Sports Portfolio Optimization A Hot Topic With Brands

In today's evolving sports marketing landscape, agencies are having more frequent conversations with brands regarding the "optimization" of their sponsorship and event portfolios. The upswing in discussion makes sense, as brands have been in a downsize mode or a holding pattern in recent years, specifically in regards to new sponsorships and renewals.

With the economy slowly improving, many brands that had been distancing themselves from investing in sponsorships are again looking, or are at least preparing to make sponsorship an integral part of their marketing mix. And while not all brands responded to negative public portrayals of sponsorship by cutting sponsorship-specific programs and staffing, many are wondering if their current mix of assets and activations are as effective as they could be. All seem to agree that a thoughtful, targeted approach is necessary. Now, these brands are looking with a greater urgency for definitive answers about where they should focus their sponsorship activities.

Currently, the marketplace is divided over what constitutes good ROI from sponsorship. Few marketers can agree on how to best measure ROI or even if it is possible to measure a specific sponsorship or activation's direct impact on revenue. In turn, the people who are responsible for determining such things are looking around and finding that they are short on internal talent to help them; talent that became an unfortunate casualty of the economic downturn that bottomed out in 2008-09.

As a result very few brands, and even fewer agencies, now have access to the expertise and experience required to assist in a 360 degree review of sponsorships and events enterprises. How proposals are submitted and initially reviewed, and the establishment of data-driven means to select opportunities, are processes that are time consuming and use specific expertise to understand and evaluate. Brands may find it difficult to get the full picture of the sponsorship ROI because they may have to piece together data from internal and external sources. Can they trust the ROI information from an agency which actively sells sponsorships for various rights holders and which thereby creates a conflict of interest?

Most acknowledge they are trying to avoid dilution of their brand message and "activation commoditization." The latter refers to the fact that sports fans tune out standard activations that often have rotating brands, such as the "insert brand here" scoreboard race. While still a mildly amusing stadium tactic, do the fans ultimately remember (or care) who sponsored it? Measuring each individual sponsorship's impact on ROI-and also the cumulative effect of the whole portfolio on brand positioning-then adapting programs to heighten their ROI potential is really the ultimate goal.

To do all of this in a way that is useful in planning is still the challenge. This challenge includes having the most reliable information possible on best practices, and the ability to look at how sponsorship and events are handled internally. Toss in the necessary analysis of the sponsorship's fair-market value, audience overlap, activation pitfalls and ROI measurement modeling, and the process may become overwhelming and unwieldy. Capturing all of the data is no small feat by any means and with more and more brands becoming interested in sponsorships, the demand and necessity for these numbers will continue to rise.

Some industries and corresponding sports properties are already utilizing information to maximize their sponsorships' effects on their bottom line. Brands in the automotive field, for example, have been the first to adapt this mindset of having each and every sponsorship opportunity and event enterprise handled the right way. This includes everything from how sponsorship proposals are reviewed, to how events are measured and evaluated and every internal process in between.

This heightened interest in process and portfolio optimization certainly seems to signify a trend towards a renewed focus on sports sponsorship and events, possibly foretelling a lift in new sponsorship spending. While it is too soon to say that for sure, we do know that brands are increasingly being challenged to show how well their sponsorships and events programs deliver bottom-line results and to look for new ways to beat clutter and commoditized activation. And after all, differentiating your brand and improving the bottom are what sponsorship is all about.

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