Corporations have recently caught on that using sponsorships and influencer marketing techniques within sports products to promote their products is one of the savviest and most reliable ways to reach their target market. It is a great opportunity for them to show consumers their interest in a cause or event and gain their trust, especially in the case of men aged 18-34, a usually hard demographic to reach.
While the budget is important and consequently so is reducing your bottom line by taking on sponsors, so should be taking care of the inherent identity. Sports teams should be careful not to sign with just any company offering up a nice little sum of money because, at the end of the day, this is their event, their branding, and their reputation.
Some of the questions that should be analyzed are do their values align with yours? How is their reputation? How else can one find potential sponsors? Most companies proudly display their values and mission statement on their website so a team can do some research before signing a permanent contract. It is vital to check to see what their ideals are, what causes they support, what they hold nearest and dearest. It is common to see sponsors as just a business – providing money for a service – but the audience is going to connect the sponsors with your brand, for better or worse.
For one example, in the early 2000’s, Atletico Madrid was sponsored by Columbia Pictures, who would change the shirt logo every so often throughout the 2003/04 season to promote their latest movie, e.g classics such as “Hitch”, “White Chicks”, and perhaps the most infamous, Spiderman 2. Check out these flagrantly sponsored jerseys:
There are ways of judging the degree to which a sponsor's brand or reputation is consistent with the team's. For the sake of one’s reputation, they should be wary of partnering with companies that have just had a scandal or were in the public eye for a negative reason. With social media and the instant news of today’s world, it’s easier than ever for a company to make a misstep that quickly tarnishes their image. To put it into recent context, if you were sponsored by United Airlines after the customer mistreatment scandal in April 2017, it likely hurt you more than it helped.
Of course, while a sports team can research what has happened in the past, there really is no telling what might happen in the future. It is always a possibility that a sponsor might make a large fiasco but that is why it is so important to have a solid contract that protects a team in the case something goes wrong, as well as developing a good contingency, or backup, plan.
If a sponsor wants to establish a pay-for-performance agreement, scaling its payments to the performance of the team on the field or scaling its payments to game-day attendance, this plan should be listened to seriously. This proposition does seem fair. Sports organizations should be held accountable for their performance with regards to sponsorship agreements.
The fairness component of most performance-based sponsorship deals seems to focus on the quantity of impressions. If a team qualifies for the playoffs, then they are able to broadcast their sponsorship to hundreds of millions of fans who will watch the game each year. If they fail to make the playoffs, then the team will obviously lose the optimal number of overall impressions.
Interestingly, the quantity of impressions does not necessarily correlate with the quality of said impressions. As they say, all impressions are not created equal. The quality of an impression can be defined as the degree to which an organization can help its corporate sponsorship increase partner revenue or meet other corporate partnership goals that do not necessarily have a component defined monetarily.
Most of the impressions from signs, jerseys, or apparel sponsorship go towards increasing brand awareness. While audiences that see a company’s logo are more likely to purchase their service in the future, these interactions are not as important as impressions that allow corporations to acquire new customers or retain current business partners.
Sponsorships should help generate profitable revenue growth and help further an organization’s business goals. Consequently, generating a large number of impressions should be used as the standard to evaluate the partnership value of a sponsor. However, it can be argued that taking the guaranteed sponsorship deal, even if the resultant profit is a less than the potential of maximizing a pay for performance agreement, would be more beneficial if a team’s owner was quite risk averse.
What do you think? Are sponsorships getting too far out of line? Let us know what you think in the comments below!
The SaberSmart Team