How Deal Characteristics Shape Sports Sponsorship Perceptions

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According to Sports industry analyst Matt Powell of the NPD Group, out of 10 best-selling sneakers in 2017, four were Air Jordan models. While they are without a doubt great shoes, it is obvious that their biggest selling point is the Jumpman’s logo plastered on the side.

How Big Is Sports Sponsorship?

Companies worldwide spend around $50 billion on sponsorships annually. Although some of that money ends up supporting music festivals and other types of entertainment, sports sponsorships take the biggest chunk of the cake. Not only it is huge, but sponsorships increase at a faster pace than the entire advertisement industry, with the annual growth of 4%, compared to 3% of the rest of the advertising field. The reason for this is that sports sponsorships are an effective tool in promoting a brand. By associating it with a successful athlete, companies increase the brand’s visibility in a positive light, which in turn has a huge impact on sales.

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How does Sports Sponsorship Works?

Sports fans are usually very committed to their chosen sport of an athlete. The decision to buy a piece of apparel or new shoes stems from two directions. The more obvious one is the desire to look and dress like their hero or identify with their club by wearing their uniform. The other reason is that they genuinely want to help their idols, and one way to do that is to buy whatever they are advertising. They understand that more stuff with their favorite athlete’s signature is sold, the more money they will earn and they are eager to help in any way they can. It doesn’t matter if they support a football club, a basketball star, or a NASCAR team, the fans are always loyal and often fanatical about their passion, which is how the word fan was created in the first place. It didn’t take long for companies to discover that this passion can be tapped in and that it can a huge impact on their profit margins.

Successful Partnerships

Danica Patrick, the most successful woman racing driver, has signed a deal with GoDaddy that lasted over a decade. Both parties benefited from it, which is a hallmark of a good deal. Danica got the money she needed to race and GoDaddy got to associate their brand with one of the most successful drivers and media sensations in the NASCAR. Another example of a successful sports partnership is cooperation between betting giant Bet365 Casino and Spanish La Liga, one of the most watched football competitions in the world. In return for a massive amount of money, they have received a massive exposure by displaying their logo on the uniforms of ten clubs, watched by millions every week. And of course, you can’t talk about sports sponsorships without mentioning Air Jordan, perhaps the most successful partnership between a brand and an athlete.

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Not So Successful Partnership

It isn’t all milk and honey, of course. There are countless examples of bad sports sponsorships. Perhaps the most glaring example is Lance Armstrong. In 24 hours after it became public that he was using illegal substances, eight of his sponsors dropped him like a proverbial hot potato. Nike, which was his biggest sponsor, issued a statement claiming that Armstrong has “misled Nike for more than a decade.” It just goes to show how quick and merciless companies are to react to any perceived threat to their brand. There are also downright absurd deals, like McDonald’s being the official restaurant of the Olympic Games, although, with the amount of money Micky D’s has available, it is easy to see why the Olympic Committee agreed to this sponsorship.

The effect of sports sponsorship on customers boils down to simple psychology. Kids want new Harden shoes because they think it will help them improve that step-back three and because they want to look cool. Adults want to be associated with Harden, and, of course, look cool. The mechanism is a simple one and is almost guaranteed to work, and that is why many brands are shelling out big bucks to attract athletes and sign them on.

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