Allow me to start with a rant.
In the almost 10 years I have been in the industry, I have attended dozens of talks, read ten times as many blog-posts, scoured RFPs asking for ROI measurement and surfed countless agency sites that claim that they can measure “it.”
I have been, and remain, thoroughly disappointed.
The industry has been talking about sponsorship measurement for a (long) time.
The CEO of ANA (Association of National Advertisers) recently stated, “Despite the continued growth of sponsorship investment and the repeated sentiment from marketers that there is a need for improved measurement and assessment, there has been little progress toward this goal.”
This was following a new report by the ANA titled “Improving Sponsorship Accountability Metrics” intended to provide greater insight into, and guidance for sponsorship measurement. This study states that progress in measuring and assessing sponsorship’s business impact has been marginal.
The first Sponsorship Landscape Study published in 2007 also sheds some light on how measurement was a preoccupation then just as it is now: “Sponsorship evaluation is known to be one of the daunting challenges facing the field as it grows.” Ten years later, according to the Study, it was the same story: “Demonstrating ROI is among the top concerns for sponsors and agencies.”
Why, more than 20 years after sponsorship became mainstream, are we still talking about “the measurement challenge”?
I can count on the fingers of one hand the organizations that measure true return on investment from sponsorships.
To do so requires investments in both time and money. An ROI model needs to be built specifically for the brand: you need data, analysis, reporting. It requires commitment.
Three reasons why companies do not measure sponsorship performance
1. No one is asking for it.
A majority of executives are not familiar with ways to assess the performance of their marketing teams besides using sales, and may rely on soft assets. Not surprising, given the fact that “just less than 20% of CEOs had their “formative experience” (…) in sales and marketing (…) and tend to gravitate toward CPG companies in industries such as food, wholesale trade and retail,” according to a recent study (Marketing CEOs: Where Are They, And How Are They Different?).
Beside issues stemming from upper management, common roles and business cycles in our industry may not be set up to support long-term measurement initiatives when so many tools (and benchmarking practices) require up-front investments and foresight in order to properly draw conclusions down the road. Truly effective measurement cannot be reactive.
From a sponsorship professional’s perspective, especially as a director or a manager, is there a real incentive to put in place a sponsorship performance program, considering the price tag? We are basically asking them to be judge and jury, with the fear of opening a Pandora’s box, by evaluating their own work.
2. Your colleagues don’t take sponsorship seriously (it’s true!)
I remember a time on the brand side when my marketing colleagues referred to us as the team that was “having fun.”
Sponsorship has an uphill battle to fight in many organizations since it projects an image associated with frivolous spending:
Yes. We are always on event grounds on in sports arenas.
Yes, we have swag, inflatables, memorabilia and fleets of branded trucks.
Yes, we are involved with corporate hospitality and we need to manage a large number of tickets.
We also have to remember Senator’s Kerry’s quote in the midst of the financial crisis: "Sponsorship is an idiotic abuse of taxpayer money” while commenting a bank’s investments in sponsorship while receiving public aid.
If sponsorship is not taken seriously, it can be cut easily. I don’t want to argue the merit of sponsorship as a communication tool against, let’s say, advertising, PR or event marketing. However, if it is perceived as a nice-to-have because there are no metrics to measure its effectiveness, it is easier to cut than a promotional campaign that is directly tied to a quick burst in sales.
From my own experience on the brand side, these perceptions die hard. It took years to change the rhetoric around sponsorship. It was achieved by creating a measurement program from the ground up. While simple at first, pieces were added and built into the team’s process. The mindset of other managers and executives has changed over time, as the conversation evolved from “people were happy” to “these are the KPIs on which we were able to move the needle” and “this is the amount of money we are protecting or directly getting because of sponsorships.”
Sponsorship professionals need to be concentrating on the same message and communicate clearly about what the direct contribution of sponsorships to the organization are. For instance, British American Tobacco (BAT) had clear guidelines when it made its bold move to Formula 1: no employee was allowed to have posters, cut-outs or screen savers of the car. The marketing team and upper management made sure that everybody knew the objectives of being involved in F1, from the CEO to the doorman. It was very much a business decision, not the president’s fantasy, and this had to be reflected in the organization.
