Growing competition and healthy sales are prompting new sponsorship spending by manufacturers of ultra-portable video cameras. These makers of pocket camcorders primarily are using the medium to promote new products and gain one-on-one marketing opportunities.

Sony Computer Entertainment America Inc. is close to finalizing a first-time sponsorship of Indio, Calif.’s Coachella Valley Music and Arts Festival on behalf of its Bloggie camcorder, while the Flip Video brand—acquired last year by Cisco Systems, Inc.—has sponsored extreme sports and college football properties over the past several years, including the ’09 Summer X Games and the St. Petersburg Bowl presented by Beef O’Brady’s.

In addition, DXG USA last year partnered with the Miss Universe and Miss Teen USA pageants on behalf of its Luxe Collection line of HD camcorders. The company plans to expand the tie for ’10 and sign additional deals for Luxe Collection and other products.

While sales of traditional VHS-based video recorders have been on the decline for years, consumers’ familiarity with digital media and the popularity of YouTube, Facebook and other online platforms for sharing personal content have combined to spur interest in flash-based digital video cameras, said Paul Goldberg, DXG’s senior vice president of sales and marketing.

“Sales in the pocket camcorder market have boomed. We’re seeing double-digit sales and volume growth,” he said.

One factor fueling growth: relatively low price points for electronic gadgets. Pocket camcorders typically retail for $100 to $300.

DXG USA, a subsidiary of Taiwan-based DXG Technology Corp., partnered with Miss Universe and Miss Teen USA to promote last August’s rollout of its Luxe Collection.

The company developed the feminine-focused line based on research showed that women purchasers accounted for the majority of its sales. Aligning with female-centric events to market the product was an easy decision, Goldberg said.

“How do you effectively promote a new product with a limited budget? The people that watch Miss Universe and Miss Teen USA are the consumers we need to reach,” he noted.

As the official video camera of the two pageants, DXG gave each contestant one of two $150 models: the Riviera—which features a quilted design in white, black or pink—or the Soho, which sports an argyle pattern in pink or blue. The company posted behind-the-scenes video content on its Web site and Facebook page.

The tie also included banner ads on each pageant’s Web site. Both events are produced by the Miss Universe Organization, a joint venture between Donald J. Trump and NBC Universal.

“We received a tremendous amount of press, and we sold a ton of product this year,” Goldberg said.

In addition to boosting sales, the sponsorships also helped open new sales channels, Goldberg said. “It opened the doors to some customers who didn’t previously know about us, including some retailers not in the consumer electronics field.”

Based on that success, the company is mulling additional deals this year, Goldberg said: “We’re looking at a number of targeted platforms to expand upon.”

Although the 22-year-old company is primarily interested in properties that attract a female audience, it also is considering male-oriented events, he added.

“Advertising is great, but affinity marketing often works better for companies that are fairly new. It gives you an opportunity to jump start your brand,” Goldberg said.

DXG also partnered with the Daytime Entertainment Emmy Awards last year, around which it provided HD camcorders for a celebrity photo shoot in Africa. Similar to the Miss Universe pageant, the company received integration within the event, as well as ads on the event’s Web site and exposure in its PR efforts.

Meanwhile, Sony plans to use its Coachella sponsorship for Bloggie to reach tech-savvy music fans who like to blog. The company also will continue to sponsor the festival o on behalf of PlayStation, as it has for the past couple of years.

Other companies that market pocket camcorders include Aiptek Inc.; Audiovox Corp.; Eastman Kodak Co.; Sakar Int’l, Inc. and Toshiba America, Inc.