How To Measure True Sponsorship Value (A Framework)

“That was fantastic. Let’s do it again -- but bigger!” says the marketer in an after-action review or post-buy meeting. I cringe when I hear those words, since those are two decisions made right there. Apparently we are going to do “it” again, and doing “it” bigger will beat the results from the previous time we did “it.”

Why is there no consideration for “Let’s do it again, but smaller” or “Let’s not do it again” in the discussion? Even if “it” was deemed a success, “again” should never be the default.

It’s s time to make a serious effort to calculate the value of sponsorship packages.

First, let’s agree that “sponsorship” extends well beyond the parameters of sports. There are sponsorships of TV shows, celebrities (sports or otherwise), online pages and content, newspaper sections, etc. I have applied the following model successfully in my previous two marketing roles for a variety of markets, helping to justify or evaluate the “real” value of a sponsorship package.



There are three categories of sponsorship value (expand as you see fit):

On-premise value: Any signage or other product promotion included in the cost at the event/venue/page/etc. Think of stadium boards, menu boards, neons or other branded fixtures. Or if reviewing a page/content property: product placement, brand name inclusion, etc. In principle, any commercial inclusion that is not media. Include here on-premise sales as well, if part of the deal.

Off-premise value: Any marketing rights that are a result of the sponsorship agreement (logo usage, content usage, national, regional or local promotion rights, celebrity usage, etc.).

Intrinsic values: All elements of the deal that carry a verifiable value, such as tickets, sky boxes, media space including digital media, etc.

It isn’t always easy to place a numerical value on all these elements because there isn’t always a rate card. You will have to work with your specialists (internal or external) to come up with an acceptable number. I recommend a group approach to assigning values to these elements, as crowd wisdom will beat individual wisdom, no matter how experienced you are.

You will need to be equally diligent with how you calculate the real sponsorship cost to you. That means calculating beyond the negotiated asking price. If you are doing a deal for three years, you will need to calculate a best estimate of the marketing development cost for those three years. And be precise, so include not only cost for advertising, but also cost for developing art work in a variety of other touch points such as point of sale/consumption, internal materials, promotional materials, etc.

Don’t forget media cost either. There is an unwritten rule that says you need to invest an equal amount of money in media relative to sponsorship costs to ensure consumers are actually aware of and included in your efforts. Personally, I think this rule is a little too generous to media (it was probably invented by media owners.). But you must absolutely communicate the sponsorship story to your consumers in order to generate effect, and here you have plenty of opportunity to use the Zero Paid Media principles!

So: above the line you place the total cost of on-premise value, off-premise value and intrinsic value; below the line your acquisition, marketing and media cost. And voila: now you have a true measure of (anticipated) ROI, and you can answer the question: “Should we do that again, but bigger?”

1 comment about "How To Measure True Sponsorship Value (A Framework)".
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  1. Bob Johnston from SponsorHub, July 21, 2014 at 11:16 a.m.

    Great piece, Maarten. Also think that adding in things like the digital amplification of a brand's "fan base" is a great way to show value (and tying that to sales is even better, too).

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