The other day, I was at lunch with a colleague and we were talking about a myriad of topics around sponsorship marketing. Then the question arose: What makes sponsorship marketing so successful? Why does it yield such strong results? Why does sponsorship and experiential/event marketing continue to grow its unfair share of the marketing pie to the point that, in Canada, over one in four (25%) marketing dollars are spent in this channel?

The truth is that sponsorship and experiential marketing isn’t always successful. Often it fails. But in every case study we have reviewed, the failure was not with the medium, but the execution. When done right, sponsorship marketing works fantastically. When the property knows what the audience and the sponsor are trying to achieve, when the brand is willing to invest in rights fees and activation, when the audience gets ROI, when the Trinity of Sponsorship is in place, when the investment is in place, when the valuation of assets is realistic, when the discovery and custom proposals have been done, and when the activation works, you have one of the most successful marketing channels delivering incredible ROI on your marketing investment. When done poorly, you get awful results.

We identified four key reasons why great sponsorships truly work and deliver great ROI for all three partner groups—sponsor, rights holder, and audience.

1. Sponsorship-event/experiential marketing engages three groups—the sponsor who is looking to sell product/build brand, etc.; the rights holder/property which owns the asset, can deliver the audience, and is seeking bottom line revenue and a great experience for the audience they deliver; and the audience themselves who will buy product, such as a brand and support/return to support the property! All three must work together to achieve their separate but intermingled goals. This is different from traditional media channels where the three groups don’t work together… just the advertiser and the medium, be that radio, TV, OOH, etc. But the audience is not an engaged part of the equation as it is in sponsorship.

2. With sponsorship, there is experiential or even entertainment value. Whether you sponsor a beer festival, sport field, theater company, or charity gala, the audience receives value. They get access to beer, they use or watch other athletes use the field, they sit and are entertained, or they socialize. In each of these cases, the audience is engaged. It is unlike traditional media that push out a message, but have no room for interaction. Even looking at social media, the engagement levels are low compared to those attending a sponsored property or event where there is 100% “participation” by those in attendance!

3. Through experiential sponsorship marketing, all the senses can be engaged. There are sights (stage, playing field, audience itself); sounds (cheers, music, etc.); smells (from hot dogs to open pit fires); feel (where the audience can touch samples, hold hands, or kiss and be excited by the event the sponsor is bringing to them); taste (where you can taste product, samples, the meal at a gala). When you can deliver all five sensory elements to a marketing plan, it is amazing. Sponsorship can deliver this where other traditional, and even the newest of technology, cannot. A recent University of Texas study showed that people are most likely to remember 10% of what they read, 20% of what they hear, 30% of what they see—but people retain 90% of what they do and say! Sponsorship allows this multi-sensory opportunity where other marketing channels do not!

4. Face-to-face Interaction. Sponsorship and experiential marketing can deliver an interaction that other media cannot. How real are your social media relationships? Can a billboard really engage you? Sponsorship can deliver the on-site, one-on-one and group interaction that allows audience members to interact with one another and with sponsors, face to face in real time. Not in a commercial, not in a text, but in real live face-to-face interaction! The most important attributes for building and maintaining a relationship (be it with your loved ones or a property/sponsor) cannot be achieved without in-person communication. As a brand, property, or consumer, to truly build a relationship, you need to eventually interact face to face and in person. Otherwise, your engagement is merely transactional. Sponsorship can deliver the interaction that brands and properties need with their target audience that other channels cannot.

Reality Check: When sponsorship programs are done right, these four things happen and a sponsorship works and delivers results to all three parties!

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