships, for instance, was five billion dollars
in 1989, and doubled in 1993.
Sponsorship today is a business deal between an
institution and a sporting events organizer who
enter into a joint venture to promote their mutual
interests. In return for their financial gain,
sports organisations allow the use of their names of
a popular event in commercial activities. Thus, it
becomes all about the provision of resources (money,
people, and equipment) by an organization (the
sponsor) directly to an individual, authority or
body (the sport), to enable the latter to pursue
some activity in return for benefits contemplated in
terms of the sponsor’s promotion strategy, and which
can be expressed in terms of corporate marketing or
media objectives.
Companies become event sponsors for different
business motives. This could be to gain a corporate
patronage that is a meeting point between donations
and sponsorship. Patronage generally provides only
some recognition of a company’s activities among a
relatively small, though influential, group. It is
more common in the arts than sport.
Or it could be to get corporate hospitality that
could give them an opportunity to meet customers and
contacts in informal, enjoyable circumstances to
pursue business objectives. Another motive could
also be to build public or community relations where
sport sponsorship can be used to meet objectives on
a company’s social or political agenda. In this
case, the aim will not be to sell products but to
improve a company’s goodwill and public image as an
employer, a corporate citizen or a contributor to
social welfare.
Looking at it from a slightly different perspective,
sponsorship can also take the form of a charitable
donation where no commercial return is expected;
even here, sponsors use sporting events to serve
them as a means of addressing social and health
messages that they stands for. This again helps
associations to be considered as an integrated
service promotional tool that will be all some
business arrangement.
In each case, sponsorship seeks to enhance the
messages by associating sponsors with an event or
team that shares similar qualities and values as the
sponsors’ brand. This relationship can be very
powerful because it is perceived as an endorsement
of the brand by an independent third party. In doing
so, obviously consumers are aware of the costs of
sponsorship but the message is conveyed in a more
subtle way than that of the more overtly paid-for
advertisements.
Sponsors look to sport to add value to the brand
proposition. In almost all sectors of markets, there
is intense competition among companies and brands.
Often, there is little to choose from in terms of
quality, content or price. In order to make a brand
stand out from the crowd, a sponsor would use sport
to create a unique position in the mind of the
consumer.
Some may believe that advertising is preferable over
sponsorship. As a matter of fact, advertising is the
most frequently used marketing tool and speaks to a
consumer in a direct way. It announces the
availability of a product and promotes a brand. It
can also provide information on product quality,
characteristics, price and performance. While
advertising and sponsorship are both channels to
building a strong brand relationship through an
association with sport, each communicates
differently with the targeted market.
Advertising delivers a clearly defined message in a
very controlled environment, communicating an exact
message in a pre-defined schedule of where and when
it would appear. That makes determining exposure
relatively easy. However, advertising is
non-interactive with the target audience who may
hear or see an advertisement but the brand does not
become part of the fans’ experience. This puts
advertising and sponsorship on different paths.
In contrast, the message a sponsor delivers varies
with the event audience based on their impression of
the event. Marketers turn to sponsorship to develop
connections between heart and mind. By leveraging
the emotional power of a personality, sport or
event, sponsorship creates a stronger bond between
its brand and the audience. The frequent appearance
of a brand name or logo establishes the company as
part of what that personality, event, or league
represents.
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