Sponsorship

Sponsorship is an agreement in which a company, the sponsor, provides money, products or services to a person, an event or an organization, the sponsored party, in exchange for visibility for its brand.

It is one of the most widely used ways to build awareness and associate a brand with positive values.

In this glossary entry, we’ll explain what sponsorship is, its types, objectives and examples so you can apply it to your own projects.

Let’s go step by step.

What is sponsorship?

Sponsorship is an agreement between a company and a person, or another company or organization, setting out a commercial arrangement so that both parties enter into a collaboration that benefits everyone involved. It is part of any company’s communication mix.

Put another way, the sponsor wants to promote products or services, and it is the sponsored party who carries out the actions agreed in the sponsorship deal.

It is one of the most common marketing actions for many brands that want to build awareness and strengthen their place in consumers’ minds.

Sponsor, sponsored party and to sponsor: what each one means

Several terms around sponsorship are often confused. This table sums them up:

When you see “sponsored by” on an event, a video or a post, it means a brand has paid for it or contributed something to make it happen.

On social media, the law also requires this to be stated clearly so nobody mistakes it for a spontaneous opinion.

What is sponsorship for? Objectives

Sponsorship helps achieve several strategic objectives. The main ones are:

1. Increase visibility: It lets brands gain exposure and public recognition by associating themselves with popular events, people or causes.
2. Improve brand image: Being linked to sports, cultural or social causes reinforces positive values and makes the public view the brand more favorably.
3. Expand reach: Through sponsorship, brands reach new audiences and markets they would not easily reach with other marketing channels.
4. Customer loyalty: Associating with events or activities that interest the target audience can create an emotional connection, building loyalty and preference for the brand.
5. Stand out from the competition: A well-executed sponsorship can make a brand stand out from its competitors by showing its commitment to specific areas.
6. Build strategic partnerships: It makes it easier to build relationships with other companies, media outlets or institutions, which can lead to long-term collaborations.
7. Increase sales: Associating the brand with positive experiences can influence consumers’ purchasing decisions and drive direct sales.
8. Positioning: It helps establish a brand in a specific market or segment, reinforcing its authority and prestige in that field.

Difference between sponsorship and a collaboration agreement

Sponsorship focuses on promoting the brand and giving it visibility in exchange for financial or in-kind support.

A collaboration agreement seeks an exchange of resources and efforts to achieve a common goal, with no direct advertising purpose.

Sponsorship, patronage and advertising: how they differ

All three help make a brand known, but they don’t work the same way. The key is what whoever puts up the money gets in return.

In Spain, the General Advertising Law (Ley General de Publicidad) defines the sponsorship contract in its Article 22.

Under the law, the sponsored party receives financial support for its sports, charitable, cultural, scientific or other activity and, in return, undertakes to collaborate in the sponsor’s advertising.

Patronage, on the other hand, is regulated by Law 49/2002.

A company that signs a collaboration agreement with a foundation only gets the publicizing of its participation in return, and may receive tax benefits.

Since sponsorship is an advertising service, it is subject to VAT.

How sponsorship works step by step

A well-planned sponsorship almost always follows the same steps, whether you are the brand or you are looking for a sponsor.

1. Define what you want to achieve

Awareness, brand image, new contacts or sales. Your objective determines which type of sponsorship suits you and how to measure it.

2. Choose who to sponsor

Look for an event, a person or an organization whose audience matches yours and whose values fit your brand. A poor fit can damage your image.

3. Agree on what each side gives

Decide what each party contributes: money, products or services on one side; logo, mentions, tickets or space at the event on the other.

4. Sign the contract

Put in writing the duration, exclusivity, use of the brand, deadlines and what happens if one of the parties does not comply.

5. Activate the sponsorship and measure the results

Sponsorship doesn’t end once your logo is up.

Promote it on your social media, your website and your email campaigns, and measure the reach, visits, contacts and sales it generates.

Advantages and disadvantages of sponsorship

Sponsorships have advantages and disadvantages, which are listed below.

Advantages

• It establishes a relationship in which both sponsor and sponsored party benefit.
• It is a form of advertising that is not intrusive for customers (unlike outbound marketing).
• It improves brand image, since it is associated with positive events.
• It allows brands to connect with customers and be a part of their life.
• It opens new channels with which to position the brand in the consumer’s mind.

Disadvantages

• It is generally expensive and not accessible to all companies.
• The sponsored party may not meet the objectives or expectations.
• The impact achieved may not deliver the desired ROI.

Types of sponsorship

Sponsorship formats vary widely. Among the most common sponsorship actions are:

• Financial sponsorship: The sponsor provides money in exchange for certain actions agreed with the sponsored organization. It is the most common form of sponsorship, and its goal is to promote the brand.
• In-kind sponsorship: Instead of money, the sponsor provides goods or services as part of its support. This can include products for events or specialized services.
• Media sponsorship: The sponsor secures media presence for the sponsored party, which can take the form of advertising, coverage or promotion of events on media platforms.
• Venue sponsorship: This type of sponsorship offers the use of the sponsor’s facilities for the sponsored event or activity, contributing to the event without providing money directly.
• Employee sponsorship: It consists of donating the time and skills of the sponsor’s employees as part of the agreement, providing human resources for specific tasks.
• Title sponsorship: Several companies sponsor the same event, but one contributes more and becomes the main sponsor, which gives it greater visibility and recognition.

