Sports have the potential to attract the attention of billions of people from different parts of the world all at the same time. To this end, many corporate organisations, brands and businesses try to tap into this interest by offering sponsorships to sports teams, entities and franchises that can attract many people. There are many groundbreaking sponsorship figures for many teams but do sports sponsorships really work?
This article highlights ways in which a company can measure if its sponsorships (merchandise sponsorship as well as regular advertising) really work.
Questions must be asked
Do companies get the traction they are really looking for? Does sponsoring jerseys, or training kits translate to getting more money due to the increased reach? Research shows that one in three companies don’t have metrics in place to measure sponsorship ROI (Return on Investment), pointing to the lack of a clear sponsorship strategy. A good sponsorship strategy should answer questions such as:
- Who is the target demography?
- What is the objective of the sponsorship?
- What stage of the consumer decision are we targeting? Is it awareness, consideration, purchase or loyalty?
Sponsorship tracking metrics
There are metrics that must be measured in order to have a sense of the right sponsorship strategy. These include but are not limited to the following:
Cost per reach
This is a very important metric that must be measured. Marketing executives must evaluate the number of people exposed to the sponsorship in person as well, as through other traditional media such as TV, print and radio – on a quarterly basis using data from the advertising agencies or from independent sources. For instance, the number of people that tune into a match that has a shirt sponsor can be tracked using data from the TV companies.
Margin/Sales per money spent
There are two approaches that can help link sales directly to sponsorships. The first, based on econometrics, uses data garnered (spending, reach and other variables) over an extended period of time to establish direct links between sales and sponsorships. Then there is the isolation of this impact of sponsorships from other sales and marketing activities.
The second approach is a two-step approach. It ties sponsorship spend to marketing metrics such as propensity to buy, willingness to consider, and unaided awareness. Afterwards, it tracks the impact of each of these variables on both short-term and long-term sales.
Unaided awareness per reach
Unaided awareness is important in measuring sponsorships. It refers to the percentage of people who are aware of your brand, product, or advertising without your input or assistance. This is where consistent ads come in, to keep the promoted product (or service) in the customers’ subconscious.
Sponsorships without activations don’t achieve the desired results. Therefore, activations must be done to turn respondents into paying customers.
Long term brand attributes
While many companies view sponsorships as a quick short-term fix, they can also be used in a long-term strategy to build brand identity. While sales account for between 60 to 80 percent of brand strength, sponsorships can help strengthen the identity for long-term growth.
A survey can be carried out to properly identify if brand attributes are properly aligned with each sponsorship opportunity. The results can then be used to determine which sponsorships are reinforcing a brand’s theme.
Many companies make the mistake of not effectively quantifying the impact of their sponsorship expenditure. This is bad practice because sponsorships have become a very important component of marketing strategy.
It is therefore imperative to analyze sponsorships with the aim of identifying those that create value and provide companies with a sizable return on investment (ROI).