Advantages and disadvantages of sports sponsorship

If you’re interested in sports marketing, it’ll only take a quick browse of the internet to bump into a rather awkward question: “what are the advantages and disadvantages of sports sponsorship?” In short, what are the benefits of sponsorship in sport or the benefits of sponsoring a sport team? Are there any bad side effects? Luckily at RTR Sports Marketing we’re well-placed to advise on the matter, as well as the things that might not work out so well.

Sponsorship in sport: an efficient, modern marketing tool

According to a study by Infiniti Research Limited released in the summer of 2022, the global sports sponsorships industry is expected to grow by $ 44.99 billion during 2022-2026, accelerating at a compound annual growth rate of 18.55%. This impressive feature shows how efficient sponsorship in sport can be in the current marketing scenario.

While sports fans around the globe continue to get improved and easier access to sporting events thanks to pay-per-view services, OTTS and social media, sponsorship opportunities increase in number and effectiveness providing sponsors with an array of benefits and engagement opportunities.

Sure, sponsorship has changed -and luckily so- in the past 20 years, and so did the sports industry. While sponsorship in sport is still a super effective way to build brand awareness and to get fast-lane-access to the fans, it is in creating a positive and healthy image for brands and companies that sports really stand out nowadays and in creating and monetizing engaging content and storytelling for the target audience.

Pros and cons of sponsorship

Before jumping into details, we recommend that if you have any doubts about the advantages or the disadvantages of sponsorship in sport at all you get in touch with a sports marketing agency – they’ll be able to lead you through the processes that you’re likely to encounter, and answer any questions that you might have while considering sponsorship opportunities for your company.

Advantages of sponsorship in sport and sponsorship benefits

Sports sponsorship truly is a 360° marketing tool. Your content marketing, digital media, B2B programmes, PR, hospitality opportunities, promotions and many more activities can be based on your partnership with an athlete a team or sports league. Sponsorship can provide a strong increase in brand awareness and better brand positioning: the two combined elements will lead to brand preference and in improved sales.

The passion ignited by riders, drivers, athletes, or by teams or any other sportsman in other disciplines, can’t be rivaled. Also, often their audiences and fans have longstanding and deeply-rooted allegiances. If you select carefully a sports team or individual to sponsor that matches your brand’s ethos, you’re well on your way to seeing all the advantages of sponsorship in sport and sponsorship benefits come to fruition.

Sponsorship could be a very powerful weapon for your business in your social media and storytelling strategy as well, (think of the excellent job done by Etihad in the Premier League, or Repsol in MotoGP). In short, the advantages are numerous – and all of these things can combine to achieve a great ROI for your brand.

Advantages offered to your business by sponsorships

Sponsorships offer a large number of advantages. Whether you opt for  sponsorship in MotoGP, sponsorship in Formula E or in another motorsports discipline such as Formula 1, or in any other sport, the benefits of sport sponsorship are not exclusively and merely connected to brand awareness. Visibility is only the tip of the iceberg: it is definitely very important and it is the obvious advantage that everybody immediately perceives. However, the list of benefits is much longer.

Let’s have a look at the main advantages that a brand can get by sponsoring a sports team or an event.

Increased Brand awareness

This is a tier-one objective for every large or small business approaching sponsorship: getting your name out there and increasing your target market is a priority for any organization.

Thanks to the extensive media coverage of most major sports series, sponsors can promote their brand to millions and create more efficient advertising campaigns for their marketing strategies.

Globlal, highly popular platforms like Formula 1 and MotoGP provide sponsors with a wide, international demographic and extended exposure on various media, from television to social media.

Campaigns on several platforms

Sports sponsorships and visibility are closely tied together by the large mass of people who follow the teams, the tournaments, and the championships, including both attendees to stadiums or racing tracks and TV viewers or social media users.

Frequently, the audience use a combination of different channels (and devices) to obtain more information on the event. For your brand, this means having a unique opportunity both before and after the event: the opportunity to attract the audience attention while they are discussing a decision or sharing a highlight.

Targeting the audience before, during and after an event, both physically and online, in view of future races/matches/championships, is an efficient way to maintain the attention of potential customers for a long period of time. This strategy should, of course, be implemented using a platform that customers know well, e.g. Facebook or Instagram or a proprietary app thet would give you the opportunity to build your own database.

The more often they see your brand, the more they will get familiar with it and will tend to associate it with the favourite sport they love and follow. This offers you the great chance of joining the conversation, providing significant information to the fans, building a large database, and having a direct relationship with them. Sport and storytelling can join forces to improve and enrich your social platform. You will have at hand exclusive content you will be able to use to fire the passion of your customers.

