ICC – provides the advertising and marketing communication code as a backbone to encourage integrity and honesty, helping the industry stay proud – sets about sponsorship:
Any commercial agreement by which a sponsor, for the mutual benefit of the sponsor and sponsored party, contractually provides financing or in kind support in order to establish an association between the sponsor’s image, brands or products and a sponsorship property, in return for rights to promote this association and/or for the granting of certain agreed direct or indirect benefits.
The key words of this long definition are:
Commercial: modern sponsorship of the sort undertaken by businesses large and small is targeted at delivering some sort of commercial outcome for business owners,
whether the company is publicly or privately owned. The benefits may be accrued in terms of additional revenues or cost savings in the profit and loss account, or as an increase in the value of the brand equity on the balance sheet. While an individual undertaking a challenge to raise money for good causes – such as running a marathon or learning a new skill – is a good laudable activity, it is outside the scope of this definition.
Mutual: there is progressive acceptance that the benefits of a sponsorship relationship should represent a win-win partnership for both the sponsor’s organization and that of the sponsored activity.
Contract: this may be written out in detail or be based on an oral agreement but the fundamentals of contract law will apply to the relationship. The rights-holder is offering for sale the right of association and possibly other benefits, which are accepted by the sponsor and confirmed by the provision of some forms of consideration, which may be cash or defined value in kind. An informal agreement of mutual association with no consideration does not constitute sponsorship under the ICC definition.
By considering the whole connection between a sponsor and a right-holder the sponsorship ICC definition excludes many activities that historically might have been given the name of sponsorship, such as philanthropy – donations and patronage.
However, one of the reasons the definition of sponsorship is currently causing such controversy is the development of other associative marketing activities that, from the average consumer’s standpoint, look and feel like some sort of sponsorship.
cause-related marketing – (RED) with product red is a vivid example of a movement that partners with the world’s most iconic brands to build stronger health systems that fight pandemics.
product placement – the most famous one is the cinema industry and a clear example for this is surely 007 as product placement with watches or even cars. Again, food and beverage is widely involved in product placement with XFactor’s TV program.
advertiser-funded programming – more common in the other European countries than in Italy, this involves brands which are focused directly to develop specific editorial contents that are produced for communicate with a narrow media target audience.
event creation – Nike Run 10K or even Red Bull Air Race inside the motorsport industry are reference for that kind of events held directly from a company to let their audience experience the brand philosophy with no filters.
Within a long list the most impactful difference is in the milestones of the relationship, specifically as professionals we do refer to the qualified management of the relationship between the sponsor and the sponsored team or athlete. For this reason, a sport marketing consultancy or a professional is able, if prepared and qualified to do so, to analyse the brand positioning and any commercial opportunities for the sponsor, then again a professional is able to turn the shared aims between the parties into a mutual agreement and to deal also with the activation plan which is the concept key to emphasise the mutual relationship between the brand sponsor and the sport team.
Sponsorship is not the direct connection to a display of a logo, or to the measure of the total time for brand exposure during an event, or expressing the likes and comments of a post on social networks. To sponsor means planning a financial investment and making part of the vision the sponsor and the sponsee have in common with the aim of achieving a unique goal into sport.
Sponsor Square works alongside companies or teams offering consultancy to make investments in motorsport, and for collaboration on both national and international motorcycling programmes to study the right brand positioning and then leverage it. Learn more about your curiosities with us, we bring our experience to you for planning your brand sponsorship together in detail.