How to create an effective sponsorship strategy

Using Tech to Empower Decision-Making

Original presentation as part of the 2017 Canadian Sponsorship Forum Xperience.

How do you know if you’re making the right sponsorship choices? This is a hard question to answer because sponsorship is a complex industry with lots of moving parts. But when you start with the data and use tech to track your progress, it empowers you to make better, more informed decisions.

How has sponsorship evolved, and where is it heading? How can this evolution be used to help events and brands work together to ensure sponsorship objectives and metrics are met? If making more informed decisions is the ultimate vision, it’s best to start out by streamlining the process to give managers the data they need to make the right choices.

The 90s were the heydays of sponsorships by the tobacco industry, particularly in festivals and sporting events. Having been forced out of traditional media, tobacco companies invested massively in this alternative communication method. Although the strategy was image-based and mostly centred on brand visibility, they got very good at understanding sponsorship contributions to their objectives, not to mention measurement and innovative structures. A lot of other companies followed them. They jumped on the bandwagon without understanding their sponsorship’s contribution to corporate, brand or marketing objectives.

What makes a good strategy has not, however, changed over the years: processes, actionable insights and focus are the three pillars of effective strategy. Process is first and foremost a balance between structure and flexibility: as a brand, you need to have a structure to support decision making and be accountable, but with enough flexibility to venture into new opportunities and learn from them, giving you and your team the right to fail from time to time.

Actionable insights mean having access to relevant data and understanding what sponsorship can do for your brand.

Finally, focus is understanding where to put your efforts, leading to greater efficiency and achieving more with the same resources. This is the most often overlooked of the three pillars.

In terms of focus, marketers are asked to do more today, and demonstrating ROI is keeping them up at night. A new study by Adobe showed that marketers have low confidence in their company’s marketing performance: only 40% think their company’s marketing is effective, but 68% think there is more pressure to show ROI on spending. This is why it’s critical to have a strong process at each step of the sponsorship lifecycle (Adobe, “WHAT KEEPS MARKETERS UP AT NIGHT?” 2015).

The sponsorship lifecyle

Now, let’s take a journey through the sponsorship lifecycle to illustrate challenges and technological solutions.

What do we mean by the sponsorship lifecycle? Besides the fact that its sounds good, these are usually steps that brands follow when entering a partnership, from a management point of view: pre-signature, entering the agreement and post-event or after a one-year cycle.

Pre-event is about finding the right properties to deliver against your objective when entering a new partnership; it’s about paying the right price and having the right assets. The post-event or yearly reporting is the ability to measure some performance and return. Before you do anything, it’s essential to have clear and achievable objectives. This may seem obvious, but brands are spending millions of dollars without having a clear understanding of sponsorship’s contribution to the organization (true story).

Pre-signature

Sponsorship as a tool is not always well understood within an organization. Even if companies that do invest in sponsorship spend 22% of their overall communication spend on average (CSLS 2017), sponsorship budgets are at risk when they are not integrated with the overall communication strategy. If you’ve worked on the sponsor side, you know that sponsorship is sometimes perceived as a nice-to-have, a promotional or a tactical tool, thus: there is a pressure to sell internally.

The pre-signature process starts with selecting the right properties that can deliver against your objectives. The first step is to draft a sponsorship policy. This document can have an internal version, stating clearly what the objectives are, and what will—and most importantly—will not be supported. A short public version can be added to the company’s website for reference.

However, there is an issue with incoming sponsorship requests and the fact that the most visible sponsors are usually the most sought after. A lot of properties and non-profits are competing for the same dollars, so managing the number of requests can be overwhelming. Filling out long questionnaires or going through emails, and phone calls, is tedious and time consuming for both properties and sponsors. Plus, only a small number from the total applicants would potentially contribute to the objectives.

Some brands have stopped accepting sponsorship requests or responding all together. Yet it’s still important to care about incoming requests for two main reasons. First, to remain open to opportunities and be aware of new trends. Currently, in the music world, for instance, it’s important to know the developing trend whereby some consumers are gradually ignoring the big music festivals to the benefit of smaller, boutique events with curated content and avid fans. Second, for most brands, dealing with requests is a client service and image issue. You just have to respond.

One solution is to use an online request management system. While there are good products out there—wait for the shameless plug—we at Elevent have created a solution, aptly named Gateway, that focuses on the one feature that’s always been the most useful: automation.

