Sponsorships - The fundamentals

My name is Subramanian Iyer commonly known as Subu in the industry.

I have had the opportunity to work extensively in the media, experiential, music and sponsorship business for the past 18 + years.

My previous company Entco Media Pvt Ltd was acquired by global music giant Believe Music in 2019.

Post my acquisition period with Believe i had 2 choices, continue to be a part of a large MNC or Start something new. After a lot of deliberations, I decided to choose the later.

I knew, with previous entrepreneurial experience and a previous acquisition, on-boarding investors was not a challenge. 

The real task at hand was to:

1. Work on the right idea that allows me to think again.

2. The idea should clearly be a white space, uses my experience and network, brings back my passion & importantly an opportunity where lots of work still remains to be done for the industry at large.

So, I decided to take the tough road, and launched Sponco with the vision of redefining the sponsorship landscape in the country. I knew it’s going to be tough to scale this up both on the brand and organiser side ... so we clearly made a choice to start on the brand side, indirectly supporting the organisers and of course in the long run support and create sustainable business models for both brands and organisers.

At SPONCO, we align brands with passion points-music, arts, sports, culture and cause.

Why am I starting this, Blog?

I have had the privilege to start early in this industry. When I had created my own industry IP Back in 2018 called India Sponsorship Summit, where we used to get over 50 CMO’s to come and talk on sponsorship, it was an instant hit, reason being there was no knowledge sharing platform and even back then our intention was to give back to the industry.

With Sponsorship Simplified I intend to write simple blogs that can:

1. Educate young people starting in the Sponsorship industry.

2. Go back to the basics & fundamentals

3. Bring in a collaborative culture between organisers.

4. Provide global & local insights

5. Solve some of the key challenges in the industry

6. Eventually Simplify the approach to sponsorships.

   
   

   

In this short blog I'll cover:

1. What is Sponsorship?

2. Understanding how sponsors look at ‘Target Market’

3. Sponsorship Audiences & Objectives

4. Exchange of Relationship in Event Sponsorship

5. Potential role of Sponsorship marketing in the product adoption process

6. Large passion points for Brands

7. Sponsorship Process Model

8. Current Indian Scenario

9. Key Reasons for Increased interest from brands to explore Sponsorship as a Marketing medium

10. Current challenges in the industry

11. The Opportunity

Let’s start with revisiting what the definition of Sponsorship is

I. What is Sponsorship? 

Sponsorship(Definition): Sponsorship is a cash and/or in-kind fee paid to a property (typically in sports, arts, entertainment or causes) in return for access to the exploitable commercial potential associated with that property.

For Brands - Sponsorship provides a platform to reach a targeted audience, enhance brand image, sales/ trail opportunities & increase brand awareness.

For IP’s/ Properties/ Projects - Benefit from additional revenue streams, increased visibility, and opportunities to share their story with a broader audience.

A successful sponsorship is built on alignment, activation, and measurement. Alignment occurs when the brand and property share similar values, goals, and target audiences. Activation brings the sponsorship to life through engaging experiences, promotions, and campaigns that resonate with fans. Measurement is crucial for understanding the sponsorship’s impact and making data-driven decisions

II. Understanding How do Sponsors look at the phrase ‘Target Market’

Target Market simply means that group of customers whom the organisation (the sponsor) wants to communicate with.

These groups can be identified by:

1. Demographics- age group, gender, education, income group

2. Geographics- place where consumption or purchase takes place

3. Decision makers- those who make the purchasing decision

4. Behavioural – aligning customers, by product usage: light, medium, heavy or by loyalty to the brand

5. Distribution- where customers purchase or consume the product

III. Sponsorship Audiences & Objectives

  IV. Exchange of Relationship in Event Sponsorship

V. Potential role of Sponsorship marketing in the product adoption process

VI. Large Passion Points for Brand Sponsorships

1. Music

2. Sports

3. Cause

4. Arts & Culture

VII. Sponsorship Process Model

VIII. Current Indian Scenario

1. Sports Sponsorships are leading the way thanks to marquee properties like IPL, Pro-Kabbadi & ISL in India.

2. Entertainment has had a slow start but will see a consistent rise in the next few years with Music Festivals & Large format international IP’s & concerts making their way to India.

3. Cause/CSR, technically is the largest spend due to the government mandate of spending 2 % of your profits on CSR activities. Over 27,000 Cr was spent on CSR in FY-24, however the exact spend on Sponsorships & promotions is hard to gauge.

