Sports Marketing 2010

Why Brands Need to Better Optimize the Value of Their Sponsorship ROI

Viewpoint: Meaningful Measurement Can Lead to More Resources Invested in Activation

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John Rowady
John Rowady
I'm a sports-marketing guy and a believer in using marketing data to drive strategy and the creative process. Sponsors of various sporting events are struggling to seize the opportunity to provide statistics demonstrating that sponsorship is not a frivolous expense, but a means to generate business. I'm also a business owner, and I continually invest in a suite of marketing services that provide value for our clients. One of those key services is sponsorship research and ROI measurement.

A recent survey of marketing professionals by the Association of National Advertisers confirmed my view that there is a disconnect in the minds of corporate marketers with regard to measuring the return they would see in their sponsorship investment. As reported by the survey, "65% do not put in place practices that measure the effects of their sponsorships and event marketing programs."

The field of sponsorship ROI has matured to help companies save money and build business -- something CEOs and shareholders all demand -- so why aren't more companies investing in consulting and research information to help optimize the ROI of their sponsorships?

It's not due to a shortage of research companies selling sponsorship measurement. From mom-and-pop operations to large institutions, there's a wide range of expertise, with matching pricing available.

When I pose the same question to my colleague Darren Marshall, Revolution's senior VP-research, he raises the point that it may stem from industry clutter. Every day, different articles express varying opinions on what sponsorship ROI means. Ultimately, clients should use measurement services to generate ROI information to ensure that what they spend for rights fits their marketing objectives for the sponsorship. In the end, sponsors need to remember the real reason they committed to the sponsorship in the first place, and if it's not helping their brand achieve that original intended goal and/or the costs outweigh the benefits, it's time to move on.

To demonstrate this point, Darren often references the following example. A Nascar team sponsor was evaluating how a change to a less popular driver would affect the sponsorship's ROI. By understanding the chief factors that determine Nascar ROI -- the popularity, success and likability of the driver -- it was projected through research that, although incremental sales might drop in the short run, the lower price the marketer would pay would actually raise the ROI. So it made the move.

The client put it best: "I don't care how much exposure we get, what it is supposed to be worth, or what our awareness is vs. the competition's awareness. If I'm going to walk out of the room with a check, I need to be able to tell our CEO how many additional cases of product we sell thanks to each of our sports' alliances."

So what is the benefit of sponsorship ROI? As a measurement process designed for sponsors, it helps to balance the sponsorship playing field. It provides a sponsor with a refined approach to acquiring sponsorship rights, which will lead to more resources that can be invested in activation -- financial and creative. Research data concludes that the ability to activate is linked with the ability to generate positive ROI. Positive sponsorship ROI in turn recoups the investment and may generate additional business.

I'm urging more marketers to revisit the benefits of sponsorship ROI measurement, and how it can create real change for the future of their sponsorships. Meaningful ROI measurement optimizes the energy and resources invested toward the creative ideas that drive sponsorship and activation, which ultimately results in a win-win for the relationship between the sponsor and the rights holder.

So, why aren't more companies investing in consulting and research information to help optimize the ROI of their sponsorships? Is it a lack of knowledge of the research field? Are there too many research companies to choose from? Or is it skepticism that sponsorship ROI can really be measured? It remains a fact that the ability to establish ROI and make recommendations based on expert knowledge and quality data is crucial to having long-term success with any sponsorship strategy. All of which can be done for a price comparable to the percentage paid to a financial adviser. Companies pay for all kinds of advising because they know that knowledge upfront means money better spent. The same goes for their sponsorships. Sponsorship research is a part of the marketing platform, and the best ROI comes from the activation of that platform.

John Rowady is founder and president of sports-marketing and media agency Revolution. Revolution specializes in delivering marketing and media services in consulting, activation and research that offers integrated solutions for Fortune 500 companies.
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