After working with very complete tools for a number of years, we knew that there was a need for a lean and simple solution focused only on sponsorhsip request management and automation. The goal was also to be client friendly and not waste anyone’s time with a lengthy questionnaire. Therefore, roughly ten significant questions will filter 80% of the incoming requests automatically, in accordance with the brand’s objectives, thereby freeing team members to do other tasks.

Entering a partnership

As we mentioned earlier, there is added pressure on marketers to demonstrate return on investment. This is not independent from the influence of digital on measurement. Indeed, as the latest marcom revolution came from digital, everything is now measured and is in real time. Plus, dollars are slowly migrating towards digital. Furthermore, the new marketing professionals entering the market are digital natives who have evolved in this digital-first environment.

Regardless of the added pressure to show return, sponsorship measurement suffers from a lack of focus; even if everybody talks about it, very few do it—just like high school! Some 59% of sponsors have no research budgets (IEG 2010), and only 3.7% (a 10-year average) of sponsorship budgets is spent on evaluation (CSLS 2016).

The measurement problem in sponsorship is complex, for there are no specific metrics to sponsorship. As Kevin Roberts, CEO, Worldwide of Saatchi & Saatchi, famously said: “Sponsorship is talking about the wrong stuff and some of the stories are juvenile. It’s trying to compete with traditional media with the old-fashioned metrics, and it’s going to lose.”

Even if still essential, measurement can’t be all about media equivalencies; after all, this same problem of effectiveness was raised with advertising in the sixties. At that time, the American Marketing Association came together and established relevant metrics to measure advertising spend.

IEG (International Event Group) was the first agency to come up with a specific measurement method back in 1992, with media equivalencies and the addition of an intangible multiplier, but according to the latest research by CSLS (2016), “a common theme among respondents was a doubt that current evaluation tactics were effective or reliable—it keeps people up at night.”

As a result, we set out to build new metrics for better decision-making tools to empower sponsorship professionals beyond media value. These new intangible measurements are based on science: we took a good look at the last 20 years of academic research on sponsorships and got to work.

These metrics are part of the first online valuation software that we created: a world-first. Entirely automated, in minutes, the solution can give you the value of a sponsorship proposal—together with those precious new metrics and industry benchmarks. Here is a sneak peek at a few of our metrics:

Brand-Fit Index: Relevent™

If I ask you if a running shoe company is a good fit for a marathon, the majority will say: “well, of course.” That’s an easy one. But how do you measure fit for a financial sector company, a telco or a pharmaceutical company? There is an objective way to measure fit between a brand and a property, and it’s based on selected variables, like image fit, brand personality, functional fit and other ingredients. The overall result is presented on a zero-to-100 scale for an easy assessment.

Audience-o-tron™

How relevant is the event or property to the target audience you are trying to reach? This index gives a quick view of the overlap between the two.

Brand Objective Index

Does the property provide you with the right assets? This score helps you understand if the proposed package is the right answer to your objectives.

Our hope is that these helpful tools will grow in popularity and gain traction in the coming years. It’s not rocket science: this is a tool to help you make better decisions. Finally, if you are a property reading this: fear not. You can benefit from valuation too, and you can craft your pitch accordingly. It’s better to know your strengths and weaknesses than being told them without being able to respond.

Measurement

Post-sponsorship measurement requires data. There’s no way around it. The good news is that data is easier and easier to come by these days. The recipe for measurement in sponsorship is easy: 1) find what your objectives are, 2) define performance indicators for those objectives 3) collect data 4) analyse against a benchmark, 5) rinse and repeat.

That being said, actually baking the cake is a little trickier. One of the challenges is to avoid failing to measure assets that are extremely valuable to your brand, like in-broadcast or webcast visibility. People who say visibility assets are now worthless in sponsorship do not understand the underlying mechanism of this tool: consumers need to be subtly but repeatedly hit with the logo for sponsorship to have an impact. Thus, the value of the exposure is still a relevant metric. It’s not the whole story of course, but it’s an important part of the story.

Unfortunately, broadcast measurement is expensive. Why? Because it’s controlled by a very small number of players, and they like to charge a lot for their efforts. Now, here’s the final shameless plug of this article, I promise. To monitor exposure, we use the latest software in logo recognition and AI. It’s called Spot. We like the name a lot.

Escaping the 90s at last

To escape from 90s-era strategy, we need to collectively use better tools to empower us to make better decisions and use sponsorship to its full potential, not just as a tactical and promotional tool. This is not just about the media value; it’s about new metrics specific to sponsorship to empower marketing pros to make better, more informed decisions.