Interviews & Articles
Millsport's senior sports business executives are available for interviews, commentary, and analysis on a number of sports marketing and sponsorship topics. To arrange an interview, please contact Chris Anderson at (214) 259-3290.
Sponsorship measurement: No laughing matter
Jul 24, 2007
R-O-I. Just reading the letters can cause your stomach muscles to tighten and a cold sweat to begin forming on your forehead. Hurry, shut the door before the boss sees you reading this column.There are days you wish ROI stood for “Rate Only If (Necessary)” – OK, that’s a stretch. But you get the idea. After all, for many marketers, that’s the current policy on ROI.
Let’s say your boss asks for the return on investment of your sponsorship with [insert property here]. Do you reach for the nearest media impressions report? Call your media agency to value the included media? Call the property and tell them you need something by the end of the day? Or simply cull the data you have, sparse as it may be, and design and deliver a table which outlines your numbers in the “Fireworks” template of a Powerpoint deck?
It’s true, nothing ends an argument like good data. But the data has to be meaningful and reliable. Return on investment is serious business. In this day of traditional advertising budgets shifting to non-traditional mediums such as sponsorships and events, measuring the ROI on a dollar spent is paramount.
Meaningful ROI measurement focuses on three primary areas: (1) Revenue, (2) brand attributes, and (3) performance metrics. Whether big or small, national or international, consumer or B2B, companies will seek “return” in at least one of these areas. The brand’s position on the maturity curve will affect the importance of these variables. Mature brands may tend to place more emphasis on revenue while newer brands may emphasize brand attributes.
Revenue, the most elusive “hard measurement” of the three areas, admittedly requires the most effort and expense. It’s simply about marketing science. It requires a disciplined econometrics approach, one that’s based on regression models built with historic media and promotional spending, as well as the appropriate isolation of marketing dollars unrelated to the sponsorship or event. Anything less than this analytically sound “scorecard” approach lacks validity.
Measuring key brand attributes is a bit more straight forward. Your creative agency has (hopefully) clearly identified brand direction and position. If you’re lucky, you may even have a brand tracking research study which offers a comparative historical perspective with regular, repetitive frequency (quarterly is always a good base) related to brand strategy.
But the key question is, how are you measuring the effect of your sponsorship on brand attributes? Have you compared promotional participants to non-participants or those aware of the sponsorship to those unaware? These types of comparison offer valuable insights as to how the sponsorship is influencing consumer attitudes and purchase intent and tells a story about how your sponsorship is affecting overall consumer perception and behavior.
This brand attribute performance may be in line with revenue. Or it may not be. If it’s Year One of a five-year agreement with a new property, there may be considerable challenges to immediately impacting revenue, considering the brand starts at zero level of equity with the property. For example, there’s a difference between FedEx Field and Lucas Oil Stadium.
Performance metrics are the foundation for measuring tactical effectiveness. They don’t require much explanation. It’s the raw basics of driving website traffic, opt-ins, sweep entries, sales, etc. What are your performance targets and what is the data telling you? Analyze the data, tell the performance story and adjust tactical strategy, if necessary, to improve results.
So how do you bring it all together? That’s where the “dashboard” comes into play. Grab your morning coffee, sit down at your desk, fire up the computer, double-click your “ROI Tools” icon and have the key performance areas described above blazing with charts, graphs, ratios, trends, heat charts, comparison to objectives, and ROI metrics – all accessed through your computer. Read or print reports to your heart’s desire. By the way, this is not “Back to the Future” stuff. It’s doable. Today. And it’s broadly called “Return on Investment.”
No one has blessed it with a fancy name steeped in scientific complexity. In reality it’s just a scrappy, hard-working, good ol’ fundamental approach to determining ROI. It requires discipline and a willingness to take small steps in implementing a broader, more expensive approach to measuring success. And, it’s customizable to your business needs.
Can you afford it? I would ask, can you afford not to do it? Plan on 5-10 percent of your sponsorship budget to implement a sound measurement approach. That level of investment will offer good seed money to take your first step in developing a winning approach to ROI.
Just remember to first open your office door because you’ll want the boss to know. And wipe the sweat from your brow. It’s time to relax and address your ROI.
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Bill Glenn is vice president for strategic insights and analytics for The Marketing Arm, an engagement marketing agency based in Dallas. He serves as an adjunct professor in sponsorship marketing at the University of Dallas.
