How do marketing directors typically divvy up their sponsorship budgets? In most organisations, the marketing department has a difficult time competing for budget and moreover the sponsorship and brand partnership teams, often seen as soft marketing or brand building elements of the marketing mix, have an even tougher time lobbying against their colleagues in the more traditional marketing disciplines in advertising and PR. The result – sponsorship and partnership budgets are always tight.
Investment within the sponsorships and brand partnerships budget first and foremost goes into sponsorship rights. Often, the sponsorship and brand partnerships team stretches itself to acquire the ‘desired’ property or brand partnership relationship leaving less ‘activation budget’ to fully leverage the partnership and realise its full potential. What can then happen - particularly in the current economic climate - is the business is forced to cutback as they realise they are unlikely to hit their forecast targets. The first area of the business to receive their ‘budget task’ is likely to be marketing and hence the already insufficient activation budget - due to the pre-committed sponsorship contract - is invariably reduced.
But what one key component of the sponsorship and brand partnership budget are we yet to mention?
Measurement and evaluation.
Here are some of the reasons why I believe the measurement of sponsorship and brand partnerships is are not attributed adequate funding and attention:
1. Lack of understanding the value of sponsorship - some sponsorship and brand partnership teams are not clear on what to measure and how to do it.
2. Cost - there is no general understanding of what measurement and research around a sponsorship property might cost – hence it becomes a discretionary figure.
3. Perceived complexity - the solution is too complex requiring support from various internal and external stakeholders.
4. Global to local market challenges – for large global partnerships there is often a complex international integration that needs to occur requiring further obligations to be imposed on markets – providing more budgetary and resource challenges.
5. Not thinking long term - lack of long term understanding to how this could be useful beyond the term of the sponsorship, specifically to support rights holder renewal discussions and to provide a comparison for other sponsorship opportunities.
6. Agencies - too often, brands are getting away with agencies applying significant resource - and in some cases their own budget - to measure and evaluate the impact of sponsorships to serve their own purposes of self-promotion.
The result…
Sponsorship measurement and evaluation becomes an afterthought, a discretionary bolt on line item at the bottom of the budget when it should represent a proportion of the overall sponsorship and brand partnerships budget alongside the rights fees and activation costs.
Measurement and evaluation figures, no matter how comprehensive or lacking of substance they ultimately are, become the legacy for a sponsorship or brand partnership project. They provide the core material and proof points for the internal back-slapping that goes on ‘in-house’ and the awards entries for brands and their agencies to show-off their glorious sponsorship associations.
Going forward
The key role that measurement and research should play going forward however is in the allocation of marketing budget across a business’ marketing mix and the identification of appropriate sponsorships and brand partnerships along with the requisite rights packages.
As the sponsorship and brand partnership industry has evolved into big business over the last 20 years there is now a stronger need for a wide-ranging understanding and excellence in effectively measuring return on investment, whatever the budget available.
With the ever-increasing investment in this area of the marketing mix, accountability of these partnerships is critical to future proofing the industry. It is a not a simple solution and requires a robust and at times complex solution but it is achievable so long as the right attention is given to the budget and resource required to deliver measurement and evaluation reporting that proves marketing effectiveness.
What proportion of your sponsorship budget is allocated to measurement and return of investment?
If you need help in understanding how you can better evaluate your partnerships, we would be happy to provide an audit of what you have in place currently and what could be achieved at different price points, commensurate to the size and impact of your sponsorship and brand partnership portfolio.
Please get in touch – jamestoller@mallory-group.com
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