Sponsors had claimed that they need a better sense of ROI for their investments that media measurement or other claims of ROI that properties were providing to sponsors. In short, sponsors were demanding that the properties be responsible for providing the ROI to the sponsors. The issue has manifested itself in several measurement approaches that by default let sponsors not become involved in the measurement process. In no way are the sponsors clearly sharing their objectives to the properties, yet at the same time demanding better measurement of the ROI.

The fundamental problem is that sponsors need to take ownership of their own objectives. They need to ensure that their sponsorship objectives are clear and align with the companies overall marketing objectives. This sounds obvious but it is the critical point to which the issue and challenge of sponsorship measurement revolves. If a sponsor lacks clear sponsorship objectives, then they place the onus of measuring sponsorship ROI onto the property. They would therefore expect a property to provide sponsorship ROI on their behalf. This immediately puts the property in a position where it needs to second guess a sponsors key business objectives and motivations for their investment.

How would a property know the business objectives of a sponsor? Virtually no sponsors include properties in their company strategy meetings or in a company plan. Properties simply do not have the insider view of a sponsors objectives and it is unrealistic to expect them to know the sponsors business.

Given a lack of clear objectives, the default measurement approach has been to traditionally use media valuation and sponsorship scorecard systems. Both these methods can be easily used as they are not based on the sponsor’s key business objectives. Hence, properties use these methods in providing sponsorship ROI to sponsors.

The main criticism of the sponsorship ROI by sponsors is related to these measurements not being sufficient to demonstrate sponsorship ROI. The sponsor wants to know if a sponsorship is selling more cars or beer for example. It is a big ‘so what’ if all the sponsorship ROI is about is about counting a logo or rating the sponsorship on a scale of 1 to 10.

It has to come back to the ownership of the ROI measurement process. Only sponsors can really measure their sponsorship ROI, as they know the business objectives and are in a better position to ensure that any ROI justification is in a language that demonstrates a sound understanding of their business. Properties are not in a position to really provide the insight that a sponsor needs, instead they should be focused on doing what they do best which is engaging with fans and providing a marketing opportunity for a sponsor.

Sponsors need to step forward and take ownership of the measurement process as this is not something that a property should have to provide to a sponsor. The methodologies are available for market orientated sponsorship ROI but this is only something that the sponsors can drive forward, never the properties.

“Research is becoming an increasingly important tool to prove the value of sponsorship in an economic environment where investment is coming under greater scrutiny, according to sponsorship professionals.

Tanya Veingard, head of sponsorship at Aviva UK, which sponsors UK Athletics, says investment in necessary to evaluate the success of a sponsorship even in a recessionary environment, adding cutting research budgets is a “dangerous thing to do”. (Source: Marketing Week)

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The webinar is free and is for those properties, sponsors and agencies seeking to learn more about sponsorship measurement. A presentation is conducted via the internet with a conference call and IM to allow for interaction from participants.

The main areas covered include:

• The Business Case for Measuring Sponsorship
• Understanding Sponsorship Theory and how it relates to measurement
• Developing a measurement plan based on clear sponsorship objectives
• An explanation of the various methods for measuring sponsorship
• Examination of some case studies from both sponsors and properties
• Issues particular to properties, sponsors and agencies
• Q&As

The following schedule for is for June:

US/Americas Zone

• June 23rd Tuesday US ET 2.00pm to 3.30pm

Asia/Pacific Zone

To register your interest please leave your registration details. Once registered we will send a reminder email with more information on the webinar.

Marketing Directors and CEOs are seeking more certainty and results to be able to measure sponsorship as part of the overall marketing communications toolkit. Traditional reliance on sponsor recall and valuations of media exposure alone are simply insufficient to hold up for detailed scrutiny, sponsors want a lot more. 

Quoting a highly respected sports marketing agency.

‘Research is the Backbone of Sponsorship, it is like a lamp post for a drunken man – it is just as vital for support as illumination’

There is certainly an increased focus on survey based methods to augment sponsorship research. This is a natural development as survey based methods have been the backbone of measuring advertising effectiveness for at least two decades now. Survey based methods of evaluation both for pre-testing and tracking performance has become ingrained into the advertising landscape. This has made it a lot easier for the advertising business to communicate the value proposition and deliverables of advertising spend and has provided comfort and accountability for significant investments for major advertisers over many years. 

The sponsorship industry has been slow to reach the same level of sophistication as their advertising cousins, but in the last few months this has begun to rapidly change. It is a clear sign that understanding of the value of sponsorship is improving, the challenging economic environment has facilitated a greater focus on the industries ‘biggest issue’ and companies are responding well by conducting more survey based research which has been overdue.

The US$40+ billion global sponsorship market has needed to raise the bar in evaluation and the current environment is accelerating this transformation. 

Let’s take three examples, a soft-drinks sponsor, a mobile phone provider and an airline where the property for arguments’ sake is an european soccer team.  These three sponsors are distinctly different businesses that have quite distinct business models. When each sponsor discusses the ROI for their sponsorship investment they will consider it in terms of their own industry. A soft-drinks company will typically want to sell more cases of soft-drink whilst a mobile phone provider may want to see subscription growth and the airline may want to obtain more business class passengers or the opening of additional airline routes.

