Sponsorships in Sports

By Hammad Anwar (Follow @manihammad)

Every company wants to create a positive image on the consumer`s mind and always want to associate things which have a positive impact on a consumer behaviour. Any company would like to be a sponsor of an event which has a major impact on the people being a part of that event or are following that event and finally would want to convert those customers into the consumers of its product or services with a positive brand image.

In recent decades, the trend of companies, which include big multinationals like Coke, Pepsi, Emirates etc, sponsoring events and teams has increased. While sports sponsorships were 7.8% of the size of advertising expense in 1985, they were 13.9% of the size in 2006 (BMI Sport info). Coca-Cola spent $40 million to become an official sponsor of 1996 Olympic Games. Furthermore, as we would see in our following paragraphs, it is not only the philanthropic approach that matters but It is very important for a company to know how its consumers behave in different situations and how and what attracts their buying behaviour or patters. For example by sponsoring events like sports in a country like Pakistan would definitely mean a positive brand image in the mind of people who follow that sport. When Pepsi sponsors Pakistan cricket team, the individuals are attracted by seeing players drinking Pepsi and would like to do the same; they can be first viewers and then becoming its consumers.

In today’s business world, there is always intense competition to reach more markets and more people. This can be done through making our company should stand out from others. One way to achieve this by sponsor sports, sports events or personalities and by this we build a stronger brand or company awareness and image in the mind of consumers. The company’s public relations are also improved by sponsorships as people perceive that the company is giving back to the community. The more social events a company helps out, the more the public will perceive your company as one that cares about the community and the people’s welfare.

The corporate companies take this as a win-win proposition as by sponsoring any event or the entire team, they are able to attach their brand name to them. This in return then allows these companies to reap international publicity at relatively low cost and reaching out huge audiences worldwide. When a sponsorship deal is signed in between two parties like for instance Emirates with Arsenal, it usually means that the name of a company appears on the front of the team shirt. Furthermore, every marketing campaign like billboards around the side of pitch often contains the names of companies who have sponsorship agreements in place with the individual team.

From the up discussion we have seen that in today`s world, the marketing strategies for a company are much more than just advertising through the print and electronic media. Sponsorship is one of the strategies which have serves different purposes. According to IEG Network (2001) sponsorship is the world’s fastest growing form of marketing. Studies have shown that sponsorship can used to reach specific audiences and this makes it’s an important tool setting strategic communications links. As discussed above the wide exposure that comes in this deal for the company in both electronic and print media provides sponsors with vast publicity opportunities. And in many cases it has been observed that the cost of purchasing the TV and print is unaffordable.

The most prominent and obvious advantage of sponsorship agreement by any firm is that it helps in marketing their brand name and product to the broad audience regardless of demographics. For instance when any company becomes part of Olympics as sponsor, then it has the chance to reach out the audience which are free of any demographic restrictions. This is really important as in today`s fragmented media landscape, reaching out countries from Canada to Indonesia is a real tough test. So with reaching out more people, other aspect includes that people then associate company`s name with positive values like tenacity, good sportsmanship, team spirit and the will of company to pay back to society they are operating in. This helps in the creating the emotional appeal in the mind of customer and thus creating the brand awareness and positive word of mouth. “For example, in the late 1980s, Visa’s brand awareness in Asia was low compared with the Americas and Europe, but after it sponsored the 1988 Olympic Games in Seoul it increased significantly in Korea, Japan and Taiwan. Had it tried to build awareness incrementally, country by country, it might still be trying to become the universally-recognized name that it is today.” (HOW THE FIFA WORLD CUP SPONSORS CAN BE VICTORIOUS - The benefits of sponsoring sporting events. By Professor Dominique Turpin - June 2010)

Talking in pure marketing benefits we observe that when any company enters an agreement with some team then their kit usually bears the logo of the company. All major European football clubs are sponsorship agreements with different companies like London based club Arsenal has with Emirates Airline, where the latter even sponsored their new football stadium. In return Arsenal kit has Emirates written on their shirts and almost every football fan can associate these two. Similarly companies aim to get much more than from this deal than just their logos on players’ shirts or the stadium’s hoardings, they try to make best of it. In this example the sponsorship agreement went beyond the traditional terms where the airline not only sponsored the kits but also the stadium and in the terms of agreement, the stadium was named Emirates. So in short, the airline established their brand name in the mind of every football fan.

Similarly, it helps in creating and enhancing top of mind awareness in the mind of customers, it directly affects market share movements in the selected geography (especially where the event or team is based), furthermore research indicate usually the image improves in the eyes of customers and even shift in relevant attributes about brand preference and increase in purchase intention have been observed. Media opinion also changes which eventually leads to positive feedback from them and the media personalities who play the role of opinion leaders also affect the target population.

Before entering any sponsorship agreement, it is important to take certain factors in mind. It is much more than just two parties signing an agreement to promote each other. The people who follow both parties involved should feel themselves associated with the event or the team. The success of these deals depends in building the right perception and creating the value in the mind of target market.

Sponsorship can create, change or reinforce a brand image. Taking example of Red Bull in Pakistan, they are always involved in sports events specially attracting youth. Recently they were involved in auto race event in Karachi and have been sponsoring many local football clubs and events through the country. Today, Red Bull is associated with the energetic and adventurous youth and that is what they wanted their image to be. Taking an international example BNP Paribas, a big French bank, is one of leading sponsors of tennis. The bank recently collaborated with Sony PlayStation to create a virtual tournament during the French Open in 2005, 2006 and 2007 in order to attract new young customers. And the final 64 players went to Roland Garros, home of the Open, to fight out the last few rounds leading to a positive image for the bank in the eyes of target audience.

Reference (Sponsorship form the value of sport to other kinds of business) David Wheldon, Vodafone’s global brand director states “the emotional connection with people is what is valuable.” So following this approach, Vodafone name has been appearing on Manchester United’s shirts in the past and is also sponsor of the McLaren F1 team. A relative lesser discussed but an important aspect for the companies is that for that it not only helps them enhancing the relationships with general population but it also helps them attract the potential clients. An example can be of Sir Allen Stanford, the eponymous head of an American wealth-management firm. He arranges and sponsors events like any backs yacht races, polo matches and golf tournaments where the elite is invited and there his financial people interact and get to know those people. According to him, within a few weeks of such an event, he knows his return on the investment. Furthermore, sports sponsorship, as unique advertising, is expected to persuade the existing investor and shareholder to invest additionally or to attract new investors to buy the stocks of the sponsoring company.

For the people and community it is a big opportunity to get the required financial aid for these events. The arrangement of these events do require a lot of money and logistical support, plus when these brand names come as sponsors it means that the media coverage would be there as well. Their brand ambassadors who are mostly celebrities also attend these events having a great impact for the event.  Another interesting aspect is there is generation of employment as well through these events. Similarly the teams and players who are sponsored enjoy personal benefits like the access to the most advanced and high quality sports gear. And of course the bottom line is the financial aspect where players like Shahid Afrdi, Christiano Ronaldo, David Beckham and Tiger Woods make millions of dollars out these deals.

References : Taken from different websites/articles from Internet