40: Licenses – Liquor, Trade, Contracts & Registrations

 

B A (JMC) (3-YDC), SEMESTER SYSTEM

SEMESTER –IV

SEC III: PUBLIC RELATIONS AND EVENT MANAGEMENT

Unit -2: EVENT MANAGEMENT

Lesson 40: Licenses – Liquor, Trade, Contracts & Registrations

Objectives:

1. Understand what is a Licence.
2. Know about Contracts.
3. Understand the importance of Registration.
4. Learn about the licences to be obtained by Event Organisers.
5. Understand the risk of non-compliance.

Introduction:

A license or licence is an official permission or permit to do, to use or own something. A license is granted by an authority or a party to another party as an element of an agreement between those parties. In case a license is to be issued by the Government it is obtained by applying for it. Licenses can be written or spoken or implied. 

On the other hand, approval is the act of giving permission or providing acceptance for something to move forward or be completed. An approval process is used for a variety of reasons, such as buying goods or services, starting a new project or releasing a new product. Most businesses have approval processes in place to comply with regulatory standards.

Contract is a legally binding agreement between two parties that creates obligations for both parties. Contracts can be written or verbal, but written contracts are easier to reference and enforce. The Indian Contract Act of 1872 is the primary law that governs contracts in the country. Registration is the process of recording legal documents to ensure their authenticity and transparency. It helps protect against fraud and forgery. The Registration Act of 1908 in India outlines the rules and regulations for registering several legal documents including contracts.  

To organise events certain licences, approvals and clearances are necessary. It may also be required to enter into contracts and do some registrations wherever necessary. In the previous lesson we discussed about Laws associated with event management, permits and NOCs to be obtained from different authorities and agencies. In this lesson, let us discuss about the licences to be secured in organising an event like liquor licence, trade licence etc. as also the contracts to be entered into together with registration of documents required to be made with reference to organising the events. 

Licence:

A license is an official permission or permit to do, use or own something. It is a document of that permission or permit. License and licentious come from the words in Latin, licentia or licere whose meanings ranged from "unrestrained” to "freedom to act" to "unruly behavior or wantonness" or "to be permitted." Licensing, dates back to the early 1900s. It began with the licensing of children’s book characters in the early 1920s. A license is granted by a party ‘licensor’ to another party ‘licensee’ as an element of an agreement between those parties. The simplest definition is "A license is a promise not to sue", because a license usually either permits the licensed party to engage in an illegal activity, and subject to prosecution. Without the license, the licensed party could be sued, civilly, criminally or both. It means, a license may be issued by authorities, to allow an activity that would otherwise be forbidden. It may require paying a fee or proving a capability or both. The requirement may also serve to keep the authorities informed on a type of activity and to allow them to set conditions and limitations. Licences are granted by the licensor to the licensees to be valid for a particular length of time say, hours or days or months or years. The licence will also stipulate what territory the rights pertain to. It means the licence with a territory stipulated is limited to one particular area. 

Contract:

Contracts and contractual relationships are not a recent invention, but a fundamental aspect of human society for thousands of years. The history of contracts encompasses a wide range of cultures, periods and types of agreements. Contracts were also first utilized in ancient civilizations such as Mesopotamia, Egypt, and India, serving the same purpose as they do today, like formalizing and enforcing agreements between parties. In ancient Mesopotamia, contracts were employed for various purposes, such as the sale of goods, rental of property, and employment of workers. Contracts are responsible for maintaining order in all aspects of society, including private, public, and political life regulating things and ensuring stability. Contracts were basically barter agreements where one party traded goods or services for something of equal value from another party. However, as societies evolved and economic systems became more intricate, the demand for more elaborate and enforceable contracts increased. As the nature of business relationships evolved, new forms of contracts, including partnerships, joint ventures, and trusts, emerged to reflect these changes. When the industrial economy evolved and business relationships became more complex, new forms of contracts have come up to meet the changing needs of society.  The utilisation of digital contracts has seen a significant increase over the past two decades. The recent COVID-19 pandemic has helped the adoption of technology in the workplace, driving the popularity of digital contracts even higher due to their benefits and efficiency.

For a contract to take place four key elements are necessary. They are (1) Offer: It means one party shall make an offer (2) Acceptance: The other party shall accept the offer (3) Consideration: It means something of value is promised in exchange for the actions defined in the offer. Consideration means either money or a promise to do something, or to refrain from doing something and (4) Intention: which means both the parties will have to intend to create a legal relationship. Contracts serve several key purposes like (1) Defining the terms of agreement (2) Establishing expectations and obligations (3) Providing a basis for enforcement (4) Protecting rights and interests of both the parties and (5) Promoting commerce. Thus contracts can be used to create many different types of relationships by way of entering into Mortgage agreements, Lease agreements, Online purchases, Sign-up agreements, Insurance, and Promissory notes. Businesses including Event management may require any or all of these contacts as the situation demands, for smoother conduct.  

Registration:

Registration is a fundamental concept for businesses and start-ups across various industries. It holds paramount importance in the legal, financial, and operational aspects of running a business. Registration, in a broad sense, refers to the act of recording or enrolling something or someone in an official list or record. It entails formally documenting essential details about the individual or company or its activities with relevant authorities. This process is a legal requirement that helps in establishing the legitimacy of a business entity. Registration imparts legal recognition to the business entity, distinguishing it from personal and unregistered entities. A registered business often enjoys a higher level of credibility among customers, partners, and investors. Registration is essential for tax purposes. It ensures that the businesses comply with tax regulations and is subject to the appropriate tax structure. Registered businesses can avail the benefits of various government schemes, subsidies, and incentives, which can help them grow and thrive. Registration safeguards business name and prevents others from using a similar name, thereby protecting brand identity.

