Why Companies Sponsor Events (and How to Do It Right)
Local businesses that sponsor events usually have more in mind than marketing. Supporting local athletic events, trade shows, conferences, and other activities is a way for companies to support the causes that matter and add real value to the community that may not always show up on a balance sheet. Of course, there are real benefits of event sponsorship that small businesses can’t overlook.
At the same time, event sponsorship requires a degree of consideration and evaluation to ensure alignment between the event and the brand, a detailed understanding of the event’s audience, and to determine your return on investment.
We’ll look at a few of the reasons local businesses support events, how well they work, and how to track the event’s impact on your organization.
Why Do Some Businesses Sponsor Local Events?
Aside from simply wanting to support causes that matter, businesses know events do deliver value. Even if establishing a clear return on investment for event sponsorship isn’t the top priority, there are advantages to getting involved.
Here are just a few of the benefits of sponsoring local events:
1. Raise brand awareness.
Sponsoring events is an effective way to introduce your brand’s goods or services to a large audience. This is especially important for younger companies that need to establish themselves in the community. While every business is different, start-ups spend more on marketing than established businesses.
New businesses spend 12-20% of revenue, though VC-backed businesses often spend significantly more.
Established brands typically spend 5-10%, although some industries spend more.
We have some tips on creating your marketing budget to make it easier to determine how much to spend on marketing.
2. Leverage brand alignment.
Choosing the right events to sponsor allows a brand to tap into a qualified, informed audience already receptive to its products or services. Sometimes, these associations are obvious; it’s why bike shops sponsor bike races or running companies sponsor the local 5K. In other scenarios, the alignment is based on demographics and interests; banks may sponsor college fairs to showcase student loan services, or restaurants may sponsor events that attract many participants from out of town.
If you’re approached to sponsor an event or tradeshow, take time to consider how well the event aligns with your business sector, demographics, and objectives. There may be more alignment than you initially think.
3. Gain a competitive edge.
Potential customers know which local businesses sponsor their favorite events, but they also notice who don’t. In some cases, customers will support brands that sponsor events over those that don’t, even if it means driving a little further or paying a little more.
Companies that sponsor nonprofit or charity events aren’t just supporting a cause; they’re showing that they care. And that other company? They must not care as much. Over time, this leads to increased brand loyalty, a factor that improves customer lifetime value through increased retention and allows brands to invest more in new customer acquisition.
How to Sponsor Local Events
Small businesses typically set aside a dedicated slice of their marketing budget to sponsor events each year. Having a set event sponsorship budget makes it easier to calculate return on investment. It keeps your marketing team or sponsorship and events coordinator (hey, what’s up) focusing on maximizing your impact on a few important efforts. It may also make it easier to say no to the many, many, many event sponsorship requests local businesses get all year long.
Support Event Promotions
It’s better to support something you care about at a higher sponsorship level than to sprinkle small donations across the calendar. Go beyond the pre-determined events sponsorship levels at most festivals, races, and trade shows to make your agreement align with your objectives. Balance on-the-ground signage with perks that position people to add value to digital marketing channels, such as:
Social media mentions
Brand logo and links on high-volume pages, such as the results page of a bike race
Competitions that gather first-party data, such as signing up for your email list or following your social media accounts, to win a free entry
Work with event organizers to negotiate a sponsorship fee that makes sense for you, while contributing to the cause by marketing the event across your channels. This mutual promotion will attract more attendees and more closely associate your brand with the event. We recommend investing as much time promoting the event as the event does promoting you - that’s the best way to maximize your sponsorship dollars.
2. Show Up
Simply writing a check won’t do very much for your business. Local events do their best to represent sponsors in the lead-up to the big day, but a few social media posts won’t move the needle. You’ll get more for your money and positively impact the community by being there. If you can, bring a few of your staff to shake hands, volunteer, and play a role in the event’s success. Offer to volunteer at aid stations or coat-checks, stuff packets, or other creative ways to put your team in front of attendees.
3. Measure the Results
Even if your sponsorship is purely focused on supporting a deserving cause, you owe it to your business and employees to evaluate the cost and return of event sponsorship. There are a few ways to do this that are relatively light lifts, including:
Check social media engagement - Did you get more likes, new followers, or shares?
Brand mentions - Look in Google Search Console to see if branded queries increased before and after the event.
Site traffic - See if site sessions increase before and after the event, especially if you provide attendees with free swag or a coupon with a QR code.
If you don’t have time to do the post-event sleuthing, tag us in to take a look! We offer event sponsorship coordination as a project or retainer to provide small businesses with an accurate look at their event sponsorship return on investment. From creating a dedicated event campaign, complete with social media graphics, engaging emails, and a dedicated landing page, it’s a smart way to maximize ROI from the events you support.
The Impact of Events on Local Economies
Many communities rely on events to strengthen local economies and stimulate tourism. Calculating events' economic impact is trickier as it involves a mix of direct and indirect impacts.
Direct economic impact—This describes the expenditures of participants, their families, and attendees in the immediate vicinity of the event. Think hotel accommodations, dinner after the race or concert, and other spending directly related to the event.
Indirect economic impact—The net increase in expenditures from nearby businesses and workers as a result of the event. Think of the barista taking a participant’s tip and going out to dinner or buying a new shirt. This also includes additional working hours or spending to accommodate event traffic.
It’s important to note that most local events in Northern Michigan aren’t exactly local. Events like the Bell’s Iceman Cometh Challenge are over 95% non-locals, generated $4.7 million in direct spending, and contributed roughly $35,233 in additional tax revenue.
Measure the Impact of Your Event in the Community
Local events bring people together, strengthen the economy, and serve as treasured institutions for generations of families. We help small businesses and nonprofits make a big difference. Get help with event marketing, analytics and reporting, and event marketing consultation from Sovis Media. Let’s get started; get in touch today. (Tomorrow is totally fine, too.)