Changes in the economy, fragmentation of the media and demographical changes have all necessitated the shift from traditional marketing mediums and the demand for a new and better way of communicating with key consumer audiences. In the past, sponsorship was almost exclusively the domain of the sports industry, but corporations are increasingly taking advantage of the many benefits sponsorship affords as a marketing tool.
Decreasing Efficiency Of Measured Media
Although the costs of traditional advertising continue to rise, ratings and readership are declining. More importantly, consumers are not paying attention to ads. In television particularly, the popularity of digital video recorders such as TiVo has made viewers’ ability to avoid commercial messages easier and more automatic. Sponsorship, on the other hand, provides opportunities for embedded advertising, where messages are incorporated right into the action and cannot be easily overlooked.
Changing Social Priorities
As issues such as poverty, the environment, and AIDS loom larger, there is a growing realisation that the needs of society and the interests of business overlap. Buyers are demanding to know where a company stands on social responsibility before they purchase its products. Making the world a better place is now seen as a prerequisite to achieving consumer affinity and consumers are more likely to respond to companies that align themselves with community responsibility and improved quality of life. When a company sponsors, it is providing something that its consumers care about and is therefore more likely to attract loyal customers.
In response to the fragmentation of the mass media, companies need alternative methods to communicate sales messages and deepen their relationship with customers. Sponsorship, which is the most direct channel of communication, is tailor-made for this. It reaches people in an environment that matches their lifestyle and interests, rather than impose on them. Sponsorship speaks to the public, not at them, thereby creating opportunities for two-way dialogue.
High Consumer Acceptance
Traditional media is less effective than ever and many of the new technology-based media alienates consumers. For example, a study showed that 75 percent of consumers view phone solicitation as an invasion of privacy. Public response to sponsorship, on the other hand, is overwhelmingly positive because it is seen as a form of marketing that gives something back.
The 2013 Cone Cause Evolution Study found that 89 percent of consumers said they would be likely to switch brands to support a product that is associated with a cause they cared about. More crucially, the study also found that 54 percent had purchased a product associated with a cause they cared about in the previous 12 months.