The advantages and disadvantages of sponsorship activities
Sponsorship activities have many unique characteristics when compared to other communications efforts, and if exploited properly can become highly efficient brand-building vehicles, however there are disadvantages of sponsorship to be considered also.
Ethical Issues in Sponsorship.
With consumers demonstrating increased concern about the environmental impacts of businesses there has been increasing need for businesses to consider their image & demonstrate social responsibility. This in turn has led to growth in social & environmental sponsorship which is now favoured as a way of obtaining recognition for charitable gestures.
Sponsorship & Social Concerns
Sponsorship is an important element in the promotional mix & involvement with an organisation or event is a way of promoting corporate image & demonstrating social responsibility. It is good for an organisations image to be linked with a healthy pastime like sport or to be seen supporting something worthy. Sponsorship of social concerns is supported by government initiatives such as ‘Business in the Community’ (BitC), which promotes ‘Cause Related Marketing’, whereby companies benefit a cause, and in return, gain benefits from the marketing opportunity.
Ethics for both parties
Traditional sponsors have tended to be tobacco, drinks, insurance, supermarkets; banks, motor & sports manufacturers & ethical issues are associated with sponsorship both for the sponsor & the organisation being sponsored. Both organisations must ensure that the other organisation are reputable and ethical in its dealings otherwise reputation can be threatened. Sports bodies are now more wary of linking themselves to alcohol related products whilst tobacco advertising has been banned.
Controversy in sponsorship
Sponsorship & commercial tie-ins are controversial forms of giving as inconsistencies between sponsor activities & charity goals are frequent & there is a danger that unless corporate giving is supported by an ethical stance & approach it becomes an false manipulative attempt to buy a caring image. The WWF link with Procter & Gamble, could have been seen as controversial, with the debate over the environmental-friendliness of disposable nappies & that the benefits to the manufacturer outweighing those accrued to WWF.
Tightening Legislation.
The Market Assessment's 2000 consumer research revealed that the majority of adults have a tolerance of tobacco & alcohol sponsorship & a favourable attitude towards companies that sponsor their favourite sports, arts or television programmes. Despite this, legislation regarding alcohol, tobacco & youth related sponsorship is tightening i.e. the ban on tobacco advertising. The ICC promotes high standards of ethics in marketing and is an expression of the business community's recognition of its social responsibilities in respect of marketing activities & communications.
The sponsorship industry will continue a invest in ‘worthy’ causes, to create a caring company image & invest in long term deals in order to win satisfy & win public approval.
The effectiveness of sponsorship
Given sponsorship’s increasing prominence, its advantages and the capabilities it has to develop brands, sponsorship is an important marketing channel consideration for many organisations. Due to the huge investment it takes to exploit & maximize the benefits of sponsorship, organisations considering it need to look at its viability, assess the opportunity from a strategic and tactical perspective and develop skills in sourcing, evaluating & executing sponsorships.
Measuring sponsorship value is crucial to proving its viability as a marketing channel. It involves setting objectives; measuring results; analysing costs and benefits; establishing return on investment; and comparing sponsorship with alternative marketing options. The process to evaluate sponsorship opportunities includes both a pre & post evaluation and the sponsorship process begins by setting direct or indirect objectives that should be quantifiable (measurable)
Evaluating a Sponsorship Opportunity
A sponsorship strategy should include an evaluation of internal constraints such as budgets, human resources & timing and the opportunity should fit with overall business & brand objectives, the target audience & provide competitive differentiation.
Measuring Sponsorship ROI
Once the sponsorship plan is put into action, it is vital to establish whether the sponsorship delivered what is was supposed to and whether the sponsorship objectives were met. Methods for measuring return on investment vary. Normally each element or activity is measured in a different manner with the returns from the package—tangibles and intangibles— being considered and measured against the pre-determined objectives to assess the effectiveness of the investment.
Industry critics claim the most popular methods of evaluating sponsorship & justifying expenditure
measuring volume of media output and brand awareness are flawed because they don’t measure
efficiency as high profile brands are always likely to do well in awareness studies. Octagon Marketing, launched what it claims is the first research tool to accurately measure the complete effectiveness of sponsorship. The company has linked with research specialist Millward Brown & evaluation company Sponsorship Science (SSI) to launch "The Sponsorship Effect" which isolates the impact of sponsorship campaigns on brands by combining qualitative & quantitative data with the measurement of media efficiency. It says this allows brand owners to direct activities to reach their target audiences more effectively
Conclusion
Sponsorship has become one of the major sources of funding for both local & international events involving sports, the arts, the environment, media, humanitarian and community projects, education and various other fields. Successful sponsorship benefits all the concerned parties, including sponsors, organisers, media, performers, spectators and the general public.
To avoid the dominance of certain types of sponsorship, organisations such as The Institute of Sports Sponsorship (ISS) endeavour to retain a balance, encouraging sponsorship of minority sports and grass-roots participation through joint funding schemes, such as England's Sportsmatch. The equivalent body to the ISS for the arts is Arts and Business, who’s Pairing Scheme is similar to Sportsmatch encourages sponsorship of the arts
The sponsorship market will continue to increase with the Internet providing a new platform for sponsorship. The ban, however on tobacco sponsorship & advertising will force many major sports (and some arts organisations) to look for new sponsors such as financial services, computing companies & telephony companies such as Vodafone in order to fill the gap. Organisations will continue to use sponsorship as a way of demonstrating CSR & to create the image of a company that cares.
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