How does a brand measure sponsorship success? Enter return on investment (ROI). Recent insights from Nielsen have confirmed that “sports activations are doing more than boosting brand awareness — they’re leading to higher conversion rates.” (In fact, a whopping 81% of folks said they trust brand sponsorships in sporting events!) That being said, the importance of knowing which sponsorships are leading to the highest ROI based on a brand’s individual goals is key. Given there are a variety of benefits to sponsorships in sport, knowing how to accurately measure success with the many variables at play is essential to accurately determining your ROI.
Measuring Sponsorship Success
Typical metrics that are most commonly shared and reported on sponsorship are around awareness and consideration. Many times this is done through brand trackers, fan surveys or on-site/in-venue research. Brands will often identify awareness and consideration as their key performance indicators (KPIs) of a partnership – yes, because they are important, but also because they are the only numbers consistently reported. However, these metrics aren’t always indicative of the sponsorship’s success since they can’t always be attributed to the partnership.
For example, your brand has just gone through a major campaign overhaul and, consequently, you are spending a lot more on media, making major investments in social and digital, and using your partnerships to roll out additional experiential. You see your awareness spike as a result, but how much of that lift is really coming from the partnership? And even further, how does that awareness influence a consumer’s purchase or decision-making behavior?
rEvolution’s Proven-ROI Model
Rather than take sponsorship performance metrics in isolation, brands can create a model that can give them a more realistic understanding of not only the money generated due to the sponsorship, but how that ties back to what the brand is spending on the sponsorship fee.
rEvolution has gone through empirical testing with its proven-ROI model based and established on the following assumptions: consumers have to be in the brand’s target market and be aware of the sponsorship for there to be return.
Sponsorship ROI in Practice
To give some context, let’s say there’s a sports event of 10,000 people, and you are a potato chip manufacturer sponsoring the game. Of those 10,000 fans, only 6,000 of them eat or purchase potato chips. Now, of those 6,000 chip eaters in attendance, only 2,000 are aware of your brand’s presence. These are the only people who can be influenced by your sponsorship. From there, how does brand share vary from fans aware of your sponsorship to those who aren’t? This difference can show the incremental sales of chips – layer in the profits generated, divide by the rights fee – and now the ROI can be assessed.
Brands can combat the uncertainty of sponsorship ROI by exploring existing methodologies (like rEvolution’s!) and recognize the need to make a measurement investment, in addition to the rights and activation fees of sponsorship programs. Learn more about how rEvolution can help your brand navigate sponsorship in sport.