The registration process can vary depending on the type of business and the location. Generally, the steps involved in Registration are (1) Choosing a business structure either sole proprietorship, partnership, limited liability company or a corporation (2) Registering a unique business name with the appropriate government agency (3) Obtaining various licenses, permits and clearances depending on the business activities and (4) Registering for taxation purposes, including GST or other applicable taxes. As per Law, the documents that are required to be registered are Sale Deeds, Rental Deeds, Adoption Deeds, Agreements for leasing immoveable property for more than one year, Business contracts, Debentures issued by joint stock companies, Partition Deeds, General Power of Attorney or Special Power of Attorney, Instruments related to shares etc.

An event management business shall be registered with the authority concerned and the agreements and contracts that it enters into with the clients and vendors of various services too are to be registered for effecting legality.  

Liquor Licence for Events:

Liquor licence, in other words Excise license is the license which the event organizer needs to procure in order to serve alcohol in a live or recorded music event in India. However, when the event is organized at an ‘alcohol on-licensed premise’, the organizer is not required to procure the license. Apart from obtaining the license, the event organizer is also required to ensure that the event attendees are of legal drinking age (LDA). This age varies from State to State in India. Identity cards are compulsory at the event to verify and confirm their age.

As per Prohibition and Excise laws, it is mandatory to obtain licenses for serving more than 6 bottles of liquor at private parties held at hotels, restaurants and even at residences. For parties held at home where liquor to be served is below six bottles, such permission is not needed. For obtaining a liquor licence, an application should be submitted to the Prohibition & Excise Department or else the organiser would be prosecuted if caught during an inspection. Apart from this, the venue owner will also be booked. Event managers mostly do apply and obtain necessary permission and it will be given after inspecting the premises or venue. For the permit, there will be a fee starting anywhere from Rs 10,000 per day if a social, family and get-together event is held in the cities or their peripheries, and more if it is held in star hotels. If the event pertains to sports, commercial and entertainment category, the charges are much higher depending on the number of tickets.

Event Managers will have to choose one of the two slots in a day i.e. 11 am to 4 pm or 7 pm to 11 pm. The entire procedure of applying and getting the event permits happens either offline or online. Certain documents are needed to be submitted or uploaded and the permission is usually issued within 48 hours.  

Trade License for Event Organisers:

A trade license is a legal document a company must acquire before starting business activities. This document provides legitimacy to a company and grants it to perform various activities for which the license has been issued. It is proof that the company's business activities will not be a hazard to anyone. It also shows that the company will not act in any way that would inconvenience anyone. The business must acquire the company trade license before it commences its operational activities. Ideally, it should be obtained three months before starting a business. The licensing authority issues this document, which is an authorized establishment that permits a business to carry out several activities. The business must pay a specific fee for acquiring this document. The amount varies in different countries. In addition, some local authorities may require the business to pay its fees. The fee amount is pre-determined, or it can be a percentage of the company's annual sales.

This license requires a business to operate during business-like work hours. This document also allows an individual not to be personally liable for their business debts. The license separates an individual's taxes from their business taxes. It allows the company several tax benefits that a personal tax does not receive. Furthermore, this license allows a business to join several professional groups. Without the trade license, the business will be considered illegal. As a result, it may be subjected to heavy penalties. This license is also beneficial before a company begins its marketing activities. The license will be proof of the business's lawfulness. Thus, customers, creditors, and investors are likely to believe in the entity's authenticity.

Event management companies need a trade license to operate and shall also pay taxes such as Goods and Services Tax and Local Body Entertainment Tax etc. 

Intellectual Property Rights:

Event management is required to have concern for the real property as well as intellectual property. Intellectual Property is a property that is the creation of human mind. It is a property created by the intellect of a human being. Every human being has a right over her / his property, to use it or to restrict it from being used by other person. The laws related to Intellectual Property Rights need to be considered in organising the events under these circumstances:

1)      To play music: An event manager needs valid licenses and permissions to play music especially by live performers. In case one does not have a valid license from an authorised organisation to play their music, an event can be sued under IPR laws.

2)      Use of Trademarks and Logos: Under Trademarks act, the registered logos and trademarks cannot be used in any event without prior permissions.

3)      Use of Designs and Art work: The Copyright Designs and Patents Act ensures that patented designs of any type cannot be used by any person other than the copy-righted person.

Any company owning any logo or trademark sign would like to protect its claim and would not like it to be used by others. The protection of trademark ownership is generally covered within legislation, including Trademarks Act, the Copyright Designs and Patent Act. The legislation prevents any other party from the use of logo, motto, slogan, punch line and related words by another party without the owner’s permission. It is quite expected that the event company should be aware of the risks of misrepresenting their event. When an event is promoted with its exaggerated benefits, there is always a threat of legal action taken by unhappy consumers because of advertising for an event which made false claims.  

Licenses, Permits & Clearances:

1.      Music License: It means Phonographic Performance License. The law protects music rights in different ways. This means that businesses and organisations playing recorded music in public whether live or via CDs, radio / TV broadcasts, background music systems or other sources will usually need to obtain PPL. The license allows the event organisers to use other artistes’ music with freedom at the event. Playing music in public without the appropriate licenses in place is copyright infringement and is unfair to the members i.e. performers, record companies, songwriters, composers and music publishers. PPL is required for any song that was not written by the performer, regardless of how much of the song is used. Anyone who wants to play recorded music in public, including businesses and individuals, must get a PPL. This includes events, hotels, restaurants, bars, offices, shopping malls, and more. 