4. Currently on ground sponsorship market is dominated by Alco-Bev brands. But with the current Government, they expect it to come down heavily on the surrogate ad market, other sectors will have to be targeted collectively to keep the momentum going in the short to medium term.

IX. Key Reasons for Increased interest from brands to explore Sponsorship as a Marketing medium

1. Inefficiencies in traditional media- Clutter & zapping

2. Government policies on the advertising of alcohol, tobacco and related products.

3. Greater media coverage of sponsored events.

4. Avoiding clutter.

5. Consumer preferences are changing, lesser use of traditional media & also options available to switching, recording of programmes, on demand tv, skip options etc.

6. The relationship between an event and the sponsoring brand can enhance the brand's equity.

7. The ability of Sponsorship to tightly target specific geographic areas or demographic groups.

8. Brand awareness / image enhancement which is more targeted.

9. Economical medium to offer hospitality and entertainment options for clients of the Sponsor.

10. Product placement, creating product experiences, Sales, product promotion, database additions & reinforcement opportunities

X. Large Challenges of the industry:

1. Timing of the proposals

a. Different promoters/ agencies reach out to brands at different times due to lack of advance planning or last-minute decision to partner/ organise shows.

b. India is a unique market where largely the event management companies are trying to become a promoter/ IP owner to bring some consistency and differentiation to their business. There are very few players who are full time organisers. While the organised promoters like the large ticketing players & a few large promoters are able to control the timing, most players continue to operate in a way where sponsorships for their IP’s/ events will always remain a challenge.

2. Consistency in Deliverables sheets & proposals

a. Most companies roll out deliverable sheets which are not consistent.

b. There is limited thinking behind how the deliverables will create large impact for the audience that the IP/event is aiming to target through pre-amp, event days & post the event.

3. Costing/ Pricing

a. Organisers arrive at the Sponsorship pricing based on the overall costs of the event. This is a highly incorrect way of pricing the sponsorships, but they are left with little choice as sometimes we don’t have the right venues / ticket sales are unpredictable in most cases.

4. Leverage Ratios

a. In the west typically when brands sponsor the Leverage (amplification ratios) are generally 1: 1, which means if they are spending a Dollar on Sponsorship, they will set aside another dollar for amplifying the association over and above whatever they are getting as a part of their sponsorships.

b. In India, this Number is quite dismal ranging from 0.1-0.2 percent.

5. Measurement

a. Measurement & ROI remains the largest challenge of the industry

b. There is no common mechanism or tools available that can be used to evaluate sponsorship proposals.

6. No Sponsorship Policy

a. Most companies spending heavily on sponsorships still don’t have a Master Sponsorship policy in place.

7. Customisation of Proposals

a. It’s quite challenging for agencies to customise proposals for each brand. But the unfortunate fact remains that without doing this, the chances of the proposal getting noticed is less than one percent.

8. Building a community/audience

a. One off events don’t have the capability of building an audience

b. IP’s try to build a loyal audience over a period. However, it takes many years before this can happen & by then a newer IP comes within the same space resulting in sponsors & audience moving to the new IP.

9. People movement within brands

a. This remains a key challenge. Brands are handled by people who have their own choices. Sometimes when brand managers/ marketing heads change, the plan for the brand spends change as well resulting in closure of some long-term associations.

XI. The Opportunity:

1. Needless to mention this, but experiences have and will always remain a top priority for sectors who have tasted success with it.

2. The opportunity lies however in traditional media spending clients and convincing them to see on ground media as a part of their annual plans. As an industry we must collectively improve the way we pitch our ideas & plans.

3. Entertainment, Sports & Cause will see double digit growth in the next 5 years (organised & unorganised).

4. Smaller cities will see more entertainment coming their way (apart from movies ) as infrastructure & disposable income rise. The fact is that brands also want to penetrate to the smaller cities and the organisers & IP creators must start small now in these cities to taste success at a later stage.

Addressing the problems the Sponco way:

Our mission is to lead brands towards innovative, impactful, and enduring partnerships.

We align brands with passion points—music, arts, sports, culture, cause and more. We find and secure the right properties/platforms that are business-case tested, fully activated and measured, with the right assets for the right investment, and in support of brand and commercial strategy.

Feel free to reach out to me or the team to discuss further on either subu.iyer@sponco.in or info@sponco.in .