A targeted fan base

The fan base, including ticket buyers and people interested in and chatting about sport online, is out there, easy for teams to reach and use for their own marketing activities. Brands involved in sponsorship activations have the opportunity to come into contact with their fan base and enjoy the resulting commercial benefits. The more the fan base of your ideal target is close to the fan base of the team sponsor, the greater the return on investments. Having in-depth knowledge of the target (sports lovers in this case) offers the brand the opportunity to accurately select the best suited discipline to establish – through the sponsorship – a strong bond with the fans, who are interested in the sponsor’s products/services, and to engage them at precise times to successfully convert them into actual customers.

B2B & Corporate Hospitality

When it comes to B2B, the advantages of sponsorship in sport must not be underestimated. A high level of corporate hospitality, with gourmet dishes, the possibility to meet players/riders and racers, and privileged viewing positions, is an excellent way to tease your best customers or to hold less formal business discussions in a more exciting context, away from your own office. Which sport offers the best commercial advantages?

Impact on the bottom line

At the end of the day what most businesses care about is if their marketing is bringing in more clients and customers and has a positive financial impact. Long story short: is this creating more money for the company?.

Sure, sales are not always the only KPI to measure a company’s success, but let’s just say they represent a target to focus on for most entrepreneurs.

Data has shown that customers prefer to spend money on products and services from companies sponsoring organizations they care about.

What sport should I use for my sponsorship campaign?

There are quite a few things you need to consider when selecting the right sport to sponsor. Your starting points are your product and your customers. Is the sport you would like to use popular among your target? Has it got good tv coverage and social media impact in the countries where you sell your products and services? Is the sport you are looking at very competitive and entertaining? Or any race/mach is a foregone conclusion? And are the events held right in the country you are interested in?

These are only few of the several questions you have to answer before deciding the direction to go. As experts on the advantages and disadvantages of sponsorship in sport, we can recommend the extremely lucrative world of motorsports with MotoGP or Formula 1 as a great place to start.

MotoGP sponsorship means multiple races per year, hundreds of thousands of viewers, and an international reputation for high-quality racing. That’s before we even get into the B2B, hospitality and digital activation opportunities that are available. Invest in MotoGP and you’ll be well-insulated from any of the problems that you might encounter elsewhere. Anyway, the are many types of sponsorship in sports, like a Formula E Sponsorship.

Read more about Sponsorship Activation here. If you are considering an investment in sports sponsorships, it is essential to exactly know the commercial advantages they can offer. I am pretty sure that you must have already asked yourself how a sports sponsorship can help you achieve your prospect consumers: or, at least, how it can help you improve your ROI; or, which is a far more important point, how all the advantages offered by the sponsorship can be used at best and accurately in a marketing plan. The purpose of this post is to illustrate the benefits you can get from investments in this business area.

Disadvantages of sponsorship in sport

So, we’ve briefly talked about the good things that can come from successful sports sponsorship campaigns, return on investment and the numerous sponsorship benefits- but what about the disadvantages of sponsorship in sport? The reality is that as long as you do your homework, plan in advance, and activate your sponsorship plan the right way, there are very few downsides, anyway in the next few lines we go through some aspects that have to be considered. Sponsorship is very flexible and can be potentially very rewarding in terms of ROI if compared to traditional adv but is more complex to manage. You should be aware of your budget and what this will allow you to achieve.

On top of the sponsorship fees, additional funds for the implementation activities must be added. Furthermore, teams or riders/athletes might fare better from one season to the next – something that shouldn’t necessarily cause you too much of a problem. Are there any other disadvantages of sponsorship in sport? The answer is no, as long as the team or athlete you’re linked with does not get involved in scandals or disgraceful situations. We’ve covered this before: what if the athlete or team we sponsor is caught using performance-enhancing drugs? What if in the middle of a game or a race the behavior of your team is disgraceful? Head over to our article here if you want to know more about how to handle it. Just a hint, make sure that your contract has a clause dealing with such an occurrence.

The benefits of working with a leading sports marketing agency

Sports sponsorship is a lucrative, worldwide industry – so it makes sense that there are tonnes of benefits that you can reap when you delve into this arena and we get that, if you’re trying to understand if sport sponsorship is the right path for you, you’ll want to know what the pros and the cons really are. Since 1995 RTR Sports Marketing has been a leading sports marketing agency with a core business in Formula 1, MotoGP and Formula E, some of the most effective sports to enter if you’re looking to invest in sports sponsorship.

If you’re unsure about your next steps, you may want to have a chat with one of our consultants. We will be more than happy to talk you through all the advantages and risks involved in sport sponsorship. We will be able to answer to your curiosities and we are willing, given a specific (marketing and/or commercial) objective and a budget, to study for you a specific sponsorship program capable to reach said objectives. We are confident that the benefits of sport sponsorship will then become apparent. If you want to talk more about what the ups and downs of sponsorship are, just give us a call – we’ll be waiting!