2.      Performing Rights License: This is also called as IPRS License i.e. Indian Performing Rights Society License. This license is required for playing / performing non-recorded music in public. It is a license ‘for the artists, of the artists.’ For instance, in India, when a popular artist performs live, the event will require an IPRS license. Also, the artist needs to be a registered member of IPRS. Unlike the music licence of PPL, this IPRS issues licenses to the music users. It collects royalties for the artists, from the artists on behalf of its registered artist members such as lyricists, composers, publishers and performers of music and distributes the royalty to the music owners / members.

3.      Loudspeaker License: Any event held in any public or private venue needing to use a loudspeaker requires a loudspeaker license. The permission needs to be obtained from the local police authorities. Depending on the nature of the event, the authorities may limit the time of usage, size and number of speakers to be used at the event.

4.      Premise License: A license of the premise allows the event organisers to carry out all the permissible activities at the venue. The activities include late night entertainment between 11 p.m. and 8 a.m., large-scale events allowing an audience of over 500 people, selling alcohol as well as serving food and beverages during specific timings and so on. The license can be obtained from the municipal authority under which the venue falls.

5.      Performance License: This is the license which allows a child, anybody below 18 years of age, to take part in a musical event and make a paid performance. Again, the license can be obtained from the local authority. So, if the event has a performance made by a child and is a paid performance, the event organizers are required to procure performance license from local authority.

6.      Public Works Department License: Event organisers need to get this License when they have a working generator at an event.

7.      FSSAI License: This is Food Safety and Standards Authority India License required to serve food at events. Generally, the food prepared at the events is at a large scale. The event management company needs to keep the food served at the event fresh and hygienic. It is mandatory to get FSSAI License Registration. The FSSAI from time to time lays down guidelines and regulates the hygiene and safety of food products in India. Non-compliance to obtain FSSAI Licence by the event management company will attract penalties. 

8.      Pest control license: This is another license the Event Organiser might need for ensuring and complying with food safety standards. It is mostly needed for outdoor events.

9.      Advertisement license: If the event requires to advertise things through billboards and large posters for promotion and management, this license is needed to be obtained from the Municipal authorities concerned following the regulations meant for it. In this connection it is important to know the regulatory landscape of advertising. Ministry of Information and Broadcasting is the key player. ASCI that is Advertising Standards Council of India, though not a Government Agency, is essential in establishing advertising standards. Any businesses to advertise its products or services in India, will have to follow ASCI advertising standards regulations and also the legal directives from the Ministry. When ASCI failed to compel businesses to comply with its guidelines, the CCPA i.e. Central Consumer Protection Authority that was established under the new Consumer Protection Act 2019 has issued guidelines recently to regulate misleading advertisements by incorporating a provision of a self-declaration by the Advertiser and the Advertising Agency.

10.  Animal Welfare Board license: In case the event involves animals for performances or entertainment, this license is necessary. This will ensure that the event complies with animal welfare regulations to make sure that the animals are treated humanely before, during, and after the event.

11.  Procession license: This is only applicable to weddings and cultural celebrations like Baraat and Rath Yatra like processions. These processions can cause traffic and road accidents. To ensure that road safety regulations are met, this license shall be obtained from the police station concerned.

12.  Security agency license: This one is a bonus license. However, this license is not needed for event management but it is necessary to check whether the private security agency hired for the event has this license.

13.  Event Permit: This ensures that the event is organised safely and doesn’t conflict with other activities.

14.  Building permit: This is required for events with structures like stages or booths that could affect buildings.

15.  Police Permit: This is required if the event promotes a cause or campaign, demonstrates support or opposition to view or action, or to commemorate an event.

16.  Noise Permit: This is one of the most necessary licenses for concert organizers.

17.  Tree-cutting or pruning permits: If the event requires cutting of trees at the venue, or even trimming them, a permission from the Forest Department or Urban Forestry Wing of the Municipality concerned to conduct these activities legally and responsibly.

18.  Helium balloon permits: It is not commonly known but helium is considered a controlled substance. However, it is increasingly used in balloons and decorations. Permission is needed if the event features such helium products.

19.  Drone Permission: In case drones are to be used at the event for camera coverage or entertainment, permission from the local police station is necessary for that the event manager need to provide details about the drone usage by showing other permits obtained for organising the event.

20.  Foreign Artist Permission; Whenever people from another nationality performing any dance or music or magic show at an event, it is required to get a license separately for the reasons of safety and security of sovereignty of India.

21.  ASI clearance: If the event is being held at a monument or heritage site, clearance from the Archaeological Survey of India is a must to ensure that the event doesn’t directly or indirectly harm cultural assets.

There are single window systems for event permissions and licenses in Cities like Delhi, and States like Maharashtra, Telangana etc where two or more permissions can be obtained at one place. If the venue where an event is being held already complies with all necessary legal formalities, then there is no need to obtain additional licenses specifically for the event. It depends on the type of event and local regulations. However, it is crucial to always verify with local authorities to ensure full compliance and avoid potential legal issues.  

Summary:

Organising a successful event requires meticulous planning, coordination and compliance with various legal requirements. Obtaining necessary licences, permits, clearances, entering into contracts and making registrations is crucial to ensure a smooth and lawful execution of the event. The requirements may vary depending on the location, type and size of the event. It is essential to consult local authorities and relevant organisations for specific guidance. Failure to obtain these mandatory things can result in cancellation or postponement of event, financial penalties or fines, reputation damage and legal action. Event organisers must prioritize through research, planning and collaboration to avoid potential consequences of non-compliance.  

Frequently Asked Questions (FAQs):

1. What is meant licence?
2. What are the key elements and the purpose of a contract?
3. What is the process of registration and what documents are required for that?
4. Is it necessary to obtain excise licence by event organiser?
5. List out the licences and permits required for conducting an event. 

