Sponsorship lexicon and glossary: Understanding sponsorship marketing vocabulary

A glossary (or lexicon) is an effective reference tool when working with all aspects of sponsorship marketing. It’s important to understand the subtle differences between the terms to communicate clearly. We put together a long list of frequently used terms in sponsorship marketing. We suggest you take a deep breath, read our list, and research new terms to understand them well.

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Activation

Also known as sponsorship exploitation or leverage, activation is the amount paid by the sponsors (brands) over and above rights fees in order to advertise or promote the sponsorship association with the property. Sponsorship activation can also refer to an on-site presence with experiential marketing in the case of an event or a gathering. Activation is known to be one of the key success factors in sponsorship management.

Sponsorship rights fees buy brands a seat at the table, but are generally non-working dollars. Activation investments are working dollars that sweat sponsorship assets to maximize sponsorship marketing ROI. Sponsorship best practices recommend a ratio ranging from 1 :0.5 to 1 :2 of rights fees to activation spend. See also: rights fee

Agency effect

When sponsorship decisions are guided by the management’s interest towards a certain field. This type of behaviour is usually detrimental to shareholders because sponsorship is not aligned with business imperatives.

Ambush Marketing

In ambush marketing, another company, often a competitor, intrudes, thereby deflecting attention to itself and away from the sponsor (Meenaghan, 1996). Some protection can be legally granted to protect the property and it’s sponsors, which is the case with the Olympics. See also: Exclusivity

Articulation

In some cases, there is no natural fit between a property and a sponsor. Articulation is the process by which an association is built via storytelling. The activation is used to communicate the pertinence of the partnership. For example, banks can associate with a sport property because of the shared values like excellence and perseverance. See also: congruence

Assets or Sponsorship Benefits

This refers to the items offered to a sponsor within a sponsorship agreement. There are a number of possible benefits or assets but, visibility assets (which give the sponsor the opportunity to showcase its brand), are the most common. Other asset categories include digital communication tools, interaction opportunities, on-site visibility, promotional opportunities, hospitality and broadcast visibility. The visibility awarded as part of the property’s marketing communication plan is also one of the most common assets offered. It is now possible to calculate the value of sponsorship assets from different sources: social media, digital ads, traditional media and on-site visibility. A sponsorship valuation software can provide market-specific value.

Audience

Refers to the attendance, or the number of spectators. Audience can be either direct, people attending an event, for example, or indirect, people watching it on TV. Cumulated audience takes into account multiple visits by the same person. Audience analysis can help rights holders position themselves and be more appealing to sponsors.

Brand

Used to designate either a company or a product, a brand is the unique distinctive identification that allows recognition by consumers. Many brands from various industries are active in sponsorship marketing.

Brand Equity

Customer-based brand equity is the differential effect of brand knowledge on consumer response to the marketing of the brand (Keller, 1993). In other words, a brand is the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another. If the consumer (whether it’s a business, a buyer, a voter or a donor) doesn’t pay a premium, make a selection or spread the word, then no brand value exists for that consumer. (Seth Godin, 2009) Higher brand equity is a powerful tool against competitions or negative publicity. Sponsorship can be used as a tool to increase brand equity.

Broadcast analysis

The process of tracking and valuing brand exposure across all broadcasts, streams, digital media, and social media channels to capture the entire value of a sponsorship

Category Exclusivity

This refers to the rights granted to sponsors to be the exclusive partner in its business category, for example, as the sole provider of soft drinks. It is common to see category exclusivity applied to the banking sector, telecoms, airlines, timekeeping, technology, etc.

Cause Marketing

A marketing program that strives to achieve two objectives—improve corporate performance and help worthy causes—by linking fundraising for the benefit of a cause to the purchase of the organisation’s products/services. (Menon, 1988)

Cause sponsorship is a powerful tool that allows companies to stand out from the competition because they can establish a unique image for themselves: partnerships cannot be exactly replicated.

Clutter

Clutter is the result of too many brands within the same property. Clutter has a negative impact on consumer recall because the brand is lost in a sea of other stimuli. Sponsorship professionals often refer to it as a “Christmas tree” or a “pizza”. While increasing numbers of sponsors are generally a positive outcome for teams and events because of the increased sponsorship revenues, this has added a new challenge for brands who are now trying to be recognized in a sea of other sponsors (Gwinner, 2005).