Types of sponsorship by theme

• Sports sponsorship: Brands support sports, teams, competitions and athletes to gain visibility in this competitive environment.
• Music sponsorship: It funds artists, concerts, festivals and tours to associate the brand with art and music in all its forms.
• Cultural sponsorship: It supports museums, exhibitions and cultural assets to associate the brand with causes of public interest and heritage preservation.
• Arts sponsorship: It supports contemporary or avant-garde artistic disciplines, allowing brands to be part of new trends and creative expressions.
• Social sponsorship: This type of sponsorship supports NGOs and social projects, aiming to improve the company’s image through its contribution to causes with social impact.
• Fashion sponsorship: Focused on runways, fashion shows and collections, this sponsorship associates the brand with fashion and the latest trends.
• Entertainment sponsorship: Brands link up with film, television, theater or modern music to reach audiences through entertainment.
• Influencer sponsorship: Collaborations with social media influencers to promote products or services through their digital platforms.
• Individual sponsorship: It focuses on sponsoring a specific person (artist, athlete, etc.), highlighting their image and individual values.
• Event and team sponsorship: It funds events such as festivals or exhibitions, and teams in various disciplines, linking the brand to the social or sporting occasion.
• Competition sponsorship: It supports leagues, championships and tournaments, providing visibility at major sporting events.
• Sponsorship of federations, associations and national teams: Aimed at the governing bodies of each discipline, ensuring the brand’s presence at competitions and events.
• Venue naming rights: It consists of associating a brand’s name with a place or facility, such as a stadium or auditorium, gaining long-term visibility.
• Own event: The brand organizes its own event to have full control over its image and the participants’ experience, but it carries risks if it is not successful.

Sponsorship examples

Here are some sponsorship examples from different fields:

• Nike and Cristiano Ronaldo: Nike sponsors Cristiano Ronaldo, so the player wears and promotes its brand worldwide.
• Coca-Cola and the Olympic Games: Coca-Cola has been an official sponsor of the Olympic Games, gaining global visibility through the event.
• Heineken and the UEFA Champions League: Heineken has sponsored Europe’s top club competition since the nineties, associating its brand with football and watching matches with friends.
• Iberdrola and the Prado Museum: Iberdrola sponsors the Prado Museum in Madrid, positioning its brand in the world of art and culture.
• Telefónica and the San Sebastián Film Festival: through its Movistar brand, Telefónica has been one of the festival’s main sponsors, strengthening its association with film.
• Apple Music and the Super Bowl: Apple Music sponsors the Super Bowl halftime show, one of the most watched entertainment events in the United States (Pepsi used to do so).
• Rolex and Wimbledon: Rolex is the tournament’s official timekeeper, associating its watches with tradition and excellence.
• L’Oréal and Paris Fashion Week: L’Oréal sponsors Paris Fashion Week, linking its brand with the leading fashion trends.
• Mercedes-Benz and Fashion Weeks: for years, Mercedes-Benz was the main sponsor of several Fashion Weeks around the world, associating itself with luxury and innovation.
• IKEA Foundation and UNHCR (the UN Refugee Agency): the IKEA Foundation supports UNHCR humanitarian projects, providing resources to improve the lives of refugees.
• Spotify and FC Barcelona: since 2022, Spotify has given its name to the club’s stadium (Spotify Camp Nou), an example of naming rights.
• Tech brands and influencers: phone manufacturers such as Samsung or Huawei sponsor tech influencers to showcase their new models.
• Heineken and Coachella: Heineken sponsors the Coachella music festival, offering experience zones and products at the event.

These examples show how brands partner with different sectors to gain visibility and strengthen their image.

How to get more out of a sponsorship with email marketing

Many brands invest in a sponsorship and then barely talk about it. Email marketing helps you get a return on it before, during and after the event.

Before, you can announce the sponsorship to your subscribers and offer them tickets, giveaways or discounts.

During the event, you can capture new contacts with a subscription form or a QR code.

Afterwards, you can send a recap with photos and measure how many of those contacts become customers.

If the sponsored party is an event, it can also use email to give its sponsors visibility in every newsletter, one more thing to offer in the negotiation.

Frequently asked questions about sponsorship

These are the most searched questions about sponsorship.

What is sponsorship in a nutshell?

It is an agreement in which a brand supports a person, an event or an organization with money, products or services in exchange for visibility.

What is the difference between a sponsor and a sponsored party?

The sponsor is the one who provides the support, usually a company. The sponsored party is the one who receives it and, in return, displays the sponsor’s brand.

What does “sponsored by” mean?

It indicates that a brand has funded or supported that content or event. On social media, it is used to flag that the post is a paid collaboration.

What is in-kind sponsorship?

It is sponsorship paid with products or services instead of money. For example, a beverage brand that supplies the drinks for a fun run.

What is a sponsor?

It is the English word for “patrocinador”. It is widely used in sports, events and social media with the same meaning.

Related terms

• Influencer marketing
• Branded content
• Branding
• Brand image
• Brand awareness
• Advertising
• ROI (Return on Investment)
• ROAS (Return on Advertising Spend)
• Ambush marketing
• Joint venture
• Fundraising

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