4 benefits of sponsorship for brands

brand marketing

From Coca Cola’s sponsorship of the Olympics to Nike’s partnership with Michael Jordan, the use of sponsorships to mutually benefit both parties is a tried and tested strategy. Dating back to Ancient Greece, sponsorships originally took the form of a tax paid by wealthy citizens to fund major competitions and public festivities.

The modern sponsorship typically involves financial support of an organization or individual — whether it be a sports team or athlete, charity or event — by a commercial brand. Some of the biggest sponsorship deals go for millions, if not billions, of dollars, and are a vital source of funding for sports teams in particular.

The advantages of being sponsored are clear, but what exactly do brands gain by spending so much money on other organizations or individuals?

A refined marketing strategy 

Among the most important aspects of a successful sponsorship is sponsorship activation, which is the set of strategies harnessed by brands to promote the partnership. One notable example of this comes from Budweiser. To help promote its sponsorship of Lionel Messi, the beer brand sent out 644 beer bottles to all of the 160 goalkeepers the football icon had scored against for Barcelona. The campaign received huge media attention, successfully activating the sponsorship. 

As sponsorship agency Pitch points out, the strategies employed during sponsorship activation can offer brands particular benefits beyond the partnership in question: “Sponsorship activation often includes unique marketing strategies like pop-up events, video content and giveaways, all of which can give you inspiration for your marketing campaigns going forward.”

Increased brand awareness

Harnessing the popularity of a certain entity or individual by sponsoring them helps brands increase their own visibility. For instance, Nike’s sponsorship of Michael Jordan and release of the Air Jordan trainers created a massive buzz around the brand, and saw Nike make $126 million worth of extra revenue in the partnership’s first year.

However, it’s not just famous figures or entities that brands sponsor to help increase their visibility. Companies of all sizes also tend to sponsor local individuals, businesses or events to boost brand awareness in the community. 

Enhanced brand image

By sponsoring organizations that consumers are fond of, brands can enhance their reputation. This further explains why so many companies sponsor local events or not-for–profit groups that benefit the local community where they are located.

For example, banks — which typically do not have the best reputation — often engage in such sponsorship to achieve just this. Take the Bank of America, which is known for providing regional sponsorships throughout the US. These include underwriting art exhibits and performances, charity sporting events like the Chicago Marathon, and initiatives that support neighborhood preservation, urgent community needs like food and shelter, and DEI programming.

More business relationships

Sponsoring another entity is not only a great way for a brand to develop a relationship with them, but other entities too. In the example of Nike and Michael Jordan, the brand’s sponsorship of Jordan helped Nike to spark favor with the NBA itself. Fast forward to 2017, and the brand became the league’s sole kit producer.

On a smaller scale, sponsoring events in particular can offer opportunities for brands to interact with their counterparts. For instance, the World Green City Awards run by the AIPH enables sponsors such as real estate, engineering, architecture and consultancy companies to engage directly with highly influential city planners and local government decision-makers.