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Measuring Sponsorship Return on Investment

by Mitch Thompson
  
30 08 2011

This week we have a guest blogger from Desperado Marketing, which is a client side sponsorship marketing agency with offices in Chicago and Toronto. Core competencies reside in creating, activating and measuring integrated business solutions around sponsorship marketing initiatives.Specifically, Desperado Marketing’s expertise includes: sponsorship strategy, sponsorship opportunity valuation (and evaluation), sponsorship property and rights negotiation and acquisition, activation planning and execution, sponsorship integrated communication plan development, sponsorship ROI measurement. They are listed on our resources page and you are welcome to review for more information.

No matter what industry you’re working in, most organizations have spent the last ten plus years driving costs out of the system with fervour. Whether it’s in logistics, production, supply chain, or another functional area, everyone across the enterprise has been tasked to do more with less.

During the same period, the marketing mix has become much more complex and effectively reaching your target audience has become net-net, more expensive.

As a result, there is increased scrutiny on the marketing function.  There is a demand for greater efficiency and as marketers, we’re being challenged to prove-out investments like never before. The only marketing initiatives worth investing in are those which prove to move the needle on key business indicators.

Moving forward, what gets measured will get funded.

It’s where business is going.

Sponsorship return on investment (ROI) measurement is a matter of understanding the benefits of a sponsorship property in terms of its contributions towards your specific business and brand objectives. The metrics that are used to measure progress towards such objectives usually vary from industry to industry, and from company to company.

For example, within the auto industry it would make sense for a company to track the number of test drives generated at a sponsored event. A financial services brand, on the other hand, would focus on incremental credit card usage or the number of customers redeeming a special offer, both tracked back to the sponsorship.

A packaged goods company will often measure the benefits of a sponsorship at retail in terms of shelf-space that could be leveraged, sales, or the number of incremental displays. And a business-to-business brand will often include measurement around hospitality – i.e., the number of key clients entertained and the follow-up business that was gained. These are just a few examples of sponsorship metrics, but the key observation is that the metrics are customized based on what generates a business benefit for the sponsor as the result a particular sponsorship.


Sponsorship ROI and Valuation

Ideally, these unique marketing metrics are translatable to dollars, thus completing the connection between property valuation and property ROI measurement. Property valuation is a complex process which is very important for sponsorship negotiation guidance as well as overall sponsorship portfolio management. Valuing a property before choosing to invest is always done in dollars, as rights fees are paid for in dollars. Therefore, if ROI metrics can be translated to dollars, a better comparison between what was invested and what was “earned” can take place.

ROI measurement allows you to prove investments’ worth to upper management, and make the best decisions about what sponsorships deserve your company’s continued investment and which should be revisited. In this sense, it is easy to see how valuation processes and ROI measurement work hand in hand when it comes to sponsorship portfolio management. ROI measurement tells you what properties and assets within your portfolio to renew, and a proper valuation allows you to renew them in a smart and financially efficient manner.


Sponsorship ROI and Activation

While measurement can help to evaluate if a property’s assets are worth reinvestment, how a brand leverages their sponsorship through activation is often just as, if not more, important to overall sponsorship success. Measuring the effectiveness of activation practices allows a sponsor to recognize which supplemental marketing initiatives surrounding a sponsorship achieve results and which initiatives do not. These conclusions can be particularly useful for planning sponsorship activation in the future - not only for the property being analyzed, but for other properties too.

Assessing both sponsorship assets and sponsorship activation through measurement protocols must take place in order to make informed sponsorship portfolio management decisions.


Easier Said than Done

It should come as no surprise that making the investment in sponsorship ROI measurement is not viewed as an attractive spend amongst many marketers. Such an investment does not always produce immediate results, and it certainly doesn’t win advertising awards. But if the goal is to achieve marketing objectives – measurement is a must.

Effective sponsorship ROI practices involve instilling a system of measurement, data submission and analysis. Over time, benchmarks are developed for various property types and metrics. Over time, properties, assets, and activation initiatives that do not show results are cut from the sponsorship portfolio and those which demonstrate success are targeted for growth and emulation. The result is a sponsorship portfolio consisting only of effective properties and effective activation initiatives.


True ROITM

Desperado Marketing’s proprietary sponsorship measurement protocol, True ROITM, ensures that our clients only undertake effective and efficient sponsorship practices. Our process of organizing, analyzing, and prioritizing key metrics leads to confident decision-making and increased ROI performance.

If you wish discuss the topic of Sponsorship ROI Measurement in more detail, please get in touch by email ([email protected]) or through Desperado’s twitter account: @DesperadoMKTG.

 

Categories:   ROI | sponsorship activation | Sponsorship Valuation
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Quality Sponsor Perks

by Emily Taylor
  
24 08 2011

I recently attended a “sponsor pick up party,” one of our clients throws every year about a month before their big annual event.  The purpose of the party is to provide the sponsors with their VIP/hospitality goodie bags full of tickets, extra VIP passes, or whatever else has been uniquely promised to them for pick up.  All the while they are being offered appetizers, drinks, and the opportunity to network with other sponsors. 

I love events like this.  I honestly think it is brilliant for properties to add “perks” like this to the sponsorship experience – it does everyone a lot of good.  As I perused the table of snacks (provided by one of their sponsors) I heard numerous sponsors chatting over cocktails (also provided by one of their sponsors), handing out cards, discussing their enjoyment of the upcoming event, etc.  To step it up, I can also think of 2 conversations I was a part of where two of the sponsors ended up discussing how they might work together in the future for a “bigger bang for their buck.”  I was inwardly grinning at the value the property had provided – and they were also benefiting from the interactions they encouraged. The fact that these sponsors were talking about next year’s efforts was significant in the implication that they would be around for it – I think if I were the property representative I would have been tempted to bring out the renewal contract and asked them to sign on the dotted line right then and there.  The property wanted their sponsors to feel loyal to the effort, wanted the activation efforts to improve, and wanted the sponsors to benefit from cross partnerships, and possibly even grow their own bottom line or meet other business needs by networking with other professionals.  It cost the property very little because of all the in kind support, and it was a truly worthwhile effort. 

