The Sponsorship business model

LA Lakers digital sponsorship in action: The Hublot watch in the top right is a sponsor, Verizon is a banner ad
LA Lakers digital sponsorship in action: The Hublot watch in the top right is a sponsor and Verizon is a banner ad

This post is the third of a multi-part article on methods to monetise large digital audiences. The sponsorship model can be used for any size audience, and varying levels of content quality – it all depends on the organisations the website is attracting as sponsors.

Sponsorship is essentially a fixed promotion. Whether it’s putting a logo on a section of a website or a Formula 1 mirror, it’s a longer term arrangement than an advert.

Sponsorships are often sold on the audience size – whether it’s Opportunities To See (OTS) or eyeballs, or in the digital world: Unique Visitors. This is different to advertising models of CPC (Cost Per Click) or CPM (Cost Per Thousand) impressions or displays.

Advertising is becoming more targeted towards demographic or geographical groups, or even highly targeted towards individual users (such as Facebook ads), sponsorship is still about un-targeted, mass broadcasting – getting noticed by as many people as possible.

Sponsorships are usually sold exclusively to a particular asset. This asset might be a section of a website or a football top. It’s rare to see sponsors rotated on that asset.

Whilst sponsorships can be lucrative, often without the need for complex technologies, it can bring complications. Sponsorships may require industry exclusivity, even across advertising sales. So an automotive sponsor may stipulate that no other (competitive) automotive adverts can be sold on the same asset.

Click here to see the other types of monetisation.

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