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 (ian@desperadomarketing.com) or through Desperado’s twitter account: @DesperadoMKTG.