Sponsorship Marketing: Should my Company Sponsor?
Sponsorship marketing is a business activity that exchanges money for the exposure of your business at a specific event or events. It can include events such as local sports teams, community events such as fairs and carnivals, charity events, contests, venues, ect. Many refer to this as an advertising cost however this plays more into developing a marketing message from your company. Unlike traditional advertisements, sponsorships are generally highly targeted to reach a specific group of people with predictable traits. An example of this might be a community talent contest sponsored by a local music supply company “5th Street Music”. 5th Street’s target audience will be in attendance at the event, their excellent display of sound, lights and other equipment will serve as an example of capabilities, and the company will be remembered as being community driven. 5th Street will also gain some internet marketing benefits as they will have relevant content to add to their website and social media campaigns, back-links to their website from the local and school newspapers, and the added interest in 5th Street from the attendance of the contest is likely to increase their site visits which will in turn influence their search engine position ranking.
Is sponsorship marketing right for my company?
After hearing the example of 5th Street Music’s sponsorship marketing campaign, you may think that you company should look into sponsoring an event in the near future. The following steps will help you decide if you should go through with the sponsorship marketing campaign.
- What is your return on investment from sponsorship marketing?
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If 5th Street Music makes on average $20 per instrument it sells, and there are 2000 people in attendance with a chance that 1 in 4 people will purchase from them, and they spend $600 for their sponsorship cost, they will return 166% of their investment. This means they will have made $1000 in profits from the event!
To determine your return on investment you should take into consideration what the expected reach and frequency of your campaign. Your reach is the number of people in attendance for the event that will likely see your company’s information at the event. Something to consider is the size and placement of your message at the event, it may be more profitable to spend the extra $100 to have a better location or a larger print. The next factor is the frequency of the campaign, or rather the number of times the people in attendance will come across your marketing message, the more times someone sees the message, the more likely they will be to remember about your product / service and will make a purchase. Depending on the price and the demand for your product or service you will be able to estimate the ratio of those in the audience that are likely to make a purchase. To find your return on investment, you would need to take your ((profit)*(number of people reached at the event * percentage of customers that may make a purchase) – the cost of the advertisement)/ the cost of the advertisement and multiply it by 100 to receive the percent return on investment.
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- Who is your target audience?
Although there was an increase in the attendance of Lake Oak’s Talent show, because their residents were not part of 5th Streets target market resulting in a lower purchase rate and a lower return on investment.
- In order to improve the ratio of those in the audience that are likely to make a purchase, you should consider setting your goals for a target audience. Your target audience is a group of people that your product or service means the most to depending on their financial status, interests, geographical location, culture, ect. In the case of 5th Street Music, there may be a great opportunity to sponsor a talent show in the next town over called Lake Oak which is expecting twice the audience of their home towns show, and willing to offer the same ad size and placements at the exact same cost. The audience in Lake Oak may not quite qualify as 5th Street’s main target market because Lake Oak residents aren’t as familiar with 5th Street’s brand, and the drive to 5th Street from Lake Oak is significantly further thus reducing the number of customers that 5th Street will receive. The needs of the residents of Lake Oak could also be different than 5th Street’s hometown because of their local ordinances that limit the volume of music at events. Although Lake Oak is offering twice the reach at the same price the ratio would most likely less than half of the same event in 5th Street’s hometown resulting in a lower return on investment.
- Does the sponsorship marketing campaign match your brand’s marketing message?
- When choosing a sponsorship marketing campaign for your company it is important to consider the marketing message that your company will represent at the event. Since 5th Street’s marketing message is that they want to serve their small town community with quality audio equipment, reasonable prices, and outstanding ethics and family values, they will want to find events that most closely match their marketing message, as well as analyze other companies who may have already signed up to sponsor the same event. It would not make sense for them to sponsor an MMA fight, or a heavy death metal concert because the message from those events does not closely match the message of 5th Street. In addition, it would be beneficial for 5th Street to look at other sponsors of the same event, for example several large chain companies may have sponsored an event which would provide a great opportunity for a local brand to put its name alongside of a retail giant.
How should I get the most out of my sponsorship marketing?
The beginning of the article references some ideas of how to use sponsorship marketing to improve your digital marketing campaigns however we can expand on those ideas for the case example of 5th Street Music.
- Run promotions and digital marketing campaigns in order to increase purchase percentage and measure success of the sponsorship marketing campaign.
- In the case example of 5th Street Music, the music supply store sponsored a talent show to showcase their products and services as well as to share contact information and increase brand awareness in their community. With some forethought, 5th Street also could have gained some invaluable internet marketing knowledge by setting up a digital campaign for the show. Simply adding a url and/or QR code to their advertisements on banners or in the production program, and linking it to a landing page, you will be able to directly measure the reach as well as the purchase percentage of internet users from the event.
- Use this opportunity to add new relevant content to your website and social media campaigns to increase your reach.
- Communities love seeing relevant articles, pictures of loved ones performing in plays and information about local events. This creates a wonderful opportunity for your business to add new content to your website and social media to further increase your reach after the conclusion of the event through social sharing. 5th Street would be able to use pictures from their sponsorship marketing campaign to add pictures of the performers, pictures of themselves running the sound equipment and articles about the event to their social media pages that would be shared between families, individuals would be tagged, and traffic would go to your website which might lead to additional purchases or at least increased brand awareness.
- Ask for back-links to your website when negotiating terms of sponsorship to increase search engine position ranking.
- A back-link is a link added to a second parties website that connects to your page. Sponsorship marketing creates an opportunity to gain back-links from sources such as local newspapers and schools that can be clicked by readers to see your website. Sponsoring events, especially with a unique promotion, will increase your website traffic which increases the popularity rating of your website (a major factor in search engine ranking position).
For more information about sponsorship marketing and other consulting advice, please contact me today!
More articles about Sponsorship Marketing:
http://www.torok.com/articles/marketing/SponsorshipCriteria2.html
