• by BJ Roth , February 25, 2019

According to a July, 2018 study by the Association of National Advertisers (ANA) and Marketing Accountability Standards Board (MASB), 63% of marketers do not have a standardized process for measuring return on sponsorship initiatives.

Further, nearly half (43%) do not have or are unsure whether they have a dedicated sponsorship measurement budget. Less than one-third (30%) audit or verify the metrics agreed upon with the sponsorship supplier.

The pool for the study (entitled “Improving Sponsorship Accountability Metrics”) was ANA members – which comprise many of the largest and most sophisticated marketers in the U.S.

Clearly, many companies have an opportunity to up their games with respect to sponsorship accountability. How confident are you that your organization doesn’t fall into this category? If it does, take solace; you are not alone. However, it is not too late to begin instituting some improvements in this area.

There are three key areas to address in order for an organization to implement a disciplined sponsorship accountability program:

1. Translate your business objectives into specific, measurable sponsorship KPIs

2. Ensure specific sponsorship elements (and the KPIs and methodology for measuring them) are written into your sponsorship agreements and your plans for activating them

3. Measure and validate each sponsorship’s performance against these KPIs in order to quantify success and to inform continuous improvement

What Will You Measure?

As the ANA/MASB study indicates, many marketers don’t have a specific process for measurement or a dedicated budget for doing so. If you have done a good job determining what you want to accomplish with your organization’s sponsorships, then select success metrics which align with these objectives.

The more closely your KPIs align with your established objectives, the more confidently your organization can determine a sponsorship’s performance and ROI. Moreover, it’s crucial your primary KPIs be objective and quantifiable – and there is a specific methodology (including measurement resources) for each performance metric.

As the ANA/MASB study notes, there is a spectrum of sophistication (and complexity) when it comes to sponsorship accountability measurement. Choose KPIs you will be able to empirically measure.  As with other paid media investments, brands should never rely on self reporting to determine fulfillment of contractual expectations.

Are Your KPIs In Agreement?

Once you establish the KPIs important and the methodology for measuring performance against those metrics, it’s critical they be written into your sponsorship agreement. This is basic supply chain management in many other aspects of business. But for whatever reason, in areas like paid media and sponsorships, the dots are not always connected in the contracts and purchase orders.

If something is important enough to be identified as a key performance metric through the process outlined earlier, then it should be identified as such in the sponsorship agreement. Methodology and timing for measurement and reporting of each metric should be identified, as should consequences for nonperformance against one or more KPIs.

How Will You Validate Performance?

More than two-thirds of marketers in the ANA/MASB study don’t implement any third-party validation of their sponsorship’s performance. At best, they receive performance data from the selling entity, and leave it at that. Is the seller reporting on the KPIs that are most important to the brand? Is the measurement methodology sound and in the buyer’s best interest?

With the dollars at stake here — and the importance of these sponsorship partnerships to brands — the best practice is to have KPIs validated by an expert third party. Measurement and reporting should focus on the KPIs and cadence that suit the brand’s objectives. They should be performed leveraging recognized industry resources and methodologies.

The ANA/MASB study notes: “It is now time for the industry to take a stand on sponsorship accountability.”

Sponsorship spending in the U.S. was more than $24 billion in 2018, per ESB Properties. It is time for marketers to develop the necessary processes and partnerships to full capitalize upon and demonstrate return in this substantial investment.