What is sponsorship? Types of sponsors
A sponsorship is an agreement between a company and a person, or another company or entity, where a commercial agreement is established so that both parties establish a beneficial collaboration for all of them. This is a communication tool used by many companies.
On the other hand, the sponsor wishes to promote products or services and it is the sponsored party who is in charge of implementing the actions according to the agreement. It is one of the most common marketing actions for many brands that wish to gain notoriety and improve their presence in the minds of consumers.
1. Difference between sponsorship and collaboration agreement
It is common for both terms to be confused, so it is convenient to know that in the case of sponsorship, the desired objective is to promote a brand or service, while in the case of a collaboration agreement, the objective is to help the sponsored entity (NGO) to meet its objectives.
2. Advantages and disadvantages of sponsorship
Sponsorships have advantages and disadvantages, which are listed below.
- It establishes a relationship where sponsor and sponsored benefit.
- It is a non-intrusive form of advertising for customers (contrary to what happens in outbound marketing campaigns).
- 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.
- It is generally expensive and not accessible to all companies.
- The sponsored may not meet the objectives or expectations.
- The impact obtained may not reach the desired ROI.
3. Types of sponsors
There are many types of sponsorships, such as:
- Financial sponsors. These are those who pay an amount of money in exchange for the actions described in the collaboration agreement.
- Bartering. In this case, the sponsor will be bartering, or exchanging products or services and not paying the other party in cash.
- Media sponsors. These are sponsors that either finance or secure media coverage/presence for the sponsored party.
- Location sponsors. These are sponsors who offer the use of their facilities as a form of sponsorship.
- Labor sponsors. These are those who donate the time and talent of their employees as part of the sponsorship agreement.
- Exclusive sponsors. Depending on the event or project, many companies will be interested in promoting their brands. In this type of situation, the company that is offering the most advantageous proposal will be selected. Thus, many times, it is common to see denominations such as main sponsor, gold sponsor, silver sponsor, with the support of… to define the contribution of each sponsor.