Do you think the term “sponsorships” is outdated and everything should be called partnerships? just an idea I’ve been thinking about…

It was really just an idea I’ve briefly thought about on occasion. A lot of times the terms “sponsorships” and “partnerships” are thrown around and used interchangeably to describe deals between entertainment and sports properties and brands. But does the wording that properties/brands use reflect how they actually see their relationships? Should we be moving towards the use of partnerships (which imply that both sides benefit) and away from sponsorships (which unfortunately has not been very well explained to the general public)?

Your Responses

After I posted that message on Twitter, I got some great responses. Thanks to all who contributed the thoughts below (earliest responses posted first):

rscibetti@JasonPeck I definitely see a mix of both terms. Definitely tells you something about how the entity views the relationships

MJMunson@JasonPeck No, people just need to know what it means. Look up the latin roots for sponsor and you’ll see it is a perfect word for its use.

BizballMaury@JasonPeck It’s moving more & more toward partnerships as deals are multi-pronged. See my NY Post article on Yankees/Audi http://ow.ly/hoef

jpbrunelle@JasonPeck I think it depends on the context, but ’sponsorships’ will remain in play for the foreseeable future. Bigwigs want to sponsor.

MJPatzwaldt@jasonpeck i still think there’s a difference between sponsorships and partnerships…those sponsored tend to have longer term benefits

jeffmard@JasonPeck partnership implys 2-way street, sponsorship implys other “partners” exist. Which is more true? then u have advertiser…

Play3r_VP@JasonPeck sponsorships is out. partnerships are in. it’s about relationships + alliances… NOT about hand outs.

mmahoney13@JasonPeck I think the Sponsor should be emphasized more in many cases, esp PGA Tournaments and even teams. they enable us to do more

sponsorpitch@JasonPeck IMO, not outdated & no need to hide from the term + lots of different types of biz ‘partnerships’.. something more narrow needed

EmilyRCampbell1@JasonPeck There r still true mktg sponsorships out there even tho’ some local partnerships may lean more toward philanthropy.

briangainorRT @JasonPeck poses a great question – thoughts on “partnerships” vs. “sponsorships”? How do you see your relationship with partners?

Darren_Heitner@JasonPeck I love the idea of banning the word “sponsorship”, all successful “sponsorships” are partnerships. Both sides should win.

Sponsorships vs. Partnerships – My Thoughts

Let’s see how Wikipedia defines the terms.

“A partnership is a type of business entity in which partners (owners) share with each other the profits or losses of the business.”

“To sponsor something is to support an event, activity, person, or organization financially or through the provision of products or services.”

The partnership definition that Wikipedia gives isn’t completely relevant to this conversation–which is about using the term sponsorship vs. partnership when describing deals between sports/entertainment properties and brands. In most cases, no brand is going to be willing to equally share in the losses of the property’s business–unless it’s a special deal where the brand is actually able to share in the profits, too. I’m not aware of this happening very often.

The sponsor definition is interesting as it emphasizes giving support. In my opinion, this “giving support” aspect has not been emphasized nearly enough in discussions and articles about sponsorship. For example, all we heard about for awhile was that since Wachovia wasn’t doing well, they shouldn’t be wasting money on sponsoring their golf tournament (and they actually removed their name from it, even though it was paid for). Or that Northern Trust shouldn’t have had a party for their best executives at their tournament. People hear that, instead of hearing about how much money from each PGA TOUR event goes to charity or that the money spent on parties/events provides jobs for cooks, caterers and others. But I’m getting off subject here.

My thinking about this sponsorships vs. partnerships issue is that it’s more of a reflection on how each side sees the other and how they approach relationships. My feeling is that it starts with properties. Do you want a sponsor (someone who supports you via money or services) or do you want (can you get?) a partner (someone who has a greater stake in your success)? While some smaller properties may be happy just finding sponsors, some of the most prestigious properties can be more selective and seek partners who have very strong brands and who must commit more than just money to the relationship.

What do the big leagues/events call these relationships?

Let’s check out some websites to see what wording some of the major pro leagues and premier sports events use when publicly describing their relationships with brands.

