Motorsports Marketing and Sponsorship Activation Blog

7 Common Mistakes With Sponsorship Programs

6/14/22 10:16 AM

As sponsorship continues to evolve and assume a more complex status for marketing teams, companies need to deploy focused strategies to make the most out of their investments. Unfortunately, many brands struggle to identify an appropriate sponsorship program that would generate significant value, or they fail to develop ideas to utilize their sponsorship properties effectively. If you are set to get involved in sponsorship, there are some common strategy gaps to identify that might reduce the impact of your program.

Look at the following 7 mistakes many brands make with their sponsorship programs. If you are experiencing one of them, it’s time to review your plans and inject a fresh approach to your strategy.

1. Not understanding core objectives

Have you determined what your business goals are and why have you opted for a sponsorship program in the first place? Sponsorship is a great platform to leverage when you have a clear purpose for being there. What is it that you would like to accomplish? Do you want to promote awareness? If so, who is your target audience and what difference would you want to make? What metrics should define your growth and the success of your sponsorship program?

If you don’t have answers to these questions in the beginning, chances are your marketing team will have a difficult time demonstrating ROI.

2. Over-investing in properties

Are you clear about how much you can spend on acquiring sponsorship assets? Lack of clarity about budget allocation in this area may prevent you from leveraging the potential of your sponsorship program to an optimal level. When you end up investing your entire budget in buying assets, you will lack the funding to support the sponsorship activation programs that are the real vehicles to enhancing ROI.


3. Not focusing on sponsorship activation

The most glamorous part of the process (acquiring property rights) does not immediately impact your ROI, but activating those assets will. If you have not kept a budget aside to support activation programs and if you do not have a concrete strategy defining how you should use the assets, then the investment is hard to justify after 2-3 years. With years of experience in the industry, we recommend that you make a targeted start and then move your way up strategically and organically. In other words, we advise you to allocate a separate budget for activation programs and start with minimum investment in acquiring property rights.

We suggest that you spend $2 on activation for every $1 you spend on property rights. This formula indicates that you spend the majority of your budget to support activation programs, which are the drivers of ROI. You can then re-organize your budget and modify your existing sponsorship asset mix to grow where you see results.

4. Not being able to identify the right program mix for your objectives

It is tempting to invest your entire budget in a single sponsorship property. This may be due to two reasons - either you do not know that a diverse portfolio of assets can assure you better ROI or you aren't sure where to start in building an effective program mix. You will often find teams or sanctioning bodies approaching you for a single (and large) property deal that is shaped for convenience rather than effectiveness.

While investing your entire budget in a single property may seem to be a simple proposition, this setup can be challenging to work with. By having different types of assets in your investment portfolio and by using them creatively through various sponsorship activation programs, you can more easily maximize the benefits of your involvement. You want to build a holistic mix of the most useful assets and should support your objectives from point #1.

5. Not consulting expertise to make a sponsorship program deliver results

It is essential to understand if a particular set of assets will help you in achieving your objectives. The groups selling you on sponsorships often do not have an in-depth idea about what you actually need and will instead focus on selling you everything convenient for them. Also, note that it is not the priority of the seller to guide you on what you should do with your assets to activate your program.

Things become even more difficult if you are new to the industry and lack adequate knowledge to determine if a deal is good or bad for your objectives. Without an agency to help you identify the most effective properties and activation strategies, you may be stuck in a less-than-favorable position to maximize your investment.


6. Thinking that logo placements and branding are enough to generate ROI

While logo placements do bring some visibility and are nice to have, we want to get you to a point where that branding is the "cherry on top" of what is otherwise an ROI-rich campaign. Experiential marketing is a more effective way to engage your target audience and is one of the largest benefits of investing in sponsorships.

Providing experiences, even virtual ones, can promote sales growth to a considerable extent, and according to stats provided by market research firm Smart Insights, 98 percent of users feel more interested in purchasing a product after a successful brand activation.

7. Not understanding that results take time on this platform

Even the best sports business programs have a hard time providing results overnight. It is a continuous process that produces benefits over time, usually compounding on each other. Maintaining a level of consistency can make a massive impact on how fans and potential customers perceive your brand in a sport where sponsors are viewed more as "supporters" rather than "advertisers." Because this real, human connection for your brand takes time to build there is a chance you will not see results immediately. Something you do at the race this weekend could ultimately make an impact next year. This is also the reason we often refer to these partnerships as investments for your brand.

It can be difficult to understand the value of each asset that comes with a given sponsorship deal but we hope these 7 common mistakes help catch the most significant challenges early. We recommend reviewing your program regularly and maintaining a clear understanding of what you want out of it - even if those objectives change from year to year.

Learn more about how to generate maximum ROI from your sponsorship.

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Updated for added value.

Topics: Sponsorship ROI

Team SD

Written by Team SD

Leveraging a wide range of experience in sports marketing and sponsorship activation, our team is always looking to add value. We love collaborating with each other and we write together with you in mind.