There are two widely held yet opposing myths about sponsorship measurement.
One is that sponsorship isn’t measurable.
The second is that effective sponsorship measurement should provide a single data point output; i.e., for every dollar I spend on a sponsorship (in rights fees and activation spend), I should receive some multiple of a dollar in sponsorship ‘ROI’.
Sponsorship is very measurable.
Not as a single data point, sponsorship measurement winds up being a set of outcomes best represented on a dashboard.
We call this a lily pad model.
The outcomes are interrelated, but not always correlated (i.e., a change in brand favourability and a change in employee pride can both be measurable outcomes from sponsorship, but one doesn’t beget the other).
Measure what matters.
First, it’s important to measure what matters. What matters to an airline, a bank, a packaged goods company or an automotive brand are all going to be different, even if they are all sponsors of the same property.
For example, one of the elements of a sponsorship activation that a packaged goods brand might want to measure is the sales lift from packaging that includes property IP/marks versus packaging that doesn’t include marks. An automotive company might want to measure the impact on purchase intent with fans of a sponsored property versus non-fans in the same market.
Outputs vs. Outcomes
Outputs are intermediary measures. These include media impressions, digital/social engagement, consumer interactions, attendance, and so on.
Outcomes are the measurable impact of a sponsorship and its activation on your brand and business results. Outcomes include changes in brand equity, changes in relationships (consumers/customers/distributors) and sales.
Outputs lead to outcomes, but if you stop measuring with the outputs, you’ll fail to understand the real impact of a sponsorship on your brand and business.
A 2017 survey conducted by Performance Research for IEG suggests that 14% of sponsorship decision makers don’t know what the return on investment of their sponsorship investments are. But the same survey found that 31% of decision makers don’t spend anything on understanding sponsorship return on investment.
It is highly likely that these same decision makers are only considering outputs rather than outcomes.
Because sponsorships can address multiple business and brand objectives that lead to numerous attitudinal and behavioural outcomes, sponsorship measurement can be complex, expensive and time-consuming.
Two Approaches
1. Your big bets
Large multi-year sponsorship investments, where annual rights fee spend is at or above USD $6MM, warrant the time and investment to measure every impact from the sponsorship. This could include measurement around brand health, employee engagement, social/digital engagement and trade channel activity.
The depth of this kind of measurement will help validate your activation and validate the performance of the sponsorship against the objectives set for the properties in a portfolio with larger spends. That said, this level of measurement may not be needed every year for each property. Brands should consider this depth of measurement the year before the renewal year for a sponsorship to prove-out the investment.
2. A portfolio approach
For properties in a brand’s portfolio with less than USD $6MM annual rights fees spend (including ‘tier zero properties’: those you own, have built and that aren’t commercial sponsorships), Lumency recommends a portfolio approach to measurement: measuring different outcomes from different sponsored properties and then cascading the learnings across like properties by pillar, by size, by market, and in some cases, across all properties.
For example, if a brand sponsors several football clubs in the same country market or region, understanding brand health impact from two or three club sponsorships can be extrapolated across how the brand manages and activates all its football club sponsorships. Then, the following year, shift the brand health measurement across a different set of football clubs.
In another example, measuring the brand’s on-site engagement at a music festival can lead to better on-site engagements at all music festivals in the brand’s portfolio.
This is where the outcomes and outputs circle back.
Through a portfolio approach to sponsorship impact measurement you’ll understand what outputs lead to or optimize specific outcomes. This understanding will become clearer the more you’re measuring. Because you won’t be investing the time, energy and expense measuring all outcomes across your full portfolio, you’ll be able to focus on driving the outputs across your full sponsorship portfolio that you’ve validated drive the business and brand outcomes you want.
By: Ian Malcolm
