Why Companies Sponsor Events

At this point, it would be useful to look at reasons why companies become event sponsors. Meeting sponsors' needs is a critical element of sports or event marketing.

In 1992 I did a study of 280 events listed in the IEG Sponsorship Report from January 15, 1990 to November 16, 1992. For each event, I noted the company's stated sponsorship objectives.

In all, twenty different objectives were mentioned, with most companies identifying at least three or four. Although the list may not be comprehensive, it should give a good overview of sponsors' motivations.

I have included the percentage of companies which mentioned each objective. However, these percentages should not be treated as significant since the information is not based on survey response but merely on what was mentioned in a set of IEG Sponsorship Report articles.

100% Corporate ID

All companies planned to display their corporate or brand names or logos on event signs, buildings, equipment, programs, uniforms, and/or promotional materials.

 

54% Target Marketing

Many companies saw event sponsorship as a way to reach a self-selected audience, hopefully interested in purchasing the companies' products or services.

 

49% Promotional Tie-In

Many companies wanted to use an event as a theme to gain attention from the trade and/or to drive consumers into stores and dealerships. Typically companies offer special deals to both customers and retailers which are promoted through on-site displays and other forms of advertising.

 

29% Entertainment Opportunity

A number of companies mentioned that they would use an event as a place to entertain clients.

 

26% Sampling or Couponing Opportunity

A number of companies said they would use events as a way to encourage product/service trial, either by offering samples at the event, or, if that was inconvenient, by passing out coupons.

 

24% Awareness

Some companies wanted to use event sponsorship as a way to create public awareness of their brands or products.

 

22% Image

Some companies hoped event sponsorship would improve, enhance, or change their corporate, brand, or product image.

 

18% Usage

Some companies planned to use events to encourage purchase of their products (e.g., buy two items to get a free ticket to the event) or usage of their products (e.g., American Express will donate twenty-five cents to the local symphony every time you use your American Express card).

 

16% PR

Some companies cited public relations value (i.e., the newsworthiness of the event and/or the sponsorship) as a reason why they were sponsoring an event. They expected to see their company, brand, or product mentioned in media coverage of the event.

 

15% Contests

Some companies intended to use an event as a theme for consumer contests or sweepstakes.

 

13% Athlete/Celebrity Tie-In

Some companies planned to use event-connected athletes or celebrities for corporate appearances.

 

12% Demonstration Opportunity

Some companies planned to use an event to demonstrate or display their products/services.

 

9% Sales Opportunity

Some companies wanted to use an event for on-site sales or to generate sales leads.

 

9% Employee Incentive

Some companies planned to use event sponsorship to benefit employees (i.e., as a morale builder, production incentive, or entertainment vehicle).

 

8% Community Relations

Some companies wanted to sponsor events as a way to enhance relationships within a community.

 

7% Mailing List Generator

Some companies hoped to gather names at an event to develop a mailing list or database of consumers.

 

6% Business-to-Business

Some companies wanted to use event sponsorship as a way to market to other businesses.

 

3% Contact with Executives

A few companies hoped to reach top executives in other companies as a result of event sponsorship.

 

1% Recruiting

Two companies mentioned that event sponsorship would enhance their recruiting efforts.

 

>1% Consumer Involvement

One company said it was using a cause-marketing effort as a way to maintain a relationship with consumers. (The company felt it would further consumer "involvement".)

Most of the twenty objectives listed above fall within the four major marketing/marketing communication vehicles: sales (client entertainment; sampling and couponing; demonstrations and displays; on-site sales; mailing lists; business-to-business contacts), promotion (promotional tie-ins; product usage; contests), advertising (corporate ID; target marketing; awareness; image; athlete and celebrity tie-ins), and public relations. Sponsorship money to achieve these objectives would most likely come from a company's marketing or marketing communication budget.

Five other objectives (employee incentives; community relationships; reaching other executives; enhancing recruiting; increasing consumer involvement) are goodwill measures. Sponsorship money to achieve these objectives might come from a company's human resources, community relationship, or philanthropic budget.

It is important to keep in mind that over the years corporate sponsorship objectives have changed.

In the 1970s sports sponsorships were often seen as a way to gain visibility for companies (such as cigarette manufacturers and distilleries) which couldn't or chose not to advertise on television. Then sports sponsorships (especially golf and tennis tournaments) were a popular way for CEOs to rub shoulders with their favorite athletes.

In the 1980s sports and event sponsorships 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 which demonstrate a positive return on their sponsorship investment.