“In Haiti there’s no sponsorship process, there’s friendship. Even if you send the best sponsorship request that might give the potential sponsor the best return on investment, if you don’t have any acquaintance with the decision makers, there’s a great chance for your request to be rejected.” said the Art Director of a prominent Haitian marketing firm.
To understand this problem our editorial team analyzed multiple events from June to August 2011. The results were quite astonishing. Around 56% of sponsorship was questionable. Some sponsors supported events outside their targeted market, and it was difficult for others to figure out which benefits these companies gain from the support of these events.
First, let’s try to understand the concept per se. What is sponsorship? What’s its purpose?
The guru of Marketing, Philip Kotler, defines sponsorship as the act of “supporting an event, activity or organization by providing money or other resources that is of value to the sponsored event. This is usually in return for advertising space at the event or as part of the publicity for the event”
According to Robert Jackson and Steven Wood Schmader sponsorship serves 3 main purposes: First, they argue that supporting specific events allows your company to enhance its image and shape consumers’ attitudes toward your brand. Secondly, they point out that sponsorship generates sales by showcasing your product’s attribution to encourage the consumer to try your product.
Finally, Jackson and Schmader mention that sponsorship helps intensify visibility and brand awareness. When you are sponsoring an event where the media will be present, you might get widespread media coverage, also known as free press. It’s also the sponsor’s responsibility to maximize this advantage by having a comprehensive media campaign along with sponsorship to boost the regular media coverage obtained by the event’s organizers.
Why not sponsor event of friend or acquaintance?
From an ethical standpoint, it’s not appropriate to base your business relationship with third parties solely on friendship and acquaintance. If you are a marketing or sponsorship manager, you should avoid creating an impression of partiality leading to conflict of interest.
Secondly, you should remember that sponsoring an event is an investment. As a business owner or a marketing manager you must ensure that your marketing dollars are spent wisely. Your decision should not be based on a relationship, but on business metrics.
“Many believe marketing is a creative aspect of business, and that, consequently, its financial return is not measurable, note one analyst . Philip Kotler and Gary Armstrong, authors of Principal of Marketing, see it differently: “Given today’s tighter economy and shrinking budgets, marketers face growing pressures to show that they are adding value in line with their costs. Many companies, now view marketing as an investment rather that an expense. They expect marketers to account for results, in terms of both market impact and profits.”
In response, to this requirement marketers in developed countries came up with a concept called ROMI: “return on marketing investment”.
Gary R. Powell, a ROMI expert defines it as a metric used to measure the overall effectiveness of a marketing campaign to help marketers make better decisions about allocating future investments. According to him, with the right data and analytics, marketers can deliver between 8% to 15% increased revenue, profit and market share to the client without any increase in marketing investment.
To make an effective sponsorship decision as a marketing manager, you should follow a simple three-step process to make your mind up on what and how to sponsor.
First, analyze your business environment. What are the trends in your industry? Are competitors already doing this and what advantages are they gaining from it? Second, define the sponsorship objectives. You might want to raise awareness of the brand or strengthen an image. Third, agree to the strategy. How does the sponsorship fit in with any other promotional activity?
At the end, profit maximization is the main reason entrepreneurs do business. What is the point of sponsoring an event if you haven’t answered the following questions?
Will this increase my enterprise, product or brand visibility? Does the event have potential to be successful or to attract a maximum of people? Will this reach my target market? Or do the people attending this event match my market profile? Can it be considered as a prospection opportunity, or a way to offer samples to my prospects?
