Endorsement vs sponsorship, what’s the difference and which is right for you?

Endorsement vs sponsorship: what’s the difference? On the surface, “endorsement” and “sponsorship” are very similar terms. They’re both tools brands use to increase brand awareness and boost a company’s reputation. 

Both sponsorships and endorsements are a form of partnership marketing designed to align a business with a specific entity, individual, or organization. 

In a world where customers often judge organizations based on their connections to existing entities, sponsorship, and endorsement can be extremely lucrative. 

If companies can effectively link themselves to well-known, established entities in their chosen field, they’re more likely to build “affinity” with their target audience. 

Endorsements and sponsorships can also help organizations to reach new customers and prospects they may have been unable to access alone. So, how exactly do endorsement and sponsorship differ?

Endorsement vs sponsorship: What is endorsement?

To understand the difference between endorsement vs sponsorship, we first need to take a closer look at each individual term. Endorsements are a type of sponsorship focused on a relationship between a brand and a particular figure. 

While companies generally sponsor entire teams and events, they can also pay a single person to advocate for their brand. 

With endorsements, companies carefully choose an individual figure in their industry or a person connected to their ideal target audience to act as a brand advocate. Think of how Taylor Swift advocates for diet coke. 

The drink appears in her music videos, and she has also appeared in various advertisements and promotions connected to the company. 

Similarly, Beyonce has previously endorsed the Pepsi product. There are various ways individual influencers can “endorse” a company. Sometimes they show themselves using a product or service, post about it on social media, or simply agree to be the “face of the business” in advertising. 

Some companies seek out endorsements from multiple professionals in a field. For example, the Nike brand has various celebrity athletes committed to “endorsing” the company. They often wear Nike logos in their uniforms and send their followers positive messages about the brand.

What is an example of endorsement?

There are countless examples of endorsement all over the world. Charlize Theron, the famous actress and Academy Award Winner, signed an 11-year contract to endorse Dior’s J’Adore perfume for a massive payment of $55 million.

Subway restaurants are often associated with Michael Phelps, who the brand portrays as one of the company’s “Famous fans.”

Another example is David Beckham, who Adidas sponsored for $160 million. Not only does David appear in various advertisements for the brand, but he also wears Adidas clothing regularly throughout globally-publicized football games.

Sponsorship vs endorsement: What is sponsorship?

So, what is sponsorship? In a lot of ways, sponsorship is very similar to endorsement. In an endorsement, companies generally provide individuals with financial funding, resources, and other forms of support in exchange for promotion and advocacy.

However, in sponsorship, the partnership is a little broader. Rather than focusing on one influential figure, a company “sponsors” an entire team, event, or charitable organization.

Usually, in exchange for financial or in-kind support, the beneficiary in a sponsorship deal will promote the brand in various ways.

They might include signage at an event highlighting the company or place the brand’s logo on a team’s uniform. Countless sports teams around the world have sponsorship deals with leading brands. Even major industry events have their own sponsors.

Heineken, for example, sponsors the UEFA champions league, which allows the company to advertise throughout the UEFA events and attract millions of new fans worldwide.

What is an example of sponsorship?

Just like with endorsements, there are countless examples of sponsorship throughout the world today. For instance, Just Eat, a leading company in the food delivery landscape, sponsored the X-Factor as part of a multi-year television deal.

The sponsorship allowed the company to place its advertisements at the beginning and end of advertisement slots for the television show.

In the sporting world, Coca-Cola is best known for sponsoring the Olympic games. The company has provided millions in funding to the Olympics for decades, starting in 1928.

In 2016, the organization created a year-long promotional campaign based on the #ThatsGold hashtag. According to some reports, this sponsorship earned Coca-Cola about 30 million video views for its worldwide advertisements.

What’s the difference between endorsement and sponsorship?

Sponsorships and endorsements are very similar products for brand promotion. They both allow companies to connect themselves to an entity in exchange for brand reach, advocacy, and higher levels of brand awareness.

However, there’s a slight difference in the scope for sponsorships and endorsements.

When a company sponsors an event, team, or something else entirely, they generally take a holistic approach. Companies can sponsor an individual and ask them to place their logo on their uniforms, but they only get a basic promotional deal in exchange.

While sponsored companies will help to showcase a brand, they don’t always advocate for the company.

Alternatively, in an endorsement deal, the relationship is usually between a specific individual and a company. The individual not only wears the company’s logo in some cases but also acts as the face of the brand, regularly taking part in advertising campaigns.

This makes the relationship a lot more intimate between a company and the “endorser.”

For instance, PUMA and AC Milan announced a long-term partnership in 2018. Like many sports sponsorship deals, the partnership involves having PUMA’s products and branding placed throughout the group’s uniform and professional image.

Alternatively, Cristiano Ronaldo’s endorsement deal with Nike is a little different.

With the endorsement deal, Nike has established a direct relationship with a player. Ronaldo advocates for the company, appears in advertisements, and acts as an overall “ambassador.”

Essentially, endorsing an individual is like adding another influencer to your marketing team, committed to driving attention to your brand. 

What are the benefits of sponsorships and endorsements?

Although sponsorships and endorsements have some slight differences, they are both extremely beneficial to companies. Both of these tools can help to improve brand reputation and awareness, extend brand reach, and generate new opportunities for sales.

However, an endorsement deal is more of a long-term relationship with an individual, which involves transforming an influencer into an ambassador for the company. A sponsorship can be a long or short-term partnership, depending on the company’s needs.

While sponsorships and endorsements both provide companies with new opportunities to reach their fans and drive conversions, endorsements are a little more advanced.

They can transform a company’s entire advertising strategy and give them a unique way to reach its target audience consistently with a recognizable face or voice.

However, endorsement deals are typically a lot more expensive than a standard sponsorship. Companies of all shapes and sizes can access many sponsorships. At the same time, endorsements tend to be limited to larger companies with huge budgets.

Some of the most famous celebrity endorsements have cost businesses millions.

Should you choose sponsorships or endorsements?

When choosing between endorsement vs sponsorship for your brand, there are a few different factors to consider.

If you’re trying to decide whether sponsorship or endorsement is right for you, it’s worth considering what kind of relationship you want to build with another partner entity.

Are you looking for a quick way to highlight your brand at an event, or do you want someone to advocate for your company consistently and contribute to your marketing campaigns?

Are you looking for a new “face” for your organization or someone you can use to heighten your brand equity or reputation? Or is your focus mainly on gaining brand awareness?

Fabrik: A branding agency for our times.

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