3. Lack of expertise and resources
A lot of the previous arguments come down to a lack of sponsorship expertise. Again quoting the ANA study, “few are sophisticated in their evaluation techniques.”
This issue is hard to pinpoint. Academic training in sponsorship is scarce, large organizations tend to move employees around in different roles for training purposes, the experience of people who stumble into sponsorship is quite varied which affects the way they see the medium. On top of this, sponsorship measurement is a niche within a niche that requires some media knowledge, some market research experience and perhaps some academic training.
The next wave of marketers has been groomed in the digital age. This means that they are more used to things being measured (in real time to boot) than their predecessors. Let’s hope this extends to sponsorship.
You can’t measure what you don’t know
One of the biggest issues we run into here at Elevent is being asked to measure the effectiveness of a single or full sponsorship program without any clearly defined goals, which should have been set when the agreements were negotiated.
In this day and age of real-time measurement and big data, it is astonishing to see the large number of sponsorship agreements that are inked without having clearly defined goals and objectives.
The only way to truly measure performance is to assess what specific business or marketing goals the partnerships need to achieve. So, when a program is ongoing, you need to retrofit the goals to be able to measure its effectiveness: how many people did we want to reach, does the price tag makes sense in regards to the attendance numbers? What are the sales, retention or brand goals linked to the sponsorship agreement?
In such a situation, the next step is an assessment of the overall role of sponsorship in your organization, before you go in all directions and gather useless data and metrics.
While it has been at the forefront of discussions, not many concrete solutions exist for the measurement of the often-polarizing tool that is sponsorship, because of the price tag and perceptions.
These challenges are not insurmountable. I encourage sponsorship professionals to take a leap of faith and measure their own performance then share it with their bosses and other people in the organization.
Over time, doing so will only build credibility for your work and foster a culture of performance and accountability for marketing spends. This tool, when used properly, has its rightful place along with advertising, digital, direct and PR.
Better measurement will foster investments and remove the target for spending cuts, as sponsorship can deliver on so many marketing and organizational promises.
Small B2B example:
It doesn’t have to be complicated. You don’t need a lot of tech either. Make baby steps. Imagine you are the sponsorship manager for a mid-size B2B company that sells HR management software. You stand out from your competition because of the quality of your software – and the price. You tend to do well with companies that have that premium feeling as well.
Throughout the year, you decide to sponsor 10 business events that appeal to your prospective clientele. Each event is attended by one of your 4 sales reps. Because you’ve already identified business development (leads) and brand image as priorities, you know what to measure. You can easily give your team 3 metrics to report on after attending the event.
First, how many prospective clients were there? How many were you able to add to your sales funnel after the event? With these metrics, you can easily calculate a cost per lead. And report to your boss. Or even brag to the digital marketing team that their online funnel is not as effective as shaking hands and stalking people on Linked In. Just kidding, we love the internet.
Second, on a scale of 1 to 7, how would you rate the quality – premium feeling – of the event? Next year, if you need to reduce budgets, you can prioritize similar events by looking at the quality score — an attribute you want to associate with your brand.
Remember, the value of sponsorships depends on what YOU want to get out of it. Defining your objectives — and key results associated to them — is the most important step.
Special thanks to Mitch Thompson and Francois Royer for additional input.
Assessing the value vs. spend associated with your sponsorship investment and calculating the overall return shouldn’t be cumbersome. Our proprietary software CakeMix is the only self-serve solution tool in the world that effortlessly and instantaneously values media, in-venue, sponsorship assets, activation, and owned assets. Gain a better understanding of the strategic sponsorship fit and value generators of incoming sponsorship requests by contacting us for a personalized tutorial today.
Contact us to learn more.
You can download the fantastic 2017 Canadian Sponsorship Landscape Study (and previous editions) by Norm O’Reilly and Elisa Besset here: http://www.sponsorshiplandscape.ca/
Anderson, S.J; Staantford, GSB et Germann, F (2017). Marketing CEOs: Where Are They, And How Are They Different? Presented at 2017 Winter AMA Conference, Orlando, Florida.
Sponsorship Accountability Needs Improvement, But FIFA World Cup Sponsorships Dominate
“Improving Sponsorship Accountability Metrics”, ANA and MASB, 2018.
“IEG Responds to Federal Initiative to Prohibit Financial Institution Sponsorships”