Like any field, sponsorship has its own terminology. Whether you are planning to sponsor something, or are seeking a sponsor, it is important to know some of the terms used.

According to Wikipedia - To sponsor something is to support an event, activity, person, or organization financially or through the provision of products or services. A sponsor is the individual or group that provides the support, similar to a benefactor.

The most common usage though, refers to a sponsor as someone who pays for the rights to display a logo or corporate name on something.  When used in this way, sponsorship refers to a form of advertising. There may be other benefits the sponsor receives, such as, event tickets, media advertising, or the opportunity to sell products at an event.

Sponsorship is a very common form of advertising in sports and arts venues. Companies may sponsor an event, an athlete, a program, or a wide variety of related things.  Sponsorship is used primarily as a way for companies to increase brand recognition.  The value of a company's brand may be increased not only from the exposure sponsorship brings, but also the positive associations consumers may make between the company and the organization or event it sponsors.

Some othe important things to know about sponsorship are:

Activation - The additional costs to a sponsor, over the cost of the sponsorship rights, for promoting the sponsorship to its fullest potential. Activation may include additional advertising, inclusion of the sponsorship in existing advertising, or a public relations campaign.

Assets - The places owned by an organization that have the potential to display a corporate brand name or logo.  These places may be a part of a building or venue, may be on literature or may be placements in media.  These assets have a value that can be determined, priced and sold to sponsors.

Bundling - This is the grouping of various assets into packages that are sold to the sponsor as a group. As an example, a bundle might include the opportunity for a sponsor to display a banner at the finish line, their logo on participants t-shirts, four passes to a VIP tent, and a picture with the winning athlete.  This might be described in a proposal as a certain level of sponsorship opportunity.

Evaluation - The process of attaching a value on each asset in a property's inventory.  This value is usually based on the number of impressions (the number of times people see the logo) the property can deliver.  Unique sales opportunities at an event, media coverage of an event, and the ability of an event or property to appeal to a specific demographic, will affect the evaluation of the inventory.

Event - A gathering, festival, athletic event, play, concert, or similar function that provides a sponsor opportunities to display a corporate brand or logo.  The event may be professional, such as a sporting event or concert, or it may be charitable, such as a fundraising run or gala.  Both types of events have the potential to attract sponsors.

Fulfillment - When the promises made to a sponsor by an organization or property in its proposal are kept and the sponsor realizes their return on investment.

Inventory - All of the assets of an organization, property or event are known as its inventory.

Property - Another term for the assets owned by an organization that have the potential to be exploited by a commercial sponsor. The property may refer to a building, such as an arena or stadium, but it may also refer to an event or to media.

Proposal - The document that the owners of a property prepare to solicit a sponsorship from a corporation.  The proposal will typically list the inventory of assets, offer a bundle of those assets, declare the price for the bundle and describe the evaluation that was used to determine the price. It will also describe past events, the potential for activation and other benefits to the sponsor.

Prospect - The potential buyer of a sponsorship, who is usually a company who is selling products that are likely to be of interest to the people that are being attracted to a certain property or event.  Usually prospects for sponsorships are consumer goods companies. The company may have people dedicated to buying sponsorships or this may be done by the marketing department.

Return on Investment (ROI) - The method a sponsor uses to determine the business result from the money that was invested in a sponsorship. There are various ways of calculating ROI, depending on the sponsors objectives. ROI may be very specific, such as actual product sales at an event, or it may be more general, such as increase in brand awareness over a period of time.