Competitive Advantage

An advantage that a firm has over its competitors, allowing it to generate greater sales or margins and/or retain more customers than its competition. (Source: Investopedia)

Congruence

Congruence is the pertinence, or the perceived fit between the brand of the sponsor and property. For example, a running show company sponsoring a marathon. Higher perceived fit increases sponsorship effectiveness because the information is best treated by consumers. Synonym: Relatedness, fit

Cost/Benefit Ratio

This is the bottom line of evaluation for sponsors. The rights fees are weighted over the value of overall benefits. Sponsors will receive this precious information with Elevent’s sponsorship valuation tools.

CPM and CPP

CPM (cost per thousand impressions) and CPP (cost per rating point) are both used by advertisers in order to compare media costs. CPM is also used in sponsorship evaluation as a reference to industry standards.

Cross-Promotions

Sponsors joining forces in order to create a promotion around their involvement with the same property.

Difference between sponsorship and advertising

Whereas sponsorship involves a fee paid in advance for future potential communication values, advertising offers a more knowable and more controlled communication. Furthermore, whereas sponsorship requires leveraging (promotional spending in addition to the sponsorship fee) to obtain the greatest value, advertising is often sponsorship’s most valuable leverage (Cornwell 2005).

Digital assets

Series of assets owned by the property online. This includes websites and social media pages. Digital assets are used for digital sponsorship activation.

Event Marketing

Often used as a synonym for sponsorship, it is the communication strategy used to link a brand to an event. See also: Sponsorship

Fair Market Value

The fair market value of a sponsor is a comparable market price for a similar sponsorship deal. This process uses thousands of data points to give you an accurate pricing range of real sponsorship deals in your market, for a similar property.

Gross Rating Point (GRP)

A term used in advertising to measure the size of an audience reached by a specific media or schedule. Specifically, GRPs quantify impressions as a percentage of the population reached rather than in absolute numbers reached. Used by advertisers, this measure can be used as a comparable between different mediums.

Hospitality

Event sponsorship may offer an ideal setting for meeting potential or existing clients, officials or VIPs. Usually in a designated area reserved to guests, services can include food and beverages, tickets, gifts, private tours, meet and greet or parking.

Image Transfer

The mechanism by with image from Brand A will be transferred to Brand B in the consumer’s mind. Image transfer is a common objective of sponsorship: when the brand becomes linked with the event, some of the associations with the event may become indirectly associated with the brand (Keller, 1993). Image transfer can work multiple ways, from the event to the brand and vice-versa, but also between other sponsoring brands. See also: Brand equity, brand image

In-Kind Sponsorship

The exchange of goods or services to cover rights fees, in lieu of money.

Indirect Marketing

This type of communications result in context-dependent associations that are more variable and idiosyncratic than associations developed via traditional advertising messages (Cornwell, 2008).

Interactions

Personal contact between the individuals in the audience and sales reps or promotional agents.

Licensing

The rights to use the property brand and logo, given to another company in order to produce items for retail sales. This right can generally be granted to the sponsors.

Major Sponsor

Level of sponsorship referring to the sponsors holding the most rights under title and presenting sponsors.

Make-Goods

Due to sponsorship’s uncertainty in regards to the amount of visibility received, especially in the case of a live event, properties can offer free time or space, in the case of a program performing under expectations.

Media Equivalencies

Advertising Value Equivalency (AVE) is what your editorial coverage would cost if it were advertising space (or time). Based on a media rate card, this measure is used in sponsorship to evaluate the value of visibility.

Media Sponsor

Broadcast, online, print, out-of-home and outdoor media that provide advertising time or space, to a property in exchange for official designation of media partner. Synonym: media partner

Official Sponsor

Under Title, Presenting and Major sponsors. This often refers to the most basic sponsorship status. Bellow officials sponsors, are usually found suppliers and media partners, with substantially less rights than their counterparts.

Option to Renew

Clause within a sponsorship contractual agreement that specifies the terms of renewal.

Philanthropy

Support for a nonprofit organization where no commercial advantage is expected. Synonym: Patronage

Presenting Sponsor

The sponsor that acquired the rights to place the “presented by” “presents” within the name and or logo of the event. For example: “The Napa Auto Parts 200 presented by Dodge” or “Hydro Québec presents La Nuit Blanche.”

