SAP has announced a sponsorship deal with SA`s number one sportsman, golfer Ernie Els. SAP will not disclose the amount, but you can be sure it is an obscene sum of money.
In return, the British Open champion, ranked third in the world, will wear the SAP logo on his headgear as well as golf apparel.
The question that everyone asks is why does a company pump so much money into sponsorships? Why not push that money back into the company - all IT companies could do with a cash injection these days.
Of course, we know that marketing is everything. But why are sponsorships, especially for top sport stars, generating such high sums?
SAP is the world`s third-largest software company and its involvement in sport sponsorships is extensive. In golf its activities include being co-title sponsor of the Deutsche Bank/SAP German Open and it is the official sponsor of golf legend Gary Player.
SAP chief Hasso Plattner of Germany has a passion for golf, and bought and redeveloped the Fancourt resort near George in the Cape, which now boasts four golf courses including the new Links course, which will host the President`s Cup next year, a team event between the US and the rest of the world, excluding Europeans.
This factor probably had a major role to play in securing Els`s sponsorship - Els has a home near Fancourt and every year the Ernie Els Invitational charity drive takes place at Fancourt. This year it is from 17 to 19 December.
Plattner also has a passion for yachting and his company is a main sponsor of Team New Zealand, the titleholder of the America`s Cup. Formula One motor racing also attracts SAP money via the West McLaren Mercedes Formula One team.
Another prominent IT company with extensive golf sponsorship is Dimension Data. It sponsors Zimbabwean Nick Price and Irishman Darren Clarke.
Is the publicity really worth the massive amounts of money that they pump into the sponsorship deals?
Rodney Weidemann, journalist, ITWeb
For a large company like SAP or DiData, the publicity to be gained from having logos and advertising visible at high profile events, such as the Million Dollar Challenge or virtually any grand prix, has to be worth a substantial investment.
However, is the publicity really worth the massive amounts of money that they pump into the sponsorship deals?
After all, it is a lot of money. Motor racing sponsorship in particular costs obscene amounts, even for a tiny logo on, say, the left sleeve of the driver`s uniform.
So where are the companies making their money out of such deals? It can only be in the tax breaks and incentives that are given by the government for sponsorships of this nature.
Sure, everyone wants to see the top sportsmen and women performing, and we all know that it takes plenty of cash to make events like the Million Dollar Challenge happen (it takes a lot more than a million, too), but business is still business.
No organisation cares that much for the welfare of a sporting code or particular sports person that it is going to drain its profits away by sinking money into anything that will not be beneficial to it - it is just not good business.
This is why sports sponsorships are, to coin a corporate term, win-win situations for the companies that use them well.
They get their logos and advertisements right out in the public eye (often on a worldwide basis, thanks to television coverage), they get fantastic tax breaks and other incentives, and they are seen almost as the saviours of those sports we all love to watch on a Saturday afternoon.
It can be a double-edged sword on occasion, as I know people who have refused to ever buy Sharp products, purely on the basis of the company`s long-term association with Manchester United.
But this type of boycott is down to the individual alone, and cannot negatively impact the company`s bottom line in the way that a well thought-out and well-placed sponsorship can positively affect it.
One thing is certain - there is a lot more to sports sponsorships than simply a corporate logo on a hat or shirt.
Share