Whilst the positive news coming out of our industry is that sponsorship revenue growth is outstripping all other paid media (excluding internet formats) with brands spending in the region of €56 billion on sponsorship this year, the more alarming statistic to come out from research commissioned by MKTG agency and quoted in WARC last month was the discovery that fewer than one in five brands know the value of their sponsorships.
“Only 19% of sponsorship professionals are confident that they can actually measure the business value return on the sponsorships they undertake, and only 37% of practitioners have a standardised process for measuring sponsorship.”
For a marketing discipline that is realising such growth and increasingly recognised as a key component of the marketing mix - allowing for unique brand affinity, product promotion and customer engagement opportunities – attention to how we measure the impact of sponsorships is critical to the continued growth and success of the industry.
Why is it important?
The increased sums of money being invested in sponsorship doesn’t only place pressure on organisations to justify the return on investment to the boardroom. The professionalisation of the industry and advancement in technology to evaluate certain elements of activation in real-time means that brands and rights holders can assess activity that is and is not working and adjust their approaches to optimise their efforts.
Moreover, true measurement and evaluation of results will provide proof-points and insights with which to enter productive re-negotiation discussions, whether they be to negotiate on price, lobby the boardroom for greater investment or adjust the required assets to meet the business’ marketing needs.
As with all marketing activity, the ultimate challenge is to be able to tie marketing activity directly back to sales and whilst the emergence of technology and data driven results across digital and social platforms has gone someway to providing more robustness around the return on investment in those channels, no one is yet to crack the ‘measurement nut’.
Research agencies: ‘horses for courses’
Media valuation and research agencies like SMG Insights and Nielsen, advanced social listening and data engine platforms such as Hookit and POWA Index are constantly innovating to find deeper insights but no-one is able to provide a complete solution in the partnership’s space. Whilst the advertising and PR industries are still reliant on outdated AVE (Advertiser Value Equivalent) media valuation and brand sentiment research, the sponsorship industry tries to piece together all these different metrics into one coherent melting pot. There are a multitude of Key Performance Indicators and metrics that need to be considered.
Sponsorship provides such a variety of marketing opportunities through the different stages of the customer relationship cycle (brand awareness, familiarity, consideration, purchase, retention and advocacy) and can be leveraged in so many ways across marketing mix (advertising, PR, direct marketing, sales promotions, events etc) that there simply is no ‘silver bullet’ that can pull a complete measurement piece together.
A bespoke solution
Such is the complexity of the challenge; it is important that brands invest in a bespoke measurement solution that addresses their requirements and not adopt what they deem to be the ‘industry norm’ of media valuation. For some businesses they will be trying to drive brand affinity, for others engagement through social and digital platforms, others will be more focused on direct sales or internal engagement. The creation of relevant KPIs (Key Performance Indicators) is critical here to ensure the measurement of a sponsorship meets the needs of the sponsor.
Here is a top line overview of the Mallory Group process that we typically undertake for our clients to arrive at a solution that addresses their needs:
1. Confirm the objectives of the partnership
2. Agree KPIs (Key Performance Indicators)
3. Confirm metrics for each KPI and the data capture tools
4. Set targets and a timeframe to work towards
5. Communicate measurement process and timelines across all stakeholders, including rights holders
6. Commission measurement – internal research functions, external research agencies etc
7. Evaluate and report findings on a consistent basis
8. Review insights to refresh strategy and enhance activation, revise rights and support renewal discussions
9. Repeat…
The resultant measurement and evaluation KPIs and metrics are typically consistent across a brands measurement ‘scorecard’ but there will likely be variety in how different sponsorship properties perform against the prescribed objectives. Indeed a large scale brand with a broad sponsorship portfolio will look to align with properties that deliver for them in different areas that address their Return On Objectives.
The longer a brand invests in measurement and builds a bank of research and data, the more informed they will be in their partnership decisions to better make use of the opportunities that exist in this industry in the future.
Get started now…
Putting the strategic building blocks in place to be able to assess the value of your sponsorships will help not only in choosing the best partnerships for your business challenges and objectives, it will give weight to the internal discussions and rationale whilst allowing you to optimise sponsorship as a marketing tool.
For more information on partnership measurement and evaluation please get in touch.
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