Sep 22, 2016
Why we created the world’s first Sponsorfunding platform
Let’s face it, nowadays people associate the word advertisement with loss of privacy, low quality content and bad user experience. The feeling is that we have abused this marketing tool for too long now. Some companies have built empires on it and some have created technology that we defined scary, even before spying drones and humanoid robots became a thing.
How many of us have visited a website and then saw a correlated message magically appear everywhere on the web? It works well from a marketing perspective, but people perceive that as ‘they know what I do on the internet, I’m being spied’. People are scared by magic. And in truth, that’s NOT the bad side of advertisement. No wonder that ad-blockers have now gone mainstream. People see them as an antibiotic trying to fight a nasty bacteria that has entered into the bloodstream of the internet. Unfortunately it will also kill the good bacteria, those that allow the internet to work! The war is on, the industry is in turmoil. Who will win? Only the time will tell.
New monetizations strategies
The rise of ad-blockers has caused tremendous losses not only for the advertising industry, but also for publishers, makers and entrepreneurs. But the scar goes beyond the mere monetary loss, it has raised the question of whether installing a banner ad into our products is good for the users and for the product itself. The result is the increasing popularity of alternative forms of monetization, such as subscription-based memberships, micropayments, crowdfunding and even browsers that automatically pay the websites you visit — removing ads in the process.
The thought process is simple: if you like something, then you must be willing to pay for it.
But can this be applied to everything? What are the implications for the smaller, simpler projects? Are we introducing a voluntary internet tax on ourselves without even knowing it? And also, why can only individuals give monetary contributions to a project and companies can’t?
Back to the origins
I’m a big fan of historical movies, one of my favorites is Ben-Hur (the 1959 version). The most epic scene of the entire movie is the 9 minute long chariot race in the roman circus, which took 5 weeks to film and costed $1M.
In ancient Rome, competing in a chariot race required a lot of funds — good chariots, good horses and lots of training — but at the same time gave the participants exposure to hundreds of thousands of spectators and the name of the winner was resonating for days to millions of other people.
It was a huge commercial opportunity for aristocrats and businesses to put their name out there, but most of them weren’t good at riding chariots or they simply didn’t want to take risks — incidents during those races were quite common. The solution at the time was what we now call sponsorship. Businesses and aristocrats were providing funds to a chariot team in order to associate their name with it and increase their popularity with the people.
Fast-forward 2000 years and we now have sponsors supporting events, initiatives, car races, sport teams and athletes. But in the digital world, sponsorship has been suffocated by the overwhelming power of ad-tech, and numbers. Digital advertisement is easily measurable, it can be run at scale, it can be optimized, targeted and tuned to perfection to make that ROI big. It’s a blessing for companies and entrepreneurs, but sometimes it seems that nothing else matters, just the numbers do.
But, if the problem is in the numbers and the excessive use of technology, probably the solution lies in some less tech-y and more humane way of promoting a business. Think sponsorship.
Rediscovering sponsorship in the digital world
Sponsorship is a relationship in which an organization provides monetary or in-kind resources to a project — or a team, an individual, an initiative, etc. — in exchange for associating their name with such project. Contrarily to advertisement, sponsorship is a relationship, its power lies in the emotions generated by the sponsorship association or recommendation. Moreover, in the digital world, sponsorship has some extra super-powers:
- People can act immediately when they recognize a sponsor — clicking a logo, typing a URL, searching on Google, adding a bookmark, etc.
- It’s more easily — even if not completely — measurable compared to offline sponsorship.
- It’s simple to implement and it can be easily applied to multiple media — podcasts, websites, blogs, apps, browser plugins, ebooks, video, open source software, social networks, photography and more.
But what sponsorship really shines for is it’s positive effect on brand awareness and reputation. When done the right way, sponsorship generates positive emotions towards the project and the sponsors. Everybody loves sponsorship:
- Sponsors love the projects they support — ever seen the phrase ‘we are proud sponsors of…’ ?
- Projects love their sponsors because they get funds and resources but also because the relationship gives them trust and reputation.
- Users, fans, viewers, readers, listeners love the sponsors of their favorite project because they help to keep it alive and top quality.
The tide is turning
Digital sponsorship is on the rise. Podcasts are leading the way with hosts personally endorsing and giving thanks to sponsors for supporting their shows, open source software follows, with new projects every day accepting monetary contributions from companies. Slowly but steadily websites, online products and services, blogs, apps, video channels and other types of digital projects are also switching from ads to sponsors, or using a combination of ads and sponsors, crowdfunding and sponsors, or premium plans and sponsors.
How can sponsorship scale?
Real sponsorship simply can’t scale at the levels of modern advertisement. No seriously. If we start applying hardcore tech to digital sponsorship we are back to square one. But it’s also true that sponsorship as it is now it’s expensive, time consuming, not always transparent and often leads to sub-optimal brand-project relationships. But why is that?
For brands it’s not as simple as distributing a banner to thousands of websites with one click, and for projects is not as quick as installing a JavaScript snippet and forgetting about it. Sponsorship requires care.
Brands have to personally (or via an agency) find and contact the projects they want to sponsor, they exchange a few emails, receive a quote (many times based on the size of the brand), arrange the payment and then finally become a sponsor.
On the other side, makers and content creators have to setup a CRM and start contacting tens of brands in the hope that some of them will be interested in sponsoring their project.
Sometimes brands receive many sponsorship pitches and sometimes projects receives many sponsorship offers from brands, but especially for smaller brands and smaller projects this is a no-deal process, one not even worth starting.
Democratizing sponsorship
Digital sponsorship, as it is now, is not for everyone. It’s too hard to connect, and the balance of power leans too much towards the larger organizations with big marketing budgets and the larger projects with hundreds of thousands or even millions of users.
That’s why last year in October, inspired by the growing number of projects being funded by sponsors, I left my full-time job to build a platform that would allow makers and content creators to easily connect with sponsors. I call it a sponsorfunding platform because it wants to blend the simplicity and the transparency of the crowdfunding experience with the power of digital sponsorship. This year in April, John Brett joined me as cofounder and at the end of June we went live with Sponsorama, the first digital sponsorship marketplace for makers.
Since then we’ve been working to onboard a few selected early adopters to the platform and run the first transaction. The response so far has been astonishing.
Companies love the idea of building a direct relationship with online projects. One of the companies we spoke to told us that they’ve had a “a dramatic, measurable performance improvement” when they sponsored highly-relevant projects.
On the other side, projects looking for sponsors found Sponsorama to be the perfect solution for putting their sponsorship process on autopilot, freeing them valuable time to work on the things they love.
Currently we are focusing on projects in the following areas:
- Business and entrepreneurship
- Programming, UI and UX
- Science and education
So, if you are a company interested in complementing your marketing plan with sponsorship or if you have a project (a podcast, a blog, an app, a video channel, etc.) which you want to monetize with sponsorship, we want to talk to you. Go to Sponsorama.com and register to get an invite to our early access program.