Primary Sponsor

When a property has no title or presenting sponsor, it is the sponsor with the largest set of benefits.

Property or Rights Holder

This refers to any organization with which a sponsor formally aligns itself as part of its marketing or corporate strategy (Farelly, 2008). Typically, these organizations are sports teams, arts organizations, entertainment events or causes. Synonyms: rightsholder, sponsee.

Right of First Refusal

A legal clause granting the actual sponsor rights of refusal for entering sponsors during the agreement or when the sponsorship agreement is approaching its deadline. This contractual element is an important tool to protect a property from getting into the hands of competitors once the sponsorship agreement term ends.

Sales Rights

Rights to distribute a product or service to the audience of a property. For example, pouring rights refer to the exclusive beer supplier.

Sample

Small quantity of a product given to potential consumers for trial.

Signage

All elements of visibility bearing the sponsor’s logo. This includes billboards, banners, LED screens, posters, etc.

Sociodemographic Information

Information regarding social and demographic factors. These include age, gender, revenue, schooling and so forth. Is it used by marketers to better define a target segment or to validate that the audience of an event is indeed of interest with regard to their product consumption.

Sponsee

Synonym of property.

Sponsor

An organization that aligns itself with a property in exchange for money (rights fees).

Sponsorship

Defined by Otker in 1988 as (1) buying and (2) exploiting an association with an event, a team, a group, etc., for specific marketing (communications) purposes. Commercial sponsorship fits quite naturally alongside advertising, PR, personal selling and sales promotion in that its basic function lies in achieving a marketing communications objective (Meenaghan, 1991)

Sponsorship effectiveness

Assessment of the performance of a partnership based on a set of KPIs determined with the brand. Industry benchmarks are provided on comparable metrics such as awareness, opinion, brand favorability, purchase intent, NPS, etc. Sponsorship effectiveness measurement can be done both for brands and properties.

Sponsorship Fee

This is money or in-kind value given to the property in exchange for the right to be a sponsor.

Sponsorship levels

Defined as a hierarchical structure of properties operating within the same sponsorship environment. Mostly common in sports context, this refers to, for example, in ascending order, the athlete, the team, the venue, the league. (Dumais, 2011)

Sponsorship Policy

The sponsorship policy outlines the guiding principles used by brands to select which properties to sign as part of a sponsorship strategy. It also serves as a tool to respond to the multiple sponsorship requests that a company receives. The sponsorship policy should reflect the overall communication strategy, goals and long-term vision of the sponsorship portfolio. It is usually accompanied by a series of criteria in order to evaluate sponsorship demands and make a selection.

Sponsorship Structure

This refers to how the sponsorship assets are organized in a hierarchical fashion. Most structures are pyramid shaped, with a few sponsors with the most assets (title sponsor, presenting sponsor) at the top and more partners at the bottom (at a supplier level, for instance).

Sponsorship Valuation

Sponsorship valuation is the dollar value of the assets according to your objectives, value-to-cost ratio and industry comparables. Sponsorship valuation reports are an unbiased and very precise report that can serve as a decision-making tool or a business case within your organisation. Evaluating sponsorship proposals based on media values is just the beginning. The future of sponsorship valuation lies in having an advanced tool that allows you to know how much your assets are worth, whether your objectives will be met and how the partnership in question will fit with your audience.

Sports Marketing

Focuses on the audience’s emotional connection towards the sport. The universal language that is sport is a great vehicle for global brands as they can cross borders.

Status

This is the hierarchical level associated with the rights granted to sponsors. For instance, it is possible to be a title sponsor, presenting sponsor, major sponsor, sponsor or supplier. The sponsorship status may have different names depending on the property.

Strategic Alliance

A close, long-term, mutually beneficial agreement in which resources, knowledge and skills are shared with the objective of enhancing the competitive position of each partner (Spekman et al. 1998). Sponsorship relationships can grow into a strategic alliance and thus, build a true competitive advantage for the brands that cannot be replicated by competitors.

Supplier

Official provider of goods or services in exchange for designated recognition. This level is usually below official sponsors, and the benefits provided should therefore be lower. Synonym: official supplier

Title Sponsor

When a sponsor’s name is integrated into a property’s name and logo. For Example: The Air Canada Canadian Grand Prix.

Venue Marketing

The sponsorship of a physical site, for instance, tracks, stadiums, parks, public places, etc.