What is Sponsorship? Definition of Sponsorship, Sponsorship Meaning and Concept
Sponsorship is an advertising strategy in which an organization (sponsor) agrees to provide financing to a third party (sponsored) in exchange for the latter presenting its brand or product.
Sponsorship consists of an agreement or agreement between two persons (legal or physical) in which one of the parties called the sponsor will deliver a consideration (monetary or material) to another sponsored call, so that the latter exposes its brand or product. publicly.
Sponsorship is a subtle form of advertising where the company seeks to get customers to associate its brand with some activity or person that represents values or qualities that attract its customers. These activities or people are usually outside the scope of the normal activity of the company. We refer, for example, to some prestigious event, an admired athlete or the celebration of a relevant event, etc.
The ultimate goal of sponsorship is to attract customers and increase sales.
How sponsorship works
The sponsoring company offers people or organizations related to the activity of your interest to deliver a certain amount of resources as long as they commit to expose and promote your brand. For example, a company may be interested in sponsoring a famous tennis player, but in return asks him to wear clothes with the company logo in the matches he plays. Another example is when a company sponsors a sporting event as long as its brand is seen in the stands, posters, etc.
The profitability of sponsorship depends on the success in choosing the sponsor, the dissemination of their activity and the impact on the perception of consumers.
Advantages of sponsorship
Among the advantages we find:
- It is a mutually beneficial relationship where both the sponsor and the sponsored benefit.
- It is a form of advertising that does not bother customers (unlike spam emails, TV commercials, etc.).
- It reinforces the image and valuation of the company (as it is related to positive characters or events).
- The brand is able to integrate into the lives of its customers.
- It presents new channels of dissemination of the brand.
Disadvantages of sponsorship
Among the disadvantages we can find:
- Can be expensive for small business brands.
- There is a risk that the sponsored does not meet expectations or deviates from the values it supposedly represented.
Regulations applicable to sponsorship in Spain
Sponsorship has little regulation in Spain. In the General Law of Advertising (Law 34/1998, of November 11) we can find a definition of the concept, while in the General Law of Audiovisual Communication we find an article that affirms the right of audiovisual communication services so that their programs are sponsored, except current news.
Difference between sponsorship and collaboration agreement
We should not confuse sponsorship with a collaboration or patronage agreement. In the first case, the objective pursued is to promote a brand, while in the second, it is to help achieve the objectives of the sponsored entity (which must be an NGO that meets certain requirements).
In the case of patronage, the benefit for the company is more indirect than in the case of sponsorship, since those who collaborated are mentioned, but their brand is not necessarily spread. However, there is a tax benefit that can be used by the company.