What’s the Difference Between Sponsorship and Advertising?
Companies and organizations seek sponsors for all sorts of reasons, some for financial assistance and others for promotions. If you’re looking for help in the promotional department, should you be searching for a sponsor or maybe an advertiser instead? What’s the difference?
Advertising actually falls under the wide umbrella of services offered by sponsors. When you find an advertiser, it’s typically a one-time relationship that’s very short-term in nature. Through sponsorship, you can develop deeper, stronger partnerships that could pay back dividends on both sides now and in the future.
If you’re still feeling a little fuzzy on sponsorship versus advertising, then I’d encourage you to keep reading. Ahead, I’ll define both sponsorship and advertising, discuss more about the differences, and even delve into how outcomes and ROI are measured on both sides.
What Is Sponsorship?
It’s like I’ve said on the blog, sponsorship is a verb. When you seek a sponsor, you’re looking for a partner to help you achieve your company goals. As I mentioned in the intro, these goals can be financial in nature, such as getting money to host an event. You might also want clout and promotion so you can grow your business or organization.
Those are just a handful of goals a sponsor can help you achieve. The others are:
- Thought leadership
- Branded content
- Media exposure
- Speaking opportunities
- Exhibit space
- Content marketing
- Social media
- Lead capturing
- Employee engagement
- Product placement
- Logo placement
- Experiential marketing
A sponsor is not necessarily an investor, nor are they are a donor. They can assist in all sorts of areas and industries, from sports teams and athletes, marketing companies, nonprofits and for-profits, and more. The basic premise of a sponsorship doesn’t change whether you’re part of a school, a sports team, or a charitable organization.
Sponsor relationships are two-sided. In exchange for their promotion or money, the sponsor wants to get something from you as well. This is where your sponsorship package comes in handy as you lay out all the assets that make teaming with you worthwhile.
What Is Advertising?
While sponsorship can encompass advertising, the opposite is not true. Advertising is a type of marketing tactic in which ads are placed to promote a company or its specific products and/or services.
For example, when you go on a website, unless you have an ad blocker, then you’re bombarded with advertisements. The ads you see are not randomly placed, but strategically instead. A company bought those ads and chose just where to put them for max visibility.
When you watch a video on YouTube and you get an ad in the middle, that’s advertising. So too is a promotion for a product from a company you don’t follow as you’re scrolling through Facebook or Instagram.
Advertising is not merely Internet-based. Television commercials were the form of advertising for decades. Companies still promote themselves through TV ads, radio commercials, magazine or newspaper ads, mailed brochures and catalogues, and on billboards. All forms count as advertising.
Why Sponsorship Is More Powerful
I won’t sit here and tell you that advertising isn’t powerful, because it certainly is. It’s how millions of companies put their name out there and get consumers to buy their products and services. From a relationship perspective though, I’d say sponsorship is way more powerful.
There are several reasons for this, so let’s get into them now.
Sponsorship Isn’t One-and-Done
When you seek out a billboard placement company or a TV station to get your ad on a network, what kind of relationship do you have with these people? It’s not a very deep nor profound one. You give them money, they provide a service, and that’s that.
Unless you have many TV ads or billboards planned for the future of your company or organization, then you probably only work with these parties once.
Now, granted, sometimes that happens in sponsorships too. However, with all the time and research you dedicate to your sponsorship strategy, from determining your best assets, valuing them, creating a winning sponsorship package, finding a point of contact through the sponsorship company, and then prepping for those first meetings, you typically get to know a lot about your sponsor and vice-versa.
You see where intersections exist between you two, or where they could exist through a partnership. A lack of commonalities can sever the relationship early before anyone puts in too much effort.
This lets you forge a deep, lasting relationship. After successfully achieving both your goals and that of your sponsor’s, they’re often far more willing to work with you for a second and maybe even a third time. Having a powerful ally in your corner is majorly beneficial.
Sponsorship Encompasses Advertising Too
There’s not necessarily a need to choose between sponsorship or advertising when you can have both. Remember, sponsors can provide advertising, or at least point you in the direction of another trusted associate who can. If you can kill two birds with one stone, so to speak, then why wouldn’t you?
