Sponsorship can be an effective way to raise brand awareness and increase sales. However, it is not without its pitfalls as illustrated by Nike's recent suspension of its contract with paralympic athlete, Oscar Pistorius, after he was accused of murdering his girlfriend and the string of sponsors that last year dropped US cyclist, Lance Armstrong after the USADA accused him of doping.
In this blog post we consider the pros and cons of sponsorship as a marketing activity.
Advantages of sponsorship
Brand enhancement - tying up with another individual, event, or organisation that has a strong reputation can enhance your company's reputation simply by association
Awareness raising - your brand name will gain visibility and be included in media coverage e.g. the London Marathon takes the name of the lead sponsor, the 2103 marathon is referred to as the "Virgin London Marathon"
Access to niche markets - sponsorship can enable entry into a niche market if you link up a brand that already has a reputation in that market
Generate or increase sales - this could be directly e.g. selling your product at the event you have sponsored, or indirectly - a positive change in audience attitude or awareness leads to purchase
Cost effective - sponsorship can be more cost effective than mainstream advertising
Disadvantages of sponsorship
Negative image association - as highlighted in the examples above, a sponsorship deal can give out negative messages e.g. if the sports individual you are sponsoring is caught cheating or there is crowd trouble at the football event you are sponsoring
Lack of control - many of the variables (e.g. weather, media coverage, attendance etc.) are uncontrollable
Sponsorship clutter - an overload of sponsors, normally at high-profile events such as the Olympics, can turn off the target audience and ensure that no one sponsor stands out
Ambush marketing - 'the practice whereby another company, often a competitor, attempts to deflect some of the audience to itself and away from the sponsor'
The key to maximising sponsorship success is to have a clear objective at the outset and ensure that the sponsorship deal you select has the best possible fit to meet your objective.