Brand Investment
Sponsorship Is Not Marketing Spend
Most sponsorship is bought as visibility and written off as marketing. Structured properly, it should return business.
By Sultan Hakeem ·
Sponsorship usually gets approved the same way. Someone senior likes the property, the logo goes on the thing, and the cost lands in the marketing budget where nobody asks it to return anything specific. A year later the renewal is discussed on the basis of whether people enjoyed it.
I have come to think that is the wrong category entirely. Sponsorship is not marketing spend. It is a commercial negotiation that happens to involve a logo.
Two things to negotiate for beyond exposure
The first is value in kind. Most rights holders have inventory that costs them very little and is worth a great deal to you. Hospitality, access, space, data, introductions. If you only negotiate for branding you leave that on the table, and branding is the least valuable thing they have.
The second, and the one almost nobody asks for, is the business itself. A major event has to move things. Freight, equipment, vehicles, hospitality supply. Somebody is being paid to do that. If your company does that for a living, the sponsorship conversation and the commercial conversation should be the same conversation.
What that looks like in practice
We negotiated the naming rights to the GT race in Jeddah so the event carried our name, and took the principal logistics sponsorship alongside it. The structure returned value in kind and, more importantly, new logistics business. The brand exposure was real, but it was not the return.
The same applied at the Dakar Rally. Sponsorship, a booth, a value in kind package, and underneath it commercial work moving competitor equipment and freight into the Kingdom from across the world. The rally needs those things moved. We move things. The sponsorship was the door, not the outcome.
Activation still has to work
None of this replaces doing the thing well. For the GT race we put a car in a glass box in the city a week before, scannable for ticket registration, so the event existed in people's week before it existed on their calendar. Good activation is not decoration, it is what makes the property worth what you paid.
The question to ask before signing
Not what will we get seen by, but what will we get. If the honest answer is exposure alone, the property may still be worth having, but price it as media and judge it as media. If the answer includes business you would otherwise have bid for, you are not buying sponsorship. You are buying a commercial channel with a logo attached, and it should be evaluated by whoever owns revenue rather than by whoever owns brand.
Sultan Hakeem is Director of Events and Protocol at SAL Saudi Logistics Services in Riyadh. Get in touch.