Sponsoring. A smart move or not?

With sponsorship you invest money or materials in a project, programme, or person. Usually in the fields of sports, culture, and entertainment, or social causes. The sponsored party always provides a counter service, such a billboard or a message on social media mentioning the sponsor. If there is no quid pro quo (service in return), you are making a donation.

There are many kinds of sponsoring:

• Sports, for example by supporting a tennis club.
• Social causes, for example by supporting a charity.
• Events, for example by supporting a festival.
• Arts and culture, for example by supplying paint and brushes to a cultural initiative.
• Science, for example by supporting scientific research.

Examples of investments are:

• A financial investment: in this case, the sponsored person chooses where to spend the sponsorship contribution.
• Free products or services such as food and drink. For example, Theo Vrolijk, owner of champagne tasting company Brut & Bubbels, delivers champagne to his old football club during the New Year's reception. In return, he gets a billboard along the pitch each season.
• Equipment such as company clothing or sportswear. In this case, you do not supply your own product but pay for the material your sponsor partner needs. In return, your name or logo appears on the material. For example, owners Sonja and Jacqueline Evers of online marketing agency Online Evers sponsor a youth softball club in the form of t-shirts, balls, and small events.
• A contribution to a prize or reward. Often, a prize or reward is presented during an event. In return, the sponsor gets media coverage at the event.

Advantages

Sponsorship gives you brand awareness and a positive image. And it is tax deductible.

Brand awareness

By placing your logo or name on a billboard, t-shirt, or a glass of champagne, more people see and hear your company name. For example, the Evers sisters notice that their website and social media channels are visited more often in the days before or after an event they sponsor.

Improving your image

Sponsorship can improve your image. People who see your logo or name link your business to what you are sponsoring, so make sure it fits your business. For example, you are a software company, and you make a sponsorship contribution by organising a technical workshop at a healthcare institution. The care institution shares this on social media. This shows that you are socially engaged.

Sponsorship is tax deductible

If you sponsor as an entrepreneur in exchange for publicity, the sponsorship costs are 100% tax deductible. This concerns business sponsorship for brand awareness, the introduction of a product or brand, and personnel recruitment.

Disadvantages

Sponsorship also has disadvantages.

Investment

Sponsorship costs time and money. Especially if you take a professional approach.

Results are difficult to measure

The results are not always clear, so you do not always know what the sponsorship delivered.

A bad match

Pairing your business with the wrong partner can negatively affect your image. For this reason, Anne Bos, co-owner of a dental practice, chooses not to sponsor. “We are regularly approached, often through acquaintances. For us, it is not a financial or social consideration. Commerce and healthcare are a tricky couple. We use other opportunities to get more brand awareness, such as through screens in our waiting rooms.’

Risk of reputational damage

When the sponsored party gets negative coverage in the news or on social media, it can damage your business's reputation. Suppose you are a bakery, and you sponsor a cultural exhibition with free sandwiches. If the exhibition is messy and your sandwiches are not neatly presented, this may have a negative effect on how people think about your business.

Sponsorship checklist

Be very clear about what sponsorship involves before you start. Make sure you can tick off all the points in this checklist:

• Budget: decide how much money you want to spend on sponsorship and for how long.
• Time: decide how much time you want to spend organising and cooperating with the sponsored party.
• Goal: set a concrete sponsorship goal. Such as 100 new customers in 6 months. Sponsorship can also help with brand awareness, image and customer loyalty.
• Target audience: know where your target audience is (e.g. local football club, regional news site) to increase your visibility with them.
• Vision and mission: sponsor activities that match your products or services and what your business stands for.
• Contract: lay down agreements in a sponsorship contract. Such as quid pro quos, costs, results, duration, division of tasks, and start and end dates.
• Evaluation: monitor the results and adjust the activities if you are not achieving your goal. Schedule evaluation moments.