Model Answers to FAQs:

1.      A license is a promise not to sue, because a license usually either permits the licensed party to engage in an illegal activity, and subject to prosecution. Without the license, the licensed party could be sued, civilly, criminally, or both. It means, in particular, a license may be issued by authorities, to allow an activity that would otherwise be forbidden. It may require paying a fee or proving a capability or both. The requirement may also serve to keep the authorities informed on a type of activity, and to allow them to set conditions and limitations. Licences are granted by the licensor to the licensees to be valid for a particular length of time say hours or days or months or years.

2.      For a contract to take place the key elements are (1) Offer. It means one party shall make an offer (2) Acceptance. The other party shall accept the offer (3) Consideration: It means something of value is promised in exchange for the actions defined in the offer and (4) Intention. which means both the parties will have to intend to create a legal relationship. The purposes of a contract are (1) Defining the terms of agreement (2) Establishing expectations and obligations (3) Providing a basis for enforcement (4) Protecting rights and interests of both the parties and (5) Promoting commerce. Thus contracts can be used to create many different types of relationships, such as Mortgage agreements, Lease agreements, Online purchases, Sign-up agreements, Insurance, and Promissory notes. 

3.      Registration process can vary depending on the type of business and the location and the steps are (1) Choosing a business structure either sole proprietorship, partnership, LLC or a corporation (2) Registering a business name (3) Obtaining various licenses, permits and clearances and (4) Registering for taxation purposes, including GST and other taxes. The documents that can be registered are Sale Deeds, Rental Deeds, Adoption Deeds, Agreements for leasing immoveable property, Business contracts, Debentures issued by joint stock companies, Partition Deeds, General Power of Attorney or Special Power of Attorney, Instruments related to shares in joint stock companies etc.

4.      Yes. It is necessary. The Liquor licence in other words Excise license is the license which the event organizer needs to procure in order to serve alcohol in a live or recorded music event in India. However, when the event is organized at an ‘alcohol on-licensed premise’, the organizer is not required to procure the license. In excise license, apart from obtaining the license, the event organizer is also required to ensure that the event attendees are of legal drinking age (LDA). Usually, identity cards are compulsory at the event to verify and confirm their age. However, for parties held at home where liquor is served in small quantities i.e., below six bottles, liquor permission is not needed.

5.      The licences are Music licence, Performing Rights licence, Loud speak licence, Premise license, Performance licence, PWD licence, FSSAI licence, Pest control licence, Advertisement licence, Animal welfare board licence, Procession licence, Security agency licence. The permits needed are Event permit, Building permit, Police permit, Noise permit, Tree cutting permit, Helium balloons permit, Drone permission, Foreign artists permission, ASI clearance etc.  

Multiple Choice Questions (MCQs):

1. _____________ outlines the rules and regulations for registering legal documents including contracts.

a.       Indian Forest Act, 1980

b.      Indian Penal Code, 1860

c.       Indian Contracts Act, 1872

d.      Indian Registration Act, 1908

 

2. Liquor licence necessary for serving more than _______ at parties held at hotels, restaurants and at residences.

a.       6 bottles

b.      10 bottles

c.       12 bottles

d.      15 bottles

 

3. _______________ is a legal document a business must acquire before starting activities.

a.       Police clearance

b.      Registration

c.       Trade Licence

d.      Event permission

 

4. __________ property is a property that is the creation of human mind.

a.       Intellectual

b.      Real

c.       Trade Licence

d.      House

 

5. Consumer Protection Act 2019 issued guidelines to regulate misleading _______________

1. Events
2. Advertisements
3. Licences
4. Permissions

 Key to MCQs: 1 (d), 2 (a), 3 (c) 4 (a), 5 (b)

Glossary:

Licence: It is an official permission or authorisation granted by a governing body or authority, allowing an individual or organisation to engage in a specific activity, profession or business.  

Liquor: Liquor also known as spirits, refers to distilled beverages containing ethanol, typically with an alcohol content of 20% or higher 

Trade: Trade refers to the exchange of goods, services or commodities between businesses, organisations or countries.  

Contract: A contract is a legally binding agreement between two or more parties that outlines terms, conditions, and obligations for a specific purpose.  

Registration: It is a process of officially recording or enrolling in a particular activity, organisation or system like business registration, event registration, product registration, software registration etc.  

Trade Mark: Trademark is a unique symbol, word, phrase, logo or design that identifies a product or service and distinguishes it from others in the market.  

Advertisement: It is a public announcement or message intended to promote a product, service or idea. Types of ads are print ads, digital ads, broadcast ads, outdoor ads, event ads, experiential ads, mobile ads, video ads, influencer ads etc.  

Permission: It refers to the authorisation or consent granted by someone with authority, allowing another person or entity to perform a specific action, access information or use resources.  

Clearance: It refers to the process of obtaining official permission or approval to proceed with a particular action, project or transaction.

LDA: Legal Drinking Age in India varies from state to state. In majority of states it is 21 years and in a few states it is 25. In Goa, Pondicherry and Sikkim 18 years. Dry States are Gujarat, Bihar, Nagaland and Lakshadweep.  

Key Words: Licence, Permits, Clearance, Contracts, Registrations, Legal, Liquor, Trade, Business, Legal, Copy right, Intellectual property. 

