Sponsorship Defined - Sponsorship in Marketing Cornwell

Summary

The video discusses sponsorship in marketing, focusing on the relationship between brands and properties like sports or entertainment. Sponsorship is defined as an investment in cash or kind in exchange for brand association and commercial potential. The speaker distinguishes between deals, leveraging, and activation, explaining how brands invest beyond the initial deal to enhance engagement. Terms like leverage ratio and ambushing are explained, and the concept of sponsorship-linked marketing is introduced as an integrated strategy. The speaker also differentiates sponsorship from other partnerships for clarity in marketing contexts.

Takeaways

• 🤝 Sponsorship is a relationship between a brand and a property rights holder, involving either cash or in-kind investments.
• 💵 The investment could be financial or a product/service offered in exchange for brand association and access to the property's events or activities.
• 📝 Sponsorship deals are formal agreements that define the length of partnership, investment, and mutual benefits.
• 🌍 An example of sponsorship is Amazon’s deal with Climate Pledge Arena, which aligns brand association with climate action goals.
• 🎯 Leveraging refers to additional spending beyond the initial sponsorship deal to maximize the return on investment.
• 🛠 Activation, a form of leveraging, involves interactive two-way communication, engaging consumers directly with the brand.
• 📢 Non-activation leveraging refers to thematically tied ads that don’t involve direct consumer interaction but promote brand association.
• 📊 The leverage ratio is the comparison of deal spending to additional leveraging, with ratios like 2:1 or even 10:1.
• ⚠️ High leverage ratios, like 10:1, may be seen as ambushing, where a small deal is over-leveraged to gain disproportionate attention.
• 🏷️ Sponsorship is distinguished from other types of partnerships, such as co-branding or licensing, due to its long-term contract and specific brand-property collaboration.

Q & A

What is the basic definition of sponsorship as described in the transcript?

Sponsorship is defined as a relationship where a brand invests in cash or in-kind with a property (e.g., sports, arts, entertainment, or cause) in exchange for access to the commercial potential of that property, such as using their logo or participating in their events.

What forms can the investment in sponsorship take?

The investment in sponsorship can be in cash or in-kind. In-kind investments can include products or services offered by the sponsor to the property.

What does the term 'deal' refer to in the context of sponsorship?

A 'deal' refers to the contract that specifies the terms of the sponsorship, including how long the partnership will last and how much will be invested by the sponsor.

Can you give an example of a sponsorship deal mentioned in the transcript?

An example is the Climate Pledge Arena in Seattle, where Amazon has a deal to name the arena in support of climate action. This deal involves financial support and the opportunity for Amazon to put its name on the arena.

What is 'leveraging' in the context of sponsorship?

Leveraging refers to additional spending by the sponsor beyond the original deal. This can include activities like advertising or creating promotional content tied to the sponsored event or property.

How does 'activation' differ from 'leveraging'?

Activation is a form of leveraging that involves two-way communication, where the sponsor engages directly with individuals through activities like booths or interactive events. Leveraging, in general, may include one-way communication, like advertisements, without direct interaction.

What is the concept of the 'leverage ratio'?

The leverage ratio is the ratio of additional spending (leveraging) to the original sponsorship deal. For example, if a sponsor spends $1 million on the deal and an additional $2 million on leveraging, the leverage ratio would be 2:1.

Why does the speaker prefer to use the term 'sponsorship' rather than 'partnership'?

The speaker prefers the term 'sponsorship' for clarity, as there are many types of partnerships in marketing (e.g., co-branding, licensing agreements). Sponsorship refers specifically to a contract-based relationship over time, which distinguishes it from other forms of partnerships.

What is 'sponsorship-linked marketing' according to the speaker?

Sponsorship-linked marketing is the orchestration of the deal, leveraging, activation, and the integration of these elements into the brand's overall portfolio or strategy. It involves managing how the sponsorship supports the brand and the property.

What might be considered a high leverage ratio, and what does it signify?

A high leverage ratio, such as 10:1, signifies that a relatively small sponsorship deal is accompanied by a large amount of leveraging. This can sometimes be seen as a form of ambushing, where the leveraging outpaces the deal itself.