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The Bottom Line Expert Opinion: Sponsorship

Updated Friday 16th October 2015

Dr Peter Bloom takes a look at the potential risks and benefits of a company going public.

Nascar stock car, driven by Bill Elliott Creative commons image Icon Darryl Moran under CC-BY-SA licence under Creative-Commons license Sponsorship is one of the most important parts of modern businesses. From athletes to celebrities, public exhibitions to social justice project – it seems that businesses are increasingly relying on sponsorship to sell their brand. This weeks episode of the Bottom Line discusses the opportunities and dangers involved with this burgeoning global sponsorship market. Given its growing importance, sponsorship can do more than just profit companies but also help to influence positive social change.

A primary reason businesses engage in sponsorship is to increase the value of their brand by associating it with something that already has mass social value. Being linked to what is popular or respected raises the profile and esteem of a company and its products. However, there are also public dangers to this strategy. Often a less than reputable product can improve its public perception through sponsorship. This is perhaps especially the case in which less than healthy or downright unhealthy items are made to appear to “good for us” by their association with a top athlete or sports league. This reflects a broader problem of how sponsorship can lend products undue public credibility. Bob Stewart talks about this issue in his article “Sport sponsorship lends halo to supplements and sports drinks”.

This points to the wider, and potentially troubling, social effecs involved with sponsorship. Corporations and entire industries employ sponsorship to expand their market, commonly in ways that go substantially beyond traditional advertising techniques. They seek to fund events and public services in order to promote their products – even if only indirectly. This allows them to reach consumers, like children, that they otherwise would not be able to reach. Moreover, it raises serious questions of how “objective” public institutions can be when receiving private funding. This is perhaps particularly problematic in an age of looming austerity and decreasing public services. Paul Harrison addresses these concerns in his article “Why schools and corporate brand shouldn’t mix”.

Socially, there also growing challenges to the use of sponsorship within government. A crucial part of the legitimacy of any government, at least theoretically, is its commitment to treating all citizens equally. Laws should not be applied differently to individuals and groups based on class, race or gender. Key, in this regard, is preventing private actors from unduly influencing the government and its institutions to their own advantage. Corruption in the form of “kickbacks”, are therefore illegal and heavily regulated. However, many fear that through sponsorship corporations may be legally violating this principle of government neutrality. In an age of growing inequality and budget cuts, a rising number of public service – notably those connected to policing and health provision – are accepting corporate funding, in ways that are not always completely transparent to the public. Terry Goldsworthy explores this practice in his article “Australian police should tread a thin blue line on corporate sponsorship”.

The wider and possibly negative implications of sponsorship is also apparent, though more subtley, in its ability to stoke existing social divisions. Sponsorship is meant to maximize a company or product’s sales. However, ironically, this is best achieved not through appealling to the widest audience as possible but rather enhancing the passion and loyalty of an existing demographic. This means in practice marketing to reflect prevailing, potentially divisive, social identities. It also can entail reinforcing existent and harmful stereotypes. Rather than bringing people together, sponsorship can serve to further divide populations. This is even the case in events aimed obstensibly to create global unity – such as the world cup and Olympics. Mark Doldge investigates this phenemomen in his article “A festival of nationalism: the World Cup allows sponsors to divide and conquer”.

Nevertheless, sponsorship can also be a quite exciting positive force for social change. In particular, the innovative use of sponsorship can help to resolve and bring substantive attention to seriously social, political and economic issues. Concerts such as Live Aid or the creation of Product Red help to bring funds and public exposure to problems of African famine and HIV/AIDS, respectively. It also reverses the established sponsorship relation – where now it is celebrities who are using their “brand” to further social justice. Yet these activities have been criticized for bringing more publicity to the sponsoring celebrity than the problem they are aiming to address. Further, it can justify the lack of action by national and interntaional governments as well as mask the deeper structural factors ultimately responsible for causing such crises. Yet, moving away from celebrities, community based sponsorship programs can be a key means for achieving socially just outcomes. Helen Ware explores the potential of responsible sponsorship for helping refugees in her article “Asylum Sponsorship: we need a sponsorship register for refugees”.

This article was written to accompany the Autumn 2015 series of The Bottom Line. For more information on the series, visit the series page.

 

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