Whilst we a talking about ROI for all three, the actual numbers reported will vary depending on requirements. Any methodology that is used to report ROI needs to take into account the three different businesses themselves. If we are talking about soft-drink sales then we need to account for that in any ROI approach, the same goes for mobile phones or the airline business.

This is often forgotten and it is common to talk about ROI in terms of metrics that do not necessarily relate to the sponsor’s business. For example, the use of reports of logo exposure and media reach or arbitary rating systems that have their own series of metrics in the context of sponsorship ROI. This is useful information itself, but it is not a final ROI measurement that is sufficient to demonstrate how sponsorship benefits the business. This can be a serious mistake to make at board level where most senior executive are also seeking a financial perspective of the value of a sponsorship. A presentation that relies on estimates of media exposure is not going to be as effective as one that demonstrate sales lifts, brand equity improvements and a financial result in the language of the sponsor’s own metrics.

Dependence on pseudo ROI measures as central to sponsorship measurement often results in a sponsorship that is considered somewhat outside the regular marketing function. This may manifest itself in sponsorship research reporting that is considered in isolation from regular market reports or financial reporting. It is treating sponsorship as a ‘silo’ outside the regular business that does not integrate well with the rest of marketing simply because it chooses it’s own series of ROI metrics, a case of not comparing apples to apples.

For sponsorship ROI to work for a sponsor, it has to integrate into the language of the business. It needs to be evaluated as another part of the marketing budget and provide comparable marketing and financial metrics. Heads of Marketing and CEOs want to be able to see exactly how the sponsorship is contributing to their overall business.

This is a key consideration for the application of the SponsorMap approach. Measure all elements of the sponsorship based of how sponsorship works and then link these to existing business performance metrics. By doing so, we can identify sponsorship driven outcomes and put them into the context of the sponsor’s overall business performance.

Demonstrating how sponsorship is working on achieving business objectives by providing detailed information on sponsorship outcomes. Understanding how brand activation works for brands and identifying improvements.

For a soft-drink company we sponsor provide an estimate of soft-drink sales as well as brand specific information on brand equity improvements depending on the research brief. For a mobile phone company we can examine the sponsorship ROI in terms of key company issues such as subscription growth, total offers and churn. Airlines sponsorship ROI may involve 2 key areas, the first passengers and the second more related to corporate hospitality. The requirements for sponsorship ROI will need to be adjusted to reflect the nature of the business.

What we would be aiming for is to provide a series of ROI metrics including financial ones. A key consideration is that the ROI metrics we use need to be a currency that the sponsor understands. Talking simply about the number of media impressions or a high sponsor recall number is not enough. We should be able to talk about how the sponsorship has improved the brand, increased sales and put a dollar figure on returns made for the investment.

For properties, providing sponsor ROI is possible but is better with some customization of the measurement approach. In the example of the European Football team, providing key metrics in the language that the sponsors can easily take and report to their management teams is just smart relationship management.

This process of relating the sponsorship ROI to the sponsor’s actual business is a key reason why a considered approach to sponsorship ROI measurement will deliver a much better result that is understood and valued. It requires more effort but the results are much more meaningful and valuable to sponsors as a result of the process.

This chart below shows how incremental growth is obtained as we look at the increase on key brand metrics and attribute it to a combination of passion or gratitude ratings that are sponsorship specific.

Pre–sponsorship research involves capturing basic information on respondents just prior to commencement of a sponsorship activity. The same consumers are recontacted after the event when the complete main survey takes place. Pre-event measures include a sponsor’s brand performance indicators that also include specific survey questions that would enable us to establish the value of a customer on consumer.

These questions on consumer value need to be customized for each industry and market. For example previous calculations we have done for such industries mobile telecommunications ask about such things as monthly spend and pre-paid or regular subscriber variables. FMCG categories are different again where we established frequency of purchase and price category. To gauge value for a sponsor we would use also use a sponsor’s key variables or survey questions that determine the customer value as the basis to align with the existing approach.

By using the results of the post-event survey with the same respondents we are able to isolate the actual impact of the sponsorship. The incremental growth is normally driven by those most passionate about the property and also aware of the sponsor (‘Passionates’) and but in many cases sponsor appreciation can also be a strong driver which is apparent in from the Gratitude Index. A good activation strategy for example will result in higher Gratitude Index ratings. It is the analysis of the sponsorship that will inform us which one is working stronger in this case for a sponsor and it also informs a sponsor specifically what can be improved.

To derive a customer value figure for a particular event or series of events we simply determine the increment in consumers driven by the sponsorship and use this to calculate sales by multiplying against average customer value. This analysis is providing a more financial estimate, which is a key question many ask when the merits of sponsorship investments are evaluated. This is illustrated in the diagram below. In this case the client conducted both SponsorMap™ to assess the market potential and SponsorMap™ at major events. The matrix shown is a simplified analysis for the mobile telecommunications market sponsorship ROI. [singlepic=1,480,360,watermark,center]

Every sponsor has its own general matrix for the market which can be developed as a rich information source.