Difference Between Sponsorship and Placement

Strengthen the brand and win customers with sponsorship

Sponsoring as a brand-building advertising measure

Companies primarily want to achieve two goals with the implementation of advertising measures: On the one hand, new customers should be won and, on the other hand, the corporate brand should be strengthened. New customers generate sales, a strong brand above all increases marketing efficiency and improves customer loyalty.

Sponsorship is one of the few tools in a company's communication policy that pursues both of these objectives to a similar extent, albeit with a slight focus on branding. Sponsoring is therefore not only to be seen as a pure advertising measure, but also serves as a public relations tool, i.e. the public relations work of a company.

But what exactly is sponsoring? A company that acts as a sponsor for an organization, event or sometimes also for an individual usually provides them with money, services or material resources. In return for the event or organization, the sponsor usually receives advertising space for placing the company or product brand. With sponsorship, the sponsor also relies on the dissemination of the brand through the media by choosing events or organizations that are in the public eye and therefore regularly receive media reports.

In this context, the difference to classic advertising measures becomes clear: In sponsoring, the sponsor's brand always appears in connection with the sponsored event or organization. This brings about the desired image transfer from the sponsor to your own brand.

The forms of sponsorship are diverse

Most people only know sponsorship from sport, but it can also be found in many other areas. The most important forms of sponsorship include:

  • Sports sponsorship
  • Media sponsorship
  • Cultural sponsorship
  • Social and environmental sponsorship

According to the Gabler Wirtschaftslexikon, the sponsorship of sporting events, clubs or even individual athletes covers 55-65% of all sponsorship investments and is the most important form of sponsorship worldwide with over 40 billion euros per year. Sports sponsorship is extremely diverse and now appears in almost every sport at every level of ability.

Media sponsorship means the sponsorship of individual program items in the media, such as a series on TV, the morning show on a radio station or a well-read series of articles on an internet blog. This sponsorship can be recognized by texts such as "This program is being presented to you by ...". At around 20%, it is the second most important type of sponsorship.

With 10% of the sponsoring investments each, cultural sponsoring or social and environmental sponsoring are among the two smallest categories in sponsoring. Cultural sponsorship includes sponsorship measures in areas such as the visual arts, music, theater or film. However, social and environmental sponsoring is becoming increasingly popular and includes sponsoring mostly non-profit or ecologically oriented companies or associations such as aid organizations such as the German Red Cross or environmental organizations such as Greenpeace.

Who is sponsorship suitable for?

The question now arises for which types of companies sponsorship is useful and economically sensible. It may give the impression that almost only large corporations such as Coca Cola, Red Bull or Adidas use sponsorship measures to gain awareness and image. In reality, however, it looks like a lot of small companies - even founders - are now sponsoring as part of their marketing.

Whether sponsoring soccer jerseys for the local youth team or financial support for a local art event - the possibilities have become very diverse, even for small companies. So it is no wonder that a large part of all sponsorship money from medium-sized companies flows into local or regional projects.

As a rule, sponsoring does not have a short-term effect; classic advertising is more suitable for this. As a founder, you have to be aware of this. However, if you want to get involved in the long term and build a sustainable business model, sponsorship can also be an efficient tool for young companies.

When doing sponsorship, you should not only have your sales and earnings targets in mind, but also focus on the effect on the company's image. People expect companies to live up to their social, sociopolitical and ecological responsibility. Sponsoring is particularly suitable for this. Even companies that do not enjoy a high reputation due to their economic activities - in whatever form - can make use of sponsorship. In such a case, you just have to make sure that choosing the wrong sponsorship areas does not damage the credibility of your own brand any further.

Develop a sponsorship strategy

Since sponsoring is a measure with a long-term effect on the company's success, a strategic approach is recommended in order to achieve the best results. In the following we present how such a sponsoring strategy can be developed step by step.

  1. Definition of the sponsorship goals
    Which goals should be pursued with the sponsorship? Define what impact sponsorship should have on your brand and your sales.
  2. Choice of forms of sponsorship
    Culture, sport or environmental sponsorship? Think about the type of sponsorship with which you can best achieve your sponsorship goals and of course your target group. Integrate your choices into the overall corporate strategy and try to be believable. If possible, focus on one of the forms of sponsorship.
  3. Selection of specific sponsoring projects
    Now it is time to select the specific sponsorship projects. Gather information about possible events and organizations and get an offer.
  4. Development of the sponsorship message and creation of the advertising media
    Depending on the type of sponsorship and target group, an individual sponsorship message must be formulated. The company logo alone is not always enough. Then you have to take care of the production of the advertising media, such as posters, banners or printed pens.
  5. Integration of sponsorship into your own corporate communication
    You are doing something good with sponsorship - so report it! Write a press release and do sufficient press work. Public relations work is an important instrument in sponsoring and should therefore be used as much as possible.
  6. Monitoring success in sponsoring
    Even if you are doing something good with sponsorship, it must ultimately make economic sense for you. So check regularly whether you are achieving your sponsorship goals - at least as far as possible. To do this, you can, for example, conduct surveys with visitors to an event you sponsored and compare the results with those of non-visitors.

With the gradual processing of the individual points, you have come one step closer to your success through sponsoring.

Would you like to sponsor yourself and need professional support? We will find a suitable agency near you!

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Author: Für-Gründer.de editors

As editor-in-chief, René Klein has been responsible for the content of the portal and all publications by Für-Gründer.de for over 10 years. He is a regular interlocutor in other media and writes numerous external specialist articles on start-up topics. Before his time as editor-in-chief and co-founder of Für-Gründer.de, he advised listed companies in the field of financial market communication.