Now, there are ways that you can ensure this time is valuable – not all sponsors are as proactive and effective with their time as these seemed to be; and by adding a little structure / direction to your sponsor parties can maximize the potential for return.  Here are some ideas:

  1. Pump up the jam!  Are you trying to draw out excitement over your efforts, stir the endorphins or the loyalty of your partners?  Pause halfway through the event and show a brief video/slide show of past events, or the sponsor logos of those partners involved – whatever message you want to leave them with, give them a visual with some appropriate musical support, and feel the mood elevator go up and the energy level climb.  This appeals to a mood – and sponsors are people, they like to “feel good” about an effort too.
  2. Intentional presenters.  Ask a couple of your partners who did an excellent job at activating their partnership to give  an appropriately timed presentation about what they did, why it worked, and why they’re returning, or what they would like to see next year. I say appropriately timed because if this is a mixer, no one wants to sit down for a sermon or a long presentation, they want to eat and drink and mix it up.  2-5 minutes is all you can offer without sending them packing. Be intentional about who you ask to present instead of opening up the floor because let’s face it, there is a Nancy Negativity in every crowd and the last thing you want to do is put a damper on the day and make a sponsor question their involvement. Put the spotlight on the positive. 
  3. Direct conversations:  Maybe after you present your slide show or you introduce staff for the year, you offer a suggestion to network and discuss what’s working for you – get them interested in how they are participating.  You might also consider the fact that you have them there for a reason, there are things you know about each one of them that they might not know about each other.  Facilitate quality networking by introducing Joe to Ted; bring your vendors (if you have any) leads from other business partners – the fact that I attended the party was strictly so that we might gain new business – they didn’t have to invite us, but they did. It scored points with me. 
  4. Offer an incentive or surprise for attending.  Perhaps this is as simple as giving out a Wii as a door prize, or maybe you close the party by reminding them they have a month to renew at a discounted rate, etc.

There are literally hundreds of ways you can keep this effort unique and valuable.  But as always, I’m a fan of being intentional – think it through to maximize benefit.  Perks are exciting because they are above and beyond, “extra,” the icing on the cake – are you going above and beyond?  Do it!  You’ll benefit as much as your partners do.  If anything, you’ll be the facilitator of good things and be remembered for that in your partnership experience.  Other tips for adding value?  Please, feel free to share!

Categories:   contracts | General | sponsorship activation | sponsorship sales
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Developing Your Sponsorship Leadership Practices

by Emily Taylor
  
17 08 2011

Stopping to evaluate your efforts as a sponsorship leader at least once per year is a MUST if you want to get to next as a leader.  Bill Hybels, pastor of Willow Creek Community Church has a goal of developing your leadership by just 10% per year (this church puts on the leadership summit every year where hundreds of thousands of leaders all over the world tune in).  10% doesn’t sound like a lot, but if you consider the fact that in just 10 years you could be an entirely new leader, that doesn’t sound too bad.  Reflect for a moment on your last 2 years – how are you a different leader? Have you been intentional enough to grow?  Can you get specific as to how you’ve grown?  As my old boss used to say “know your scoreboard – it’s the best way to gauge progress.”  Let’s talk about a few items to evaluate and points to consider as you grow:

  1.  According to Bill Hybels; it takes “fantastic” people to activate change.  If you are a sponsorship director, a property manager, brand manager, or lead a sponsorship related team of activators in any form; this is a relevant point for you.  When you put a team together, it’s critical for you to consider the true abilities of the talent you hire.  I found in my first years of management that I tended to under estimate the abilities of my team.  I got excited about performances that really should have been satisfactory; what they were hired for – not above and beyond.  My boss coached me to remember that if I expected extraordinary results, I had to expect extraordinary practices.  That doesn’t happen unless you hire extraordinary “fantastic” people.  The next question you must ask is: are you developing your talent?  How are you coaching them, challenging them, requiring them to think beyond the way they did yesterday?
  2. Idea days – Daniel Pink, author of: Drive, indicates that autonomy is one of 3 key motivators. He references the fact that Google really has this down.  They give their employees the freedom to do whatever they want with 20% of their time.  Obviously you can’t really do this overnight, but you might consider giving your staff freedom to get creative.  How are you enabling them to strategize ways to become better at partnerships?  More productivity is accomplished when a passionate staff member is given the freedom to invent, get creative, etc.  It can be a very structured effort to allow for a bit of unstructured work time.  Keep in mind that “idea days” can’t just be offered overnight – you need to coach your team so that they know what you expect out of this time.  And accountability around this effort is a must, at least until it can be proven that this time is used well.
  3. Builders and Bankers: These are two types of leaders according to T.D. Jakes.  Builders are able to build a fire out of little to nothing.  They turn things around, typically they’re better at building than in maintaining.  Then you have Bankers: they are able to keep the fire going that the builder started; they’re the maintainers.    What are you?  A builder or a banker? In order for your efforts to grow, you really need both on your team – so make sure you have built a team that complements whatever mindset you bring to the table. 

I’d love to hear insights from other great leaders who have made leaps and bounds as a result of intentional practices.  Please offer your best practices for leadership development should you be inspired to teach and grow the leaders in our industry. 

Categories:   General
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