Y. BABJI

Editor, Public Relations Voice

Academic Counsellor, Public Relations (since 1989)

AP Open University/Dr BR Ambedkar Open University

 

31: Event Sponsorship

 

B A (JMC) (3-YDC), SEMESTER SYSTEM

SEMESTER –IV

SEC III: PUBLIC RELATIONS AND EVENT MANAGEMENT

Unit-2: EVENT MANAGEMENT

LESSON-31: EVENT SPONSORSHIP

 

Objective:

1. Learn about Sponsorship.
2. Get acquainted with ways to procure sponsorships for events.
3. Understand mistakes that happen while pitching for sponsorship
4. Learn about different types of sponsorships
5. Know how to effectively engage with sponsors

Introduction:

Sponsorship is a form of partnership where one party, i.e. the Sponsor, provides financial, material or promotional support to another party i.e. the Sponsee in exchange for mutual benefits. Event, as you already know, is a planned and organised occurrence such as a meeting, conference, ceremony, festival or celebration which brings people together for a specific purpose or activity. 

Event sponsorship is when an organization provides financial assistance to an event to achieve promotional advantages. Sponsorships can come in the form of a cash exchange for assets or a barter exchange involving products or services. Event sponsorship enables sponsors to give some sort of investment in exchange for marketing at an event. Sponsorship offers several benefits for both sponsors and the entities they support. For sponsors, it can lead to increased brand visibility, enhanced reputation, access to a targeted audience, opportunities for direct customer engagement, and association with positive events or causes. Sponsors may contribute funds, goods, services, or expertise to help cover the costs of organizing and hosting the event. In return, sponsors typically receive brand opportunities, such as logo placement, advertising space, mentions in all promotional materials, and access to the event’s audience or participants. Events are amazing opportunities to get the brand in front of potential customers. Therefore, event sponsorship allows organizations to host bigger and better events faster and at a low cost–a win-win for both parties.

In this lesson we learn about the process of procuring sponsorship, common mistakes when reaching out to sponsors, ways to engage sponsors, finding right sponsors, types of sponsorship partners etc

History of Sponsorship

The history of event sponsorship can be traced back to ancient times, with the concept of sponsorship evolving over the centuries. The concept of patronage, which is related to sponsorship, dates back to the 14th century and refers to a powerful supporter or protector. First, sponsorship was born as a form of patronage or philanthropy used by members of royal or wealthy families. The decision to financially support someone or a project was dictated by the patron's personal interests, not by company objectives, and exposure was limited mainly to word of mouth. Patronage, Philanthropy are the things of past. Sponsorship is a business model that allows companies to generate revenue by offering promotional opportunities to sponsors.  In this era of globalization, securing sponsorship can be good for an event or organization in many ways.

Securing sponsorship:

The process of procuring sponsorship involves the steps like researching for potential sponsors, looking at the existing supporters, telling them the organisation’s story, providing sponsor incentives, reaching out to established companies, using data to legitimize the pitch, finding the right contact, choosing the right sponsors for the event, using online tools to find potential sponsors, creating an event sponsorship proposal letter, approaching key decision makers to sponsor the event, building a connection over time and following up everything.

Must also learn how to adapt to sponsorship packages to their needs, know the best practices in event sponsorships, how to become a reliable partner that seeks to establish a win-win situation and how to create virtual event sponsorship opportunities

Common mistakes:

Some common mistakes that event organizers make when reaching out to sponsors are  

Focus: Reaching out to sponsors is not the same thing as reaching out to attendees. It must be a tailor-made information for sponsors. Sponsorship packages with descriptions that are clearly copied and pasted from an event profile are a major turnoff for sponsors. The sponsor is not interested in attending the event, they want to know how much visibility they will get at the event, and that is fundamentally different from what attendees are interested in. All the elements of a sponsorship package need to be revised and oriented towards the sponsor, paying particular attention to the visibility and added value the sponsor can expect while getting involved in the event.

Information: Continuing with sponsorship packages, many organizers make the mistake of only having one or two-sentences description in their packages. With a lack of information, sponsors will struggle to think of event organizers as reliable and professional business partners because sponsorship is B2B that is business to business. Of course, the description texts should remain reasonably short and concise, but the organizer should not forget to clearly highlight why businesses should sponsor the event, instead of just providing basic event information. It is one of the most crucial points in the whole package.

Demographics: Sponsors are business people and therefore are striving to generate a solid ROI i.e. return on investment or ROO i.e. return on objectives through sponsorships. That means that they want to bring their brand, product, or service in front of the right audience. Here, right audience means the sponsor's exact target group. The most fundamental demographics that every event organizer should have ready for their event are gender, age, income situation, and education level, additional information about marital or employment status, as well as regional demographics, might also be crucial depending on the type of event. Always assume that the sponsor will ask for these demographics.

Packages: Sponsorship has a boring history. Luckily this is changing with a shift in mind-set towards interactive sponsorship techniques. An increasing number of sponsors have become aware that they need to be seen as added value for an event instead of being a necessary evil. Organizers have an obligation to come up with compelling proposals of how to include sponsors and how to add value to their events, while sponsors today must contribute to the success of the event. Coming up with interesting ideas means a lot of brainstorming, as well as the willingness to disrupt tradition and follow new paths.

Follow-up: Event organizers miss out on the opportunity to sell their events to sponsors by messing up the sales follow-up instead of learning how to apply proven sales techniques. Of course, it is time-consuming to follow up on every contact, but organizers should not make the mistake to hope for a quick sale after the first contact has been established. The bigger the sponsorship is, the longer it will probably take to close the deal.

Engaging Sponsors: Event organizers consider their sponsors as cash cows instead of what they are as partners who contribute to the success of their events. Partnerships are not built on advertising space rates. Partnerships are built on getting under the skin of what it means to be connected. Organizers must go the extra mile to make sponsorship compelling and communicate this right from the first contact to the sponsor. Attracting sponsors to the event has to do with not only sharing brand values and purposes but also creating unique opportunities for sponsors that enhance the attendee experience.