• AVP – sponsors (listed on bottom of home page)
• MLB – sponsors (here’s the link)
• NBA – not clear from their website
• NFL – not clear from their website
• PGA TOUR – title sponsors for tournaments and huge list of marketing partners
• USGA – partners (logos listed on bottom right of their home page and here)
• The Masters – no official wording but relationships with IBM, AT&T and Exxon Mobile
• US Open (Tennis) – sponsors (list is here)
• Breeders’ Cup – partners (list is here)

The funny thing is, for some of these properties (and many teams as well), it’s hard to even tell who their sponsors are by looking at their websites! Or they hide them and make you really look around. That would not make me happy I was a sponsor/partner-no matter what the relationship is called. It definitely didn’t make me happy when I used to spend a lot of time researching that stuff.

As consumers’ attention becomes even harder to get (because we have more choices now than ever), my feeling is that the term “partnerships” will be used more often. Properties who used to sell out every event and may have been content just getting money are now in the same boat as brands–they need eyeballs and attention, too. Now both sides are asking each other for access to market to their customers, and the best relationships will be those where both sides help each other. Sponsorships certainly aren’t dying–I just think the word “partnerships” may be more beneficial in describing these relationships and ensuring that both sides are getting what they want and working to help each other succeed.

But maybe I’m completely wrong. Maybe the words should be used interchangeably and there isn’t really much difference between them. Maybe good sponsors are essentially partners. What do you think?

1) Advertising supported - This is the main way social networks are trying to generate revenue. It’s good for the users as they get free access in exchange for seeing a few ads. This has the potential to be great for advertisers, too, as they can often target users based on various demographic info and interests. But here’s a dirty secret–click-through rates on social networks (especially Facebook) are horrible. Last I saw the CTR was about .04% …. This actually makes sense, because people go on social networks for specific purposes—they want to check out their friends profiles, pictures, videos, etc. Social network users aren’t in a shopping mindset and so aren’t likely to be looking for information about products or services. But, social networking is still a good option for increasing brand awareness as Disney found out with its MySpace page for “Step Up” and “Step Up 2 the Streets.”

It doesn’t look like ad spending on social networks will be decreasing any time soon. eMarketer says that about $2.1 billion will be spent on social networking advertising this year, with the number rising to $4.1 billion in 2011.

2) Subscription Model – This involves charging users a fee to use a site. Dating sites have been very successful with this model, but outside of this space, I’m not sure who’s operating this way. People are so used to getting things for free, that its hard to convince them to pay for social networking. There would seem to be an opportunity to offer free services and upsell people on something that includes exclusive content, access, etc…In a way, some of the college sports recruiting/news websites operate this way–gives some basic content for free and charge for premium content and message board access.

Something to think about is whether there will ever be other niche or local social networks that people will pay to be a part of…sort of like online country clubs, where membership is seen as a privilege and a status symbol. What do you think?

3) Data mining - This model involves collecting data about a group of people and selling it to an advertiser. So say Nike wants to learn more about what kind of music and movies guys 16-19 like, they would be able to purchase data from a social network that tells them what they need to know. I’m not sure if any sites are currently doing this, but it may be something to think about. Do you know any sites doing this?

4) Sponsorship – Instead of just having advertisers, it would seem to make more sense to have sponsors who are invested in helping the site grow and adding value. Sponsorship could be something as simple as giving Brand X complete ownership of a contest or section of the site, or a sponsor could take things further and partner with the site to bring users something unique and valuable.

5) Affiliate Marketing – Affiliate marketing is basically selling an outside party’s goods/services and getting a commission or fee for each sale that is made. In my opinion, this is an under-utilized method of monetization. Instead of putting up some Google ads that no one clicks on, why not offer a relevant product or service to your users? While we’ve seen that most people aren’t in a shopping mode when they’re social networking, it never hurts to test offers, especially on niche sites.
It would be pretty easy to add a “store” to the site and feature relevant products. A couple sites are currently utilizing this method:

• Go211- They are using their status as an Amazon Associate to sell products and get a commission off of each product sold in their “store.”
• SkiSpace – It looks like Bode Miller’s site has a partnership with Backcountry.com to sell items in the “gear” section of their website

That’s all I’ve got for now. I’d love to hear your thoughts on this stuff.

Have a great weekend. Hopefully the Heels can pull out the W against Kansas for a shot at the National Championship. Let’s go boys!