The Sponsorship ROI Debate

feature photo

Sponsorship measurement is in a state of rapid change at the moment. Sponsorship ROI is top-of-mind for a lot marketers, with sports marketing and sponsorship under a lot a pressure to demonstrate effectiveness. In September, at the Sports Business Journal Relay Worldwide Sports Sponsorship Symposium in the United States and the Marketing Week Sponsorship Summit in London, both conferences highlighted sponsorship ROI is the key issue for the industry. "The recession has put marketing budgets under the microscope and inspired marketers to emphasize immediate returns on investment". Xerox VP/Marketing & Communications Christa Carone said, “We’re in a position where we need to defend our spend more than we have in the past." There is a call for a considerable amount of re-think to the way that sponsorship has been measured. The days of media measurement being the dominant form of sponsorship measurement are coming to an end. Logo counting and audience estimation has a role, but is incapable of addressing the major ROI challenge that confronts marketers today. There is nothing new in this area except the technology. The measurements themselves do not communicate the value of sponsorship effectively and this is why sponsorship is seriously challenged. Despite efforts from logo counting research agencies, this type of measurement alone does not meet the standards required for marketing communications evaluations today, they remain old school measurements with new technology. Besides logo counting, the other area which is also widely used as a measure of ROI is the use and application of proposal screening software systems. These are quite interesting ways of pre-screening large numbers of sponsorship proposals. Useful for big companies that receive large numbers of proposals, but their short-coming is that they are not especially consumer-centric. Sponsors, specifically larger ones (US$1 million plus) should talk to their customers, as they are the best source of insights about what makes a sponsorship effective. Brands have relationships with customers that need to be considered from a consumer-centric perspective by directly listening to the customer. Sponsorship engages brands with people’s emotions and this is not captured in an automated proposal screening software system especially anything that is purporting to show the ROI without listening to the consumer. Another part of the debate is that many sponsor’s lament the lack of sponsorship ROI, yet do not seem to invest much in the way of practicing what they preach. We have major sponsors thinking that the responsibility of determining the value of company marketing expenditure should be the those engaged in receiving the sponsorship money. Companies such as Coca-Cola and Procter & Gamble certainly would not ask Walmart to measure the effectiveness of millions they spend on their trade promotions and the same logic applies to sponsorship. It does not make good business sense. This type of situation is simply bad management as it is about lack of accountability. Major sponsors have the budgets for measurement and should have a strong sense of accountability on how their own money is being spent. Looking forward, we should expect to see sponsors more clearly define their sponsorship objectives and the significantly increased use of market research to guide business decisions and answer questions on sponsorship ROI. What is very evident, is that the old school days of measuring sponsorship ROI are over as demand increases for new approaches to comprehensive sponsorship measurement.

Post a Response