Sponsor needs: Potential sponsors are choosing to be a part of the event because they are expecting to see some kind of return on investment. While it cannot be guaranteed for a big return, but can give them a little peace of mind by letting them know the buying power of the event audience. Organisers must let potential sponsors know that the audience can buy and that there will be big decision-makers in attendees. It may put their sponsorship contract on the fast track. Create packages that are targeted to the needs of these companies, skipping routine things. The key is to listen to what they want, without compromising the bottom-line goal. See if they have any great ideas that will bring more innovation to the event and help them to meet their marketing goals. Then, create a sponsorship package together that has the event goals in mind, but also meet the needs of the sponsor.

Goal alignment: Thinking about what the sponsor is trying to accomplish this year is a great idea. Good to know about their goals. Start by clearly defining your sponsorship objectives. Next, categorize and prioritize sponsorship opportunities based on their potential to meet objectives. Regularly review and analyse the performance of each sponsorship using metrics and feedback to assess impact and ROI. Managing a sponsorship portfolio is essential to align a brand’s strategic goals and deliver maximum value. Best practices include setting clear sponsorship goals and objectives, regularly evaluating sponsorships, and maintaining open communication with partners.

Treatment: Teamwork is important and needed to stand together with a common goal in mind to have a successful event. Sometimes to get sponsors favorably, it is necessary to show them that they are a part of the team and not just funding the event. This may mean offering them a little something extra to give them brand awareness or a bigger ROI. The giveaways can be anything during lunch, an email blast the week before, or an interview onsite. Can include them in the event debrief after the event to get their feedback. Allow them the opportunity to have some positive buzz when partnered or give them the opportunity to co-create content to be published before or after the event.

Approach: Understand that for different sponsors and contacts, it is important to approach things in a different way. What might appeal to one person, may not to the other. For example, a salesperson is going to respond positively to leads. When speaking to them, make sure that it is mentioned about the big decision-makers that will be at the event and the number of attendees. On the other hand, when working with a marketer it is needed to show them concrete data – results from last year, differentiation, added value, and opportunities. They will also care a great deal about the price of the sponsorship.

 

Finding sponsors:

For finding the right event sponsors, it is necessary to know the event from every angle. Is it a networking mixer or a full-scale conference? What are the objectives? What is the attendee profile? Answers to these questions will guide in identifying businesses that are a natural fit for our event, based on shared goals. Now, it is time to put ourselves in potential sponsors' shoes. What are they after? It could be lead generation, brand visibility, or access to a niche market segment. If a company has sponsored a similar event, chances are, they might be up for sponsoring this too. Highlight the benefits that the sponsors will reap from sponsoring the event. Mention estimated attendee numbers, success stories from past sponsors, projected ROI for them, and glowing reviews from past sponsors and attendees.

Now that there is a plan on how to get the sponsors, next step is finding them. This requires a research. Need to understand what companies make sense to have them on-board and if it is possible to get referrals from others.

Where to find: Few tips on where to look for right kind of sponsors are:

(1)   Social media is a great way to find the right sponsors by searching through groups. Here, complete details of the company can be seen, what their interests are, their company, and where they have done business before.

(2)   Creating an advisory board with previous sponsors may help attract future sponsors. The past sponsors can give feedback on sponsorship incentives/ideas/targets. Create a referral program with other sponsors, so they can recommend key people in the industry. 

(3)   The search for the right event sponsor can be a long, difficult, or even grueling task, and the process is unique for every planner and for each type of event. Do not simply accept any sponsor who is found, but rather carefully consider the evaluative steps that will help in the search.

Money: Money, of course, plays a crucial role in sponsorship and its potential delays. Generally, the larger the sponsor the longer the on-boarding process. In fact, higher budgets can easily take a couple of months of negotiation before the sponsor will commit and transfer the money. To help speed up the process, planners need to be able to calculate event ROI and justify it to their sponsors. For event planners looking to ensure a more reliable budget, especially those who plan annual events, it could be worth investing in session-tracking event technology to prove to the sponsors the ROI in a measurable way.

Size: Smaller companies and larger corporations bring different strengths to the table. In a small company, typically the owner of one of the partners decides whether to sponsor an event or not. This essentially speeds up the process and facilitates the negotiations. Bigger companies, on the other hand, typically follow a hierarchy and workflow for approval, and quite often the contact person might not have the power to decide over a budget alone.

Pitch: Taking time to really personalize the pitch will pay off in the long run. The more complete the pitch is, the more streamlined the negotiations will be. Be sure to include these key elements for the pitch: (1) A careful and comprehensive description of the event, to ensure that the sponsor can focus on relevant questions instead of wasting time later trying to figure out the basics and (2) Find out the reasons why the sponsor should get involved, include attendee demographics like gender, age, industry, title, etc. and examples of the visibility the sponsor can expect at the event.

Preparedness: Need to have everything ready in advance like contracts, invoices, asset lists. The sponsor might ask to provide these things even before anything is signed, and if no one has them prepared, it can considerably slow down the process. It not only puts a stressful situation, but also it will make a very unprofessional impression on the sponsor. Starting early and being efficient pays off. It is time consuming to follow up on every point of contact, but event planners should not make the mistake to hope for a quick sale after the first contact has been established.

ROI: Organizers have an obligation to make sponsorships compelling and they should not dare to come up with any outdated proposals that sponsors no longer respond to. Today’s organizers need to understand the objectives sponsors are interested in and they need to make sure that the expectations of the sponsors are fulfilled. Therefore, they are looking for solid ROI or, more often today, ROO to measure the success of their sponsorship.

