Hey, we admit it, our industry is rife with buzzwords, but we like to keep it simple in our speak. And in fact, we often translate the “crazy” for our clients. See below for our glossary of buzzwords to help you decode the sponsorship industry:
As it relates to sponsorship, “activation” is marketing activities by a sponsor to leverage and promote their sponsorship. Activation typically integrates a cohesive message across multiple marketing channels including digital, social, media, experiential and retail. Depending on category, rights and the sponsorship property, activations can range from minimal investments to over five times the sponsorship rights fees. Typical activation costs are at least equal to the sponsorship rights fees to properly leverage the sponsorship.
One or more demographic profiles that a sponsorship property, event or creative execution impacts. Typically the target of the sponsor and the audience of the property must align for effective sponsorship.
A full assessment of a brand’s sponsorship investments and strategy including recommendations of total investment, market allocation, strategic passion point alignment, operational approach and activation.
Specific element that a sponsorship provides a brand as part of a sponsorship deal. Assets primarily fall into three categories: market-value assets (things you may be able to purchase on the open market like tickets), impression-based assets and intellectual property. Assets can be wide ranging across digital, social, events, appearances, radio, TV, out of home, player rights, tickets, hospitality and beyond.
Advantage defines Brand Experience as any marketing activity which leverages consumer passion to ignite action. See here for a further definition of brand experience.
Sponsorship programs aimed to influence corporate purchase decision makers and businesses, rather than individual consumers. Depending on the type of B2B sponsorship, companies may be aiming to influence sales teams, procurement, CXOs or a variety of other corporate decision makers. Generally B2B sponsorships are activated differently than B2C sponsorships, with corporate hosting and sales incentive programs being widely used tactics.
The sole product or service brand within their respective category to be associated with a sponsorship property. For example, a bank client may negotiate category exclusivity in the retail banking category with a Food & Wine Festival, but have a non-exclusive agreement within the credit card category. Typically, sponsors pay a premium to secure exclusivity within contracts in order to block competitors from also being a sponsor of that property. If properties feel that they have leverage in the marketplace, they will often look to split up categories into as many exclusive designations as possible.
Information for audience consumption via various mediums such as video, audio, written or other arts. Content is a key component of storytelling around sponsorship.
Cost Per Thousand (CPM)
Used to compare certain sponsorship assets (signage, digital, etc.) versus other media costs.
A real-time measurement mechanism to track sponsorship or experiential marketing performance.
In sponsorship, the designation is approved language that the sponsor can use in the marketing mix to identify their relationship with the property. Each property is different in how they allow sponsors to use their intellectual property, however typical designations include:
Proud Partner of …
Official Partner of ….
Official Telecommunications Partner of…
Official Sponsor of …
Exclusive Telecommunications Sponsor of …
The use of personalities (typically either in sports, entertainment or lifestyle), with significant reach to promote a brand, product or service and help drive objectives through their association. Endorsements are often used as an element of activation within sponsorship.
Annual increase in sponsorship fees, often tied to inflation over the course of the agreement term. Also can come in the form of providing the sponsor with upfront financial flexibility in order for the property to sell-in the sponsorship.
A point of view (POV) of a specific sponsorship opportunity looked at primarily from a qualitative perspective. Evaluations are typically performed when a property reaches out to a potential sponsor and the sponsor weights the benefits and considerations across investment, reach, efficiency, available assets against objectives, business opportunities, property prestige and other benefits/considerations.
First Right of Refusal
Element of a contract allowing a sponsor the right to match any offer the property receives during the term within outlined select product/service categories. First right of refusal is negotiated contractual language, which helps protect a sponsor in the case that they do not have category exclusivity in their sponsorship agreement.
The sponsorship property delivering on all contractual elements of an agreement with a sponsor. Typically a property sends a “proof of performance” overview post-event or at the end of the sponsorship term to recap and prove that all contractual elements have been fulfilled.
A negotiated element of a sponsorship agreement to allow for “working dollars” within a sponsorship agreement to be flexible on where they can be spent. For instance, Brand X may have a $150,000 flex fun with Property Y which can be spent on tickets, video footage or digital media. Flex Funds are becoming increasingly more common in sponsorship agreements to help ensure that brands have adequate marketing dollars in place to properly leverage the sponsorship.
Marketing activity to give the impression of association/sponsorship of a property, without the actual legal rights to use to that association and intellectual property.
Impression Based Assets
Impressions based assets include courtside signage, LED ribbon boards, out of home and digital media. Advantage uses an impressions-based advertising equivalent valuation. This methodology provides a value for each type of branded asset that is comparable to a sponsor’s spending in general advertising. The value of each asset is adjusted based on the quality of the exposure as well as the percent of the relevant population that will likely be impressed by the exposure.
The value of specific marks, names, terms, emblems or logos that a property provides a brand the ability to use as part of a sponsorship agreement. For example, the NCAA’s intellectual property includes the NCAA blue disk, logos to 89 championships and the right for sponsors to use the terms “NCAA” and “March Madness” in marketing. Advantage uses a proprietary, brand-value based methodology to calculate the value of the sponsored asset’s intellectual property, which takes into account the size of the property’s fan base, fan consumption metrics and property financial metrics. The size and scope of the agreement, activation execution, and other strategic considerations also get factored into our proprietary model.
A sponsorship involving the exchange of products or services rather than cash payment. Sponsorships can also be a hybrid of in-kind and cash, depending on the needs and investment availability of the property and the sponsor.
