Advantages and Disadvantages of Sponsorship
Advantages of Sponsorship:
- Sponsorship Builds Awareness
- Increase Sales Volume
- Brand Building
- Less Expensive
- Market Exposure
Disadvantages of Sponsorship:
- Poor Planning
- Goal Ignorance
- Dependency on Results
- Low ROI for the Money Spent
- Poor conversion rates
Sponsorship is the best way companies multiply their customer reach by approaching influential personalities to promote their products. This marketing tool has become an essential part of every business by redefining the market approach. From Roger Federer sporting Uniqlo outfits to James Bond with the latest Rolex watches, it’s all about business through sponsorship. But, can sponsorship be bad? The Advantages and Disadvantages of Sponsorship take a deeper look at the marketing strategy from different perspectives.
What is Sponsorship?
A sponsorship is a form of marketing where one company will provide financial support to another company or individual. This usually entails the first company providing products, services, or funds to the second in return for publicity and promotion by that other company. Most large companies and also many local businesses use sponsorship as a promotion vehicle.
Businesses can promote themselves by sponsoring sports teams, youth clubs, theatre productions, or other public activities. However, there is always the risk that if someone they sponsored does something unacceptable to others, they will need to stop their involvement.
What are the Advantages of Sponsorship?
Sponsorship is one of many forms of advertising and marketing. The main idea behind the sponsorship is to associate a brand with a thing that the company believes will affect its popularity and or credibility, which can be anything from social media accounts to TV shows.
1. Sponsorship Builds Awareness
Advertising can be seen as a way to increase your brand awareness. Advertisers often use sponsorships in their marketing strategies, and this is for a good reason. It's an excellent tool that allows you to reach new audiences while widening the potential customer base at the same time.
2. Increase Sales Volume
Sponsorships also provide advertisers with extra benefits in terms of sales volume. For example, many studies have shown that consumers who attend live sports games at arenas purchase more food items (hot dogs) from vendors inside the stadium than those without tickets. It indicates that it's possible to see increased revenue by being involved in sponsorship activities.
3. Brand Building
One of the many advantages of sponsorship is the obvious brand enhancement and credibility for sponsors. Various brands have used this sponsorship tactic to increase their brand's reach in the marketplace. Advertisers also find that they can offer some creativity and originality to their ads. For example, they can use celebrities, movie trailers, sporting events, or other forms of entertainment to promote their product or service.
4. Less Expensive
Many marketers like sponsorships because they are less expensive than other advertising formats like TV ads or billboards. Sponsorship is a form of advertising in which an outside company supports a particular activity, such as an event, team, or venue. A sponsor may provide financial support for any number of things going on in a given organization: equipment needs, operating costs, research, and development. They may also provide goods for promotional purposes.
5. Market Exposure is one of the main advantages of Sponsorship
Sponsorships work by connecting a company's products or services with another company. These companies are matched in a way that benefits both of them. For example, a coffee company might sponsor the podcast of a popular morning show. This way, they get more exposure, and the morning show gets new sponsors and financial support.
What are the Disadvantages of Sponsorship?
Sponsorship can be a great way to promote your company. But it can also backfire if you don't think carefully about the image you want to portray and the message you want to send. If you are going into business sponsorship with no idea what your goal is, it can be difficult to succeed. You have to think about what kind of image and message that sponsorship will bring on behalf of your company.
1. Poor Planning
There are many disadvantages of sponsorship in the marketing world. Some are short-term, while others could last decades after the sponsorship has been discontinued. The most important thing is thinking ahead and strategically planning your campaign for success.
2. Goal Ignorance
One of the main disadvantages of Sponsorship is goal ignorance which can be detrimental to a sponsorship's success. Though some may not realize the importance of setting a goal, this mistake could lead to the loss of valuable opportunities.
3. Dependency on Results
Sponsorship dependency on results can cause several problems. Firstly, the sponsors are often not qualified to judge the effectiveness of their sponsored athletes. Secondly, there is a lack of transparency in these sponsorships, which can lead to unethical practices.
Finally, as sponsorship deals are often short-term with no guarantees of success, athletes struggle to plan and establish themselves as a brand name in their sport.
4. Low ROI for the Money Spent
The main challenge with sponsorship is the low ROI for the money spent. In addition, when sponsored, there is a risk that people will not see your brand because they are busy paying attention to the sponsor. Another problem with sponsored content is that it can come across as too soft and salesy.
5. Poor conversion rates are concerning disadvantages of Sponsorship
Sponsorship conversion rates can be poor because of the number of steps involved in the process. Consumers are often unaware of a product or service and will not follow up on a call to action. Whether or not consumers will convert from an email, which is often sent out for marketing purposes, to a phone call made by the sponsor.
Conclusion on Pros and Cons of Sponsorship
Sponsorship can be a good way to advertise, and it can also be great for the company's image. However, there is some risk involved with the sponsorship. There is always the possibility that one or both of the businesses will not succeed, resulting in a loss for both parties. Therefore, sponsorship should not be taken lightly and should only be done if you know that you will benefit from it somehow. It is better to go through the Pros and Cons of Sponsorship before investing in this marketing strategy and mitigating the risks beforehand.