Visibility: Everything around sponsorship is about visibility. No sponsor will buy if they do not get the visibility they need. That is a no-brainer for seasoned event organizers, but it is sometimes a surprise for first timers. But even seasoned organizers sometimes tend to over-evaluate the visibility they can give sponsors at their event. Keep expectations grounded. Assess the potential in a very neutral and realistic way without trying to pretend some things are not attainable.

Attractiveness: This goes hand in hand with visibility but sits on top of the specific visibility that can be to grant sponsors. It is about how compelling the event is and how it can attract a large number or the right kind of audience. One of the most critical factors is the ability to execute marketing and communication surrounding the event. Keep in mind that sponsors will closely follow how you perform and will be more than happy to receive regular updates from the same before the event.

Engagement: This too goes hand in hand with visibility but extends beyond pure visibility. Unfortunately, “engagement” is often neglected by organizers even though it is one of the most important factors to win over a sponsor. It is all about enabling the sponsors to engage with the audience. Keep in mind that sponsorship moves from passive to interactive and that it is the duty to create a flexible framework for this interactivity.

Types of sponsorships:

Cash Sponsorship: Financial, or sometimes referred to as cash sponsors, continue to be the leading type of event sponsorship. A sponsor offers money to an event organizer in exchange for promotions or other benefits outlined in their sponsorship agreement. For large-scale events, one can create individual event sponsorship packages for those who agree to contribute to the organization. Defining sponsorship level is the first step to take for an event to reach its full potential. Make sure to set ambitious but realistic goals. After that, can figure out the donors, businesses to tap and select the sponsorship levels.

In-Kind Sponsorship: In-kind sponsorship provides goods or services instead of physical currency. Compared to financial sponsorship, it contributes more value to the event. Some examples of it are the following:

Venue Partnership: According to a survey report. 72% of event attendees say that an event’s location is a significant factor in deciding whether they will attend the event or not. Although planning plays a significant part in an event’s success, make sure that the location suits the organization’s brand and caters to the right audience. Choosing the right venue partner is crucial for an event to be successful. It allows organizations to host events at their venue in exchange for a discount or a free rate. Not only does this type of event sponsorship allow for the venue to gain exposure, but it also gives the organization a great place to host their event.

Prize Sponsorship: Prize sponsors choose to donate specific items with their logos for event participants. They are a popular choice to boost engagement in the event. One may hand these items out as activity-based prizes for winners. However, it should be customized to suit the business needs.

Food Sponsorship: An event is not complete without food. Delectable meals can indeed elevate the attendee experience. One can even boost everyone’s interest by offering free food. Catering is more expensive due to higher manpower. Therefore, it is essential to find a food sponsor for your next big event. It can yield significant results, like increasing event attendance and encouraging mingling among participants.

Digital Sponsors: Usually, digital sponsors are found during tech-related events. They provide either an app for the event, poll questions, media walls, or live tweets. With the recent switch in technology, digital sponsors are becoming increasingly popular in the event planning industry. People enjoy fast response time and personalization. Event venues can benefit from digital sponsors as there's a growing trend in digital event spaces popping up across the globe's most tech-driven cities. Having readily available media sponsors is key exposure tactics for the advertisement and publicity purposes of smaller companies. When media sponsors are present, the organizations spend less time and money on the advertisements. Moreover, they and do not face the difficulty of purchasing the media coverage they often require.

Promotional Partners: Compared to media sponsors, promotional partners are individual people who have a large following on social media. They can promote your organization's event to their individual fan base. Instagram has become a modern approach for brands to promote their products and drive sales.  In line with this, research says 81% of consumers say they're more likely to buy products they have encountered on social media. When it comes down to it, any kind of event sponsorship will be crucial if your organization wants to continue growing and promoting its business. Plus, it’s an excellent opportunity for your organization to reach out to other companies and create lasting connections.

What makes an Event Sponsorship valuable?

Brands can gain tremendous opportunities from strategic event sponsorships. Here are some of the benefits that a sponsor can enjoy for supporting an amazing event –

1. Brand Interaction: Aside from the visibility and awareness, events are an opportunity for brands to directly interact with prospects or current customers. It lets connect with the audience in a meaningful way.
2. Attendee Data: The database of highly qualified prospects from the attendee list is worth its weight in gold. Events are a terrific platform for advancing the brand message and staying connected with fresh targets.
3. Media Exposure: High-profile events featuring VIP attendees and speakers get ample media coverage. Sponsoring such events can give the brand free media exposure.
4. Direct Engagement: Small events are not to be dismissed. As a sponsor, the brand will likely get better quality engagements with a niche group of prospects.
5. Brand prestige: Industry influencers, top executives, VIPs attending or speaking at events have interests that may align with the business. Sponsoring the right events will open doors for lucrative opportunities and lend some level of brand prestige by association.

Summary:

Sponsorship is an exchange for an opportunity for an event either by cash or kind for a visibility. on the importance of building solid partnerships with the sponsors. Sponsorship should always be a win, win situation. It is a good way to enhance the event financially and add new services, entertainment, or learning for the attendees. On the other hand, it is good for the sponsors because they have the chance to create new business, have more brand awareness, and hopefully have a good ROI. When in the process of attracting sponsors, creating packages, and convincing people to invest in the event, think of it as a journey of discovery. Prepare to engage in lengthy and sometimes frustrating negotiations that may fail at any moment. Finding sponsors is more like running a marathon. The strategy and preparation matter just as much as the execution. It is embarking on a new relationship with an organization and get the chance to collaborate. Now, all we know is how to attract sponsors for an event. From improved brand exposure to networking opportunities and lead creation, event sponsorship can offer businesses various advantages. Another way to sponsor them without having to give them money is by giving them a variety of goods and sets that may assist in promoting your goods and services. Organisers can create a memorable brand experience for attendees, generate leads and sales, and set themselves apart from competitors in their sector by carefully choosing event sponsor.

