Sponsorships and Endorsements: Paying for Attention

Why brands pay teams, athletes, stars and online creators to carry their names, and how they judge whether it is worth it.

Look at almost any cricket jersey, football stadium or film premiere and you’ll find brand names. A sponsorship is a deal in which a company pays a team, event or person in exchange for publicity and a connection to them. An endorsement is a specific kind of sponsorship where a well-known person promotes a product, often appearing in its advertising. For brands, these deals are a way of buying attention and trust; for athletes, stars and online creators, they are often a major source of income.

What brands are really buying

Brands pay for two things. The first is reach - the number of people who will see or hear their name. A logo on a team shirt appears in every broadcast, highlight and photo. The second, and often more valuable, is brand association - the hope that some of the admiration fans feel for a team or star will rub off on the product. A sports drink linked to a champion athlete suggests energy and success in a way a plain advertisement cannot.

This is why the biggest stars can earn more from endorsements than from their salaries, and why a league’s title sponsorship - putting a brand name in the competition’s name itself - can command very high fees.

From stars to creators

The same logic now applies to online creators. A creator with a smaller but highly engaged audience - say, a channel about cooking or cricket analysis - can offer a brand something valuable: trust within a specific community. Brands increasingly split budgets between a few big celebrities and many smaller creators, sometimes called micro-influencers. The broader business of making a living online is covered in the digital economy module; here the focus is on the brand’s side of the deal.

Comparing two sponsorship options

A shoe company has 50 lakh rupees to spend. Option one: a single post by a film star with 2 crore followers. Option two: 25 creators, each with around 1 lakh followers who are keen amateur runners, paid 2 lakh rupees each. The star reaches far more people, but most aren't looking for running shoes. The creators reach fewer people, but a much higher share might actually buy. The better choice depends on whether the brand wants broad awareness or direct sales.

Measuring whether it pays

Measuring the return on a sponsorship is difficult. Brands track things like how long their logo appears on screen, how often they’re mentioned, website visits, discount-code use and surveys of brand awareness. Online deals are easier to measure, because clicks and sales can be traced. For large stadium or jersey deals, much of the value is long-term reputation, which is hard to put a number on.

The risks

Sponsorship ties a brand’s reputation to someone else’s behaviour. If a star is caught in a scandal, the brand may be damaged too. Many contracts therefore include a morals clause, allowing the sponsor to end the deal if the person’s conduct harms the brand. Viewers also have a stake: in many countries, including India, rules require paid promotions by influencers to be clearly disclosed, so audiences know when a recommendation is an advertisement.

Assuming more followers always means more value

Follower counts measure reach, not influence. A smaller audience that trusts a creator and matches the product can be worth more to a brand than a huge audience with little interest in what is being sold.

Key takeaways

Sponsorships and endorsements let brands buy reach and a positive association.
Top stars can earn more from endorsements than from their main salaries.
Smaller creators with engaged audiences can offer strong value for targeted products.
Sponsorship carries reputational risk, and paid promotions should be clearly disclosed.