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Corporate logos showing NASCAR team sponsors.

To sponsor something is to support an event, activity, person, or organization financially or through the provision of products or services. A sponsor is the individual or group that provides the support, similar to a benefactor.

Contents

Definition

Sponsorship [1] is a cash and/or in-kind fee paid to a property (typically in sports, arts, entertainment or causes) in return for access to the exploitable commercial potential associated with that property. For example, a corporate entity may provide equipment for a famous athlete or sports team in exchange for brand recognition. The sponsor earns popularity this way while the sponsored can earn a lot of money. A particular form of specialized brand sponsorship where a brand sponsors an unusual event or pastime that then becomes synonymous with that brand (to the point where future brands may be excluded from participation) is known as 'aboutsponsorship'. This provides a strong walled-garden sponsorship relationship between particular events and the brand.

Other reasons for sponsorship include signage at sporting events, local or national media coverage, promotional opportunities before and after the event, and the opportunity to entertain clients and prospective customers by inviting them as VIPs to sponsored events. Other benefits of sponsorship can include access to on-site hospitality tents or skyboxes; the opportunity to meet athletes or teams in person, and possibly even the opportunity for sponsors and their VIP guests to participate in a pro-am type event. Another benefit is the ability to reach a specific demographic or target market.

Cause-related marketing[2] 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.

The International Sponsor Council (ISC) [3] was formed as the world's first trade organization representing corporate sponsors. The mission of the ISC is to promote sponsor value and protect their collective interests. Members include some of the world's leading sponsors including Anheuser-Busch InBev, AT&T, Bridgestone Firestone, The Coca-Cola Company, Coca-cola Enterprises, FirstRand Group (South Africa), Honda Motor Co., MasterCard, Panasonic, Ping, Porsche Cars N.A., Visa, among others.

When commercial radio stations began broadcasting in the early 1920s, the programs were aired without advertising. Many radio stations were established by radio equipment manufacturers and retailers and programming was provided to sell radio transmitters and receivers. This led to a system where radio and television programs were financed by selling sponsorship rights to businesses. Eventually, the broadcasters began selling smaller blocks of advertising time to several businesses. Sponsorship is also becoming increasingly important in education.

Many companies want their logo on sponsored equipment in return. Formula One teams for many years relied heavily on the income from tobacco advertising, reflected in the sponsorship liveries of the teams. Other types of sponsorships revolve around companies paying for parts of television broadcasts and sporting events which bear their name. For example college bowl games now contain the name of their sponsor.

When events are named after their sponsor, like this Annual Students Rowing Contest ('Roeivierkamp') on the Amstel river in Amsterdam, the sponsor is a Title Sponsor.

Many times a company's motives for sponsorship are altruistic in order to create goodwill in the community which increases their good reputation. However, sponsorship is more commonly used to derive benefit from the associations created for a company's brand(s) or image as a result of the sponsorship.

People may sponsor an individual or group of people to undertake a fundraising task, usually for a charity or other cause requiring funding.

Sponsorship belongs to the promotional tool of Marketing.

In Japan, sponsorship is prevalent in television, as evidenced by each Japanese television series (after its opening sequence, its ending and subsequent episode preview).

With respect to neuroscience conferences, the term sponsor designates the person financially supporting the research presented at the conference.

Sponsorship in the traditional sense became less common is US television over the years -- individual advertisements in many different programs being the norm for commercial television these days, with product placement becoming more popular -- with the exception of Public Television, where sponsorship of an entire series is still commonplace, usually with a subdued announcement at the end, and optionally the beginning, of each program. This is often referred to as 'underwriting'.

Sponsorship controversies

Recently, the sponsorship industry has been under scrutiny for compliance issues, among others the alleged channeling of funds ("kickbacks"),[4] invitations to lobbyists/politicians and taxation of benefits such as free admission tickets and hospitality.

An ongoing issue is the payment to intermediating sponsorship agents and sports managers which are employed by many sportspersons and teams to find sponsorship, but who are often reluctantly paid, because of their high commissions (10-25%).[5]

The German initiative S20[6] has been established in 2007 in order to define a stable framework for the sponsorship industry in Germany.

See also

References

External links

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