Frequently Asked Questions (FAQs)

1. What is meant by event Sponsorship
2. How to approach a sponsor?
3. What is sponsor engagement.
4. What are the benefits to the sponsor by sponsoring event?
5. How does the sponsor get visibility?

Model Answers to FAQs:

1. Event sponsorship is when an organization provides financial assistance to an event to achieve promotional advantages. Sponsorships can come in the form of a cash exchange for assets or a barter exchange involving products or services. Event sponsorship enables sponsors to give some sort of investment in exchange for marketing at an event. When there is a good match between an event and a sponsor, one can easily spread the organization’s message without the trouble of planning the event.
2. Organiser must do proper research about the potential sponsor. Check the existing supporters of the sponsor. Keep and use data to legitimize the pitch. Use all online tools to identify suitable sponsor. Create an event sponsorship proposal letter mentioning the benefits for sponsoring the event.  Approach a connection and build a relationship to tell objective of the event. Take the proposal to the decision maker and close the deal.
3. Sponsors are the key to a successful event. They are part and parcel of the event. Therefore, organizer must flex to suits their requirements. The event must be in coordination with sponsors. Organizers must go the extra mile to make sponsorship compelling and communicate this right from the first contact to the sponsor. Attracting sponsors to the event has to do with not only sharing brand values and purposes but also creating unique opportunities for sponsors that enhance the attendee experience.
4. Event planners have an obligation to come up with compelling proposals of how to include sponsors and how to add value to their events, while sponsors today must contribute to the success of the event. By sponsoring an event a sponsor gets good opportunity to interact with the attendees of the event, place their brand identity in important places for more visibility, a participatory session where the sponsor can speak about their company and get a return on their investment.
5. Everything around sponsorship is about visibility. No sponsor will buy if they do not get the visibility they need. By using social media promotions of the event, digital media promotions, using creative ideas for sponsorship, Media coverage, Marketing and PR by the organisers a sponsor gets maximum visibility. The database of highly qualified prospects from the attendee list is worth its weight in gold. Events are a terrific platform for advancing the brand message and staying connected with fresh targets. High-profile events featuring VIP attendees and speakers get ample media coverage. Sponsoring such events can give the brand free media exposure. Industry influencers, top executives, VIPs attending or speaking at events have interests that may align with the business.

Multiple Choice Questions (MCQs):

1. Which of the following is incorrect about sponsorship?

a)      It can make immediate sale

b)      It can carry simple awareness-based messages

c)      It can make an interesting association for the audience

d)      It can provide sponsors an opportunity to blend all the tools of the promotional mix

2. What do Sponsor get in return?

a)      Brand placement

b)      Advertising

c)      Investment

d)      All of the above

3. What does ROI stand for in the context of event marketing?

Return on Investment.

Reach on Intercom.

Rate of Interest.

Return of Interest 

4. What is a primary benefit of incorporating sponsorships into event marketing strategies?

a)      Disgracing attendees

b)      Reducing event expenses

c)      Minimizing brand exposure.

d)      Lowering attendee engagement 

5. Which of the following is important for the sponsors while agreeing to partner with an event?

a)      Promotions 

b)      Engagement

c)      Return on Investment

d)      Visibility

Key to MCQs: 1 (a) 2 (d) 3 (a) 4 (b) 5 (c)

Glossary:

Hiccups: are missing information while taking decision. Organizers make the mistake of only having one or two-sentences description in their packages. With a lack of information, sponsors will struggle to think of event organizers as reliable and professional business partners.

Demographics: It is the details of the attendees for the event. It is the information details the sponsor expect from the event organisers. From the strength of attendees for the event, percentage of women, men, employed, unemployed, income group etc.

Brand Prestige: It is a privilege for a sponsor to partner with such events where the goals of each other match. Sponsor would like to engage with event in all aspects to achieve is goal. Sponsor looks for good visibility through all medium that the event is planning and also reap the benefit of sponsoring the event by getting the return on the investment.

Floor Decals are typically used for decorative or branding purposes and are often employed on vehicles, windows, laptop, walls and other surfaces where customization is desired. Floor decals are a source to increase revenue by including monetization options.

Digital sponsors: Social media, Facebook, Instagram and online tools are considered as digital sponsorship. It is a partial sponsorships accepted by the sponsor to use the platform for maximum visibility.

In-Kind sponsorship: Some sponsor may not like to shell huge money but would like to sponsor some parts of the event management like paying for venue, catering, decoration etc. This way of sponsorship can reduce of the event organisers to some extent.

Visibility: Everything around sponsorship is about visibility. No sponsor will buy if they do not get the visibility they need. By using social media promotions of the event, digital media promotions, using creative ideas for sponsorship, media coverage, marketing and PR tools by the organisers a sponsor gets maximum visibility.

Pitch: When an event organiser plan an event, it is the story telling process of the event by way of creating documents that has all plan details like goal of the event, how is it spreading around the corners, target audience, budget of the event, marketing and PR plans, venue, demographics of attendees, logistic details and what are the sponsors benefit by sponsoring the said event.

Collateral: sponsor collateral means cash collateral, letter of credit or any other forms of credit support provided by the sponsors. Here it means any type of media, be it traditional or digital that used to promote a company’s product, services or brand.

Key words: Sponsorship, Events, Brand, Visibility, Collateral, Media, Engagement, ROI, ROO.

Y. Babji,

Editor, Public Relations Voice

Academic Counsellor, Public Relations (since 1989)

AP Open University/Dr BR Ambedkar Open University