Whether you are negotiating, activating or simply trying to talk to a sponsorship sales associate, knowing the terminology of sponsorships will help you navigate whatever situation you are in. Below we created a simple list of some of the most utilized terms in sponsorship discussions and we explained them in a way that is easy for everyone to understand.
Activation – how to promote sponsorship assets. An example can be a 10’x10’ tent where brands are giving out t-shirts in exchange for lead information from visitors.
Asset – any good or service sold to the sponsor as part of the sponsorship deal. Types of assets can include digital (social/website), signage, tickets/parking, and activation space, among others.
Category – classification of a potential sponsor usually based on common products or services. Common categories include: carbonated beverages, wellness products, consumer electronics, QSR (quick service restaurants) and much more.
Entitlement – a level of sponsorship one may purchase. Entitlements can include being the title, presenting, or official sponsor. Normally title and presenting sponsors are integrated into an event logo and name, while official partners hold exclusivity within their categories.
Exclusivity – the right of the sponsors to be the only sponsor within their designated category. It is a negotiated right within an agreement and normally costs more to gain exclusive rights.
First Right of Refusal – a common practice to allow the current partner first opportunity to renew their agreement prior to the offer being presented to another party. Normally this right is granted in 30 day increments.
Hospitality – opportunities to host clients, customers, or employees within the sponsorship. Hospitality assets can range from luxury suites to general tickets and parking passes.
In-Kind/Trade – the act of offering a product or service in lieu of cash sponsorships. For example, $20,000 of water and soda is provided to an event in exchange for assets instead of $20,000 in cash.
IP Rights (Intellectual Property Rights) – the sponsors right to utilize the logo and trademarks of the property during their activation of the sponsorship.
KPI’s (Key Performance Indicators) – metrics that measure how something performed. KPI’s can include attendance, social media, tv ratings, leads generated and more.
Property – the entity or organization that is selling the sponsorship. They control the assets.
Renewal – the process of engaging in negotiation, normally during the last year of the current agreement or after it expires to extend the agreement into the future.
ROI (Return on Investment) – the expected outcome a sponsor is hoping to receive from their sponsorship investment. For example, a bank may want to increase their consumer accounts in a certain region based on a sponsorship.
Sample Rights – the right to sample your product to an audience, but not sell.
Sell Rights – the right to sell a product directly to consumers, but not sample.
Specs (Specifications) – the requirements needed by the property in order to activate sponsorship assets. Specs can range from sizes of video board files and standard signage to the layout breakdown of an activation space.
Target Market – the potential customers or consumers that sponsors hope to reach with the sponsorship deal.