gE Blog Series: International Business of Sports Part 3 - Sponsorships and Sports

Sponsorships are a huge part of both sports and business. Each depend on the other to gain the benefits sponsorships provide to each party. Businesses look forward to the increased publicity and sales, and athletes, teams, and sporting events count on sponsorships for funding. Still, for businesses, the monetary benefits of a sponsorship can be somewhat difficult to quantify. Yet, countless businesses still participate in sponsorship deals to increase publicity and get their name and logo out there as much as possible.

There are three main ways that companies can use sports for sponsorships. They can sponsor a large sporting event, a team, or an individual player. Each uses the same idea but has slightly different benefits. Sponsoring a large event gets the company’s name plastered all over the event, promotions, and print materials. They get their logo on multiple items, discounted advertising time on TV, and signage all over the event. Sponsoring a team will allow the company’s logo to be on all of the jerseys and print material, as well as offer cheaper advertising when the team has televised games or matches. Nike and Adidas often do this and also benefit from the sales of team jerseys and other apparel. Lastly, companies can sponsor individual athletes. The main benefit for companies here is to use the athlete in their advertisements. If the athlete chosen is well liked by that company’s target market, the increase in sales can be substantial.

One of the biggest challenges for marketing departments and agencies is picking which events or athletes to sponsor. Companies spend hundreds of millions of dollars on sponsorships, so choosing carefully is essential. It is important that whatever is chosen will help to reach the product or company’s target customers.  Certain events or sports are viewed more by certain demographics or geographics. For example, the Super Bowl is viewed by mostly US citizens, while cricket would be more popular in India. If a sponsor wants a more global reach, they will have to look to partner with the Olympics or the World Cup. These both get viewers from every country and will offer the most global exposure, but are of course some of the most expensive.

While it is becoming easier to track marketing efforts, it is still unclear exactly how much benefit is gained from the multi-millions of dollars spent on sports sponsorships. Still, companies continue to invest to get their logo and brand seen by as many eyes as possible. Sporting events gain some of the highest viewership on TV and therefore advertising has more reach, so sponsorships live on.