Thanks to increases in leisure time and discretionary spending nowadays, community groups as well as individuals are becoming enthusiastic in events according to their interests. Events have occupy our newspapers and television screens as well as much of our free time and enrich our lives (Bowdin et al., 2011). Moreover, events have a substantial contribution to the national economy. In UK, the event industry generates over £36 billion every year, which sustain at least 530,000 full-time jobs (Bladen et al., 2012). Under the trend, the business sector has take events and events’ sponsorship into consideration when making their marketing strategies. Globally, expenditure on event sponsorship has been escalating each year - from USD 44 billion in 2009 to an estimated USD 51.1 billion in 2012 (IEG, 2013). The overall sponsorship spending in the UK each year is around £ 934 million, made up of sports (51%), arts and business (18%), broadcasting (20%) and others (10%) (Mermiri and South, 2009). Before analyzing the relationship between sponsorship and event, the two concepts should be clarified first. An event can be defined as “an organized occasion such as meeting, convention, exhibition, special event, gala dinner, etc. an event is often composed of several different related functions” (Getz, 2005, p. 16). According to International Events Group (IEG, 1995), sponsorship is “a cash and/or in-kind fee paid to a property in return for access to the exploitable commercial potential associated with the property”. In this essay, the scope of the event industry and main types of sponsorship will be introduced at first. Then, the importance of corporate sponsorship in the event industry will be examined by considering the benefits to both sponsors and events. Next, the essay will critically analyze the risks of corporate sponsorship and discuss other sources of event funding. Finally, the conclusion can be drawn as corporate sponsorship plays a significant role in the event industry but potential risks such as ambush marketing should not be ignored. In addition, other sources of funding are essential to successes of events.
The event industry has a large scope; here, only some key components will be presented. Event organisations, staging or hosting events, are core element of the event industry. Besides, professional groups or individuals who organize events on behalf of their clients are called event management companies are emerging with the event industry. There are also various suppliers covering staging, lighting , transport, accommodation and security of the event industry. External regulatory bodies and publications have tight relations with the event industry as well (Bowdin et al., 2011). As for types of sponsorship, cash is the most common source provided by sponsors to support the event (Wagen & Carlos, 2006). Sponsors can also offer ‘value in kind’ by providing free goods and services to events (Wagen, 2007). Other sponsorship may cover the media coverage, IT support, entertainment speaker sessions and etc.
From the sponsor’s perspective, sponsors have objectives that fit into one or more of these areas: to increase product or brand awareness, to develop corporate image, to drive sales, or to develop market strategy (Yeoman et al., 2004).
To begin with, sponsors can gain benefits from marketing area through sponsoring the event industry. Sponsorship is acting as a more effective way of market promoting, sales driving and reaching the target market (Bowdin et al., 2011). Among various traditional marketing promotion methods such as advertising or personal selling, sponsorship is argued to be one of the most effective means of communicate and form relationships with consumers and business partners (Grey and Skildum-Reid, 2003). Siegel (2001) investigated the sponsorship of tobacco industry and found that despite a federal ban on tobacco advertising on television, tobacco companies achieve the equivalent of...