However, if you went to your TV or billboard advertiser and asked them about logos, social media promotions, or event funding, they’d look at you like you had sprouted a second head. They don’t offer any of those services, so you’d have to go to yet another company to get your goals met. This can get expensive fast.
Everyone’s a Winner
Do you hate losing? I do too, as do most people. It’s not a great feeling. Sometimes, advertising can make you feel like a bit of a loser. You can spend hundreds to thousands of dollars on a billboard or some primo website domain advertising only not to see the clicks, site traffic, and revenue match anything close to your ad spend.
With sponsorship, everyone is a winner. Your sponsor wins because you’re helping them achieve some of their goals. You win because you get what you want through the sponsor, be that a great promotional partner or a financial sponsor for your gala or event. Oh, and your audience wins because your organization or company works hard to treat your audience well, and it shows.
How Advertising Outcomes Are Measured vs. How Sponsorship Outcomes Are Measured
As promised, next, I want to talk about the different ways ad outcomes are measured compared to sponsorship outcomes.
Advertising Outcome Measurement
What a successful advertising campaign is to a small business would probably be a pittance to a larger company. That’s why some widely accepted metrics are favored for measuring whether your ad campaign was a smash or a dud.
Here are some of those metrics:
- Conversions: How many leads (not-yet-customers) saw your advertisement, went to your website, and decided to buy a product/service or sign up for your newsletter? These converted leads are a good sign that your ad campaign was a worthwhile venture.
- Return on investment: Advertising isn’t cheap. If you’re going to spend all that money, you want to know you’re going to make it back. That’s why ROI is all about.
- Viewers: How many unique people saw your ad? If it’s just a few hundred, then you have to ask if it’s the ad itself, the advertising channel, or the ad placement that’s to blame.
- Click-through rate: Just because someone sees your ad on Facebook or their favorite news website doesn’t mean they’re going to interact with it. The click-through rate tracks which unique viewers clicked the ad.
- Impressions: The countable number of times your ad is fetched is the impression. The downside to tracking impressions is this metric doesn’t accommodate for unique viewers, so the same person can be counted three times if they interacted with your ad on three separate occasions.
Sponsorship Outcome Measurement
Not so long ago, I wrote a post on sponsorship ROI metrics. These can tell both you and your sponsor company whether the partnership is one worth continuing and replicating again.
To recap from that post, here are a handful of metrics to begin measuring:
- Email click-through rates: Click-through rates also apply to email. When you send sponsorship-related emails to your audience, such as to promote an event, how many people click the links inside? The email click-through rate will tell you. This is different from the email open rate, which informs you of how many people opened your email.
- Customer feedback: This feedback comes directly from the customer in the form of surveys, reviews, testimonials, and other requests for opinions. You’d aggregate all your feedback to gauge how your customers truly feel about you.
- Donations/sales: If your sponsored event fulfills its goals, then you should see your donations go up if your organization accepts donations. If you’re part of a company, you could have an uptick in sales after your sponsor gets involved.
- Event attendees: If you are hosting an event, knowing how many people registered versus attended is a very valuable metric. You can use such methods as badge scanning, mobile check-ins, ticket access, or USB card reader swiping to track everyone who enters the building for your event.
- New customers: Your sponsor’s audience will begin bleeding into yours and vice-versa once you deploy the plan you two created. You should thus expect new customers from the partnership.
Sponsorship and advertising are both great methods for getting your name out there into the world, but I’d recommend sponsorship every time. Not only could you get advertising services as part of a sponsor partnership, but you can create a more lasting professional relationship that could serve your organization well now and in the future.
ABOUT THE AUTHOR
Chris Baylis is the President and CEO of The Sponsorship Collective and a self-confessed sponsorship geek.
After several years as a sponsor (that’s right, the one investing the money!) Chris decided to cross over to the sponsorship sales side where he has personally closed tens of millions of dollars in sponsorship deals. Chris has been on the front lines of multi-million dollar sponsorship agreements and has built and coached teams to do the same.
Chris now spends his time working with clients to value their assets and build strategies that drive sales. An accomplished speaker and international consultant, Chris has helped his clients raise millions in sponsorship dollars.