03.06.2015

PART 1: THE SPONSORSHIP EVALUATION DEBATE IS OVER – LONG LIVE THE SPONSORSHIP EVALUATION DEBATE

Rupert Pratt, Managing Partner and Co–Founder of Sport, Sponsorship & Entertainment Agency Generate, recently presented at the Sports Marketing Days, International Sport and Business Event hosted by Sport Win. Generate have created a series of blogs based on the content presented, focusing on the evolution of sponsorship evaluation, key trends, challenges and opportunities and the need for a more sales and loyalty focused approach to benchmarking sponsorships impact and value.

The sponsorship evaluation debate is over, but have we been having the wrong debate?

Firstly, the sponsorship evaluation debate is over. Quite simply there is enough expertise, experience, specialist research and evaluation agencies and off-the-shelf tools to comfortably argue that sponsorship is no more or no less (in my opinion more) accountable as a marketing channel than any other marketing channel. However the big question is have we been having the wrong debate?

Investing in research and evaluation

There is no doubt that being able to truly evaluate the effectiveness and success of a sponsorship campaign can help a business:

·         Make informed decisions

·         Identify strengths and weaknesses in approach and execution

·         Benchmark against competitors

·         Understand whether assets are being valued correctly

Unfortunately however, there is no ‘one-size fits all’ solution, each individual relationship must be considered to provide a bespoke evaluation.

The evolution of sponsorship evaluation

As sponsorship grew into a potential marketing tool, the size of investments being made started to considerably increase.  Justifying these investments naturally then became the next step.

It therefore seemed a sensible solution to utilise and apply a pre-existing and proven evaluation framework from another element of the marketing mix; advertising. Equivalent Media Value (EMV) has provided sponsorship with a suitable benchmarking platform to ensure a monetary value can be attributed to anything from on-pitch perimeter boards to branded stretchers. Using this methodology has worked to a degree and has remained largely unchallenged (perhaps partially due to the suitably large numbers it tends to generate).

Unfortunately, however we have been ignoring the fact that sponsorship is not and will never be advertising. Sponsorship by definition engages fans/consumers emotively in a subject matter that they are passionate about to deliver unrivalled loyalty; arguably, therefore sponsorship should be evaluated against its ability to deliver against these objectives.  EMV alone can not provide a detailed enough evaluation framework as it will never be able to determine the level of emotive engagement generated by a specific sponsorship campaign.

As the sponsorship Industry became more sophisticated, so did its evaluation methodology

Sponsorship evaluation evolved to include a broader suite of tools including quantitative and qualitative analysis whereby Return on Objectives (ROO) as well as Return on Investment (ROI) were considered.

When combined with EMV, sponsors and Rights Holders were able to assess whether the sponsorship was actually impacting on their brand, i.e. are rugby fans more likely to consider purchasing Heineken as a result of their affiliation with Rugby World Cup?

However the very foundation for sponsorship evaluation is varied, complex and questionable

Firstly, we should question the very effectiveness of EMV as an evaluation tool as there are uncertainties around the actual success of ‘badging’, i.e. banner and logo placement. Are we as fans all reading and watching the adverts or perimeter boards in the first place? The ability for consumers or fans to become engaged in on-pitch performance, second screen or even fast-forward through adverts potentially devalues EMV from both an advertising and sponsorship perspective.

Secondly, what is the likely impact of such specific brand exposure; are fans really more likely to purchase or consider purchasing a product as a direct result of seeing match day Perimeter Boards? Only market research can determine this, but it would be a challenge to monitor and analyse propensity to purchase trends based purely on ‘badging’.

The evolution of digital media further devalues EMV

Finally, the emergence of media fragmentation, by which we mean, the numerous channels that can be used to consume sport, music, entertainment and the like, has raised the question about whether we are actually evaluating sponsorship appropriately at all. Consumers can watch what they want, when they want and therefore the opportunity to see ‘sponsorship badging’ declines as there is no way of guaranteeing that the (targeted) audience will watch a specific match at the time you want on the device you want.

If the use of EMV as a valuation and evaluation tool is limiting and ‘selling sponsorship short’ in terms of demonstrating its overall impact we have to ask the question why is the industry so focused on it as the main benchmark for value and effectiveness?

Look no further than the Olympic Sponsorship Platform

Some of the more sophisticated sponsors are now completely ignoring the value of the branding at the event and the subsequent EMV believing that it devalues the opportunity and is distraction for the business and its sponsorship strategy. The best example of this in action is the Olympic sponsorship platform, where some of the largest sponsorship investments are made with no ‘tangible media assets’ but based on the power of association and emotive engagement.

In Part Two we look at a simpler, more accurate and effective way of demonstrating ‘the real value and impact of sponsorship’ but also consider whether the industry is afraid of the potential results.

To receive the full report or to find out more about the work our sponsorship consultancy team are doing to cost effectively demonstrate sales impact and the ‘real value’ of sponsorship please contact Rupert Pratt, Managing Partner at rupert.pratt@mongooseagency.com

See part 2 of the blog here

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