Key Performance Indicators (KPIs)
KPIs are specific quantitative results that a brand is looking to accomplish through sponsorship activation, and often-times are not financial based but rather objectives-driven. For example, brand X may have a primary objective of generating qualified leads with a KPI of capturing 10,000 qualified leads over the course of a given program.
Consumer information captured from an activation which can be followed up upon by the brand to generate additional awareness, consideration or sales. Depending on the product or category, a lead may only be an email address, while in other circumstances it may include name, phone, email, address, etc. To further segment leads, brands may ask questions in the data capture process to determine whether leads are qualified or not.
The use of intellectual property on retail products in exchange for a royalty on sales and minimum commitments of sales. For example, a license may apply to use the Auburn Tigers logo on hats and t-shirts in exchange for a $10,000 guarantee and 3% royalty on all wholesale sales. Typically, licensees are not considered sponsors, however we are seeing a progression of certain properties using traditional licensee categories as new areas to sell more traditional sponsorships.
Free or discounted sponsorship assets provided to a brand to make up for an unavailable contractual asset, disagreement, mistake or underperforming asset.
Market Value Assets
Assets often included in a sponsorship agreement which can be purchased in the open market. Examples of market value assets include tickets and merchandise.
Methodologies exist to effectively evaluate and judge whether or not a sponsorship and its activation are driving results and helping the business meet its overall objectives. The best models and frameworks share some fundamental characteristics. Return on Investment (ROI) is a sophisticated approach for those who already employ marketing mix analyses and econometric modeling. Return on Objectives (ROO) is an approach which qualitatively evaluates the impact of sponsorship on specific business objectives.
Entitlement of a property or venue. The naming rights sponsor often is the largest sponsor financially for that property and typically includes product/service exclusivity. Typically naming rights partnerships require the property to refer to the entitled or presenting name in all marketing outlets, including broadcast television.
Predetermined goals that a brand is looking to accomplish from sponsorship or experiential marketing. Primary and secondary objectives should drive assets, activation plans and creative to maximize the return on objectives for each campaign.
A negotiated element of a sponsorship agreement to allow either the property or the brand to terminate the sponsorship agreement early. Opt-out clauses are often negotiated by the brand to provide financial flexibility in later years of the agreement to account for potential changes in financial stability or changes in strategy. Properties will occasionally negotiate in opt-out clauses if they believe the value of the property is likely to escalate significantly over the course of the term.
Brand to brand collaborations where two brands combine efforts to achieve a common objective. Often the two brands share similar target audiences and amplify a shared message with the power of two company’s marketing channels.
Ability to provide intellectual property rights or other sponsorship assets to a retail partner. Often pass-through rights restrict how large the third party’s logo can be in relationship to the sponsor’s logo and clear space requirements from official sponsor designations. Pass-through rights are especially valuable for consumer brands, products and services which do not sell directly to consumers (e.g. consumer package goods).
Taking the interests that consumers participate in or follow during their everyday lives, whether sports, lifestyle, entertainment or worthy causes, and using that as a marketing communication vehicle.
Merchandise with a brand logo used as giveaways during sponsorship/event activations or promotions. Typically properties will restrict the types of premiums that sponsors can give away at events to avoid projectiles and conflicts with any licensee-made products.
The entity which a brand, product or service sponsors. As part of the sponsorship agreement, the property provides the brand with specific assets.
A document or presentation from a property to a potential sponsor, outlining proposed assets in exchange for an investment from the potential sponsor. The proposal usually includes insights on how a potential sponsor’s product, service or brand aligns with the property and other quantitative considerations on why the property should be considered (reach, attendees, fan purchase behavior, etc.).
Attitudinal and behavior statements that help define profiled targets. Psychographics can help lead to insights that define activation planning.
Request For Proposal (RFP)
In our industry, request for proposals are sent from client to agency to assess the creative thinking and capabilities of a prospective agency partner. While some agencies dread and avoid the RFP, we see the RFP process as an opportunity to show our passion and prove to them we have the right people, tools and fresh thinking to bring smart solutions to the next level. Have an upcoming RFP or RFI in sponsorship, experiential, creative or hospitality?
Sponsorship is not a standalone discipline. Advertising delivers information, but sponsorship delivers emotion. Sponsorships allow brands to tap into fan passion and drive image, perception and consideration among fans. Effective sponsorship activation can be strategically integrated throughout the marketing mix and deployed across channels. Brands often use sponsorship to:
Build brand awareness and/or improve marketplace perception
Increase purchase consideration and drive business
Establish an emotional connection to differentiate from competition
Amplify brand message and improve efficiency of advertising investments
Create unique/exclusive ownership position
Insights and strategic direction to help steer sponsorship strategy, activation, measurement or help to audit current sponsorship portfolios.
Underlying message that weaves through all communications and touch points of a campaign. For experiential marketing campaigns, a thematic will often be developed to immerse consumers into brand storytelling. For sponsorship, a thematic will often be developed to authentically tie consumer passion to the brand, product or service and make the sponsorship relatable to the target audience. See how we designed and activated the “Road to Homecoming” platform for LG Electronics and Best Buy across NCAA Football.
Provides an accurate assessment of the market value of a sponsorship to a sponsor. Advantage’s valuation methodology uses a proprietary regression analysis, industry standard metrics and our clients’ objectives to provide a customized approach to asset and sponsorship valuation.
Hopefully this helps you better understand what you’re looking for, but feel free to drop us a note if you want to chat and learn more about our way of thinking. Be sure to check out the other glossaries to fully verse yourself on definitions of keywords across our business: creative/content (hyperlink), experiential (hyperlink), and events/hospitality (hyperlink).