the elusive measurement dilemma of sports sponsorship roi
TRANSCRIPT
The Elusive Measurement Dilemma
of Sports Sponsorship ROI
Is there a Better Way?
The Dilemma With High Stakes
• For many companies, sponsorship marketing represents a major element of their marketing mix. – Significant licensing fees to have one’s brand name
attached to a stadium, or for
– The right to be designated the “official sponsor of……”, in addition to
– Branded advertising of events and sports tournaments.
• Sports marketing is big business.– Global sponsorship spending is projected to grow nearly
5% in 2016 to $60.2 billion (Media Agency Daily, 1/14/16).
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The Dilemma with High Stakes
• For sponsorship marketing, successful efforts to measure the complete financial returns to sponsorships are rare. – The “gold -standard” for “measuring ROI, marketing-mix models, have
woefully fallen short in accurately and holistically measuring the return-on-investment to these activities.
– Marketers have relied more on indirect approaches. These metrics include measures of media exposure generated, social media comments, brand awareness, awareness of brand’s sponsorship, attitudes towards the brand, and lead generation.
• Despite the high stakes & investment in sponsorship marketing, sponsors are often at a loss in coming up with a viable means for measuring the ROI of these investments. – A recent study by the Performance Research/IEG found that 40 percent
of sponsors spend less than 1 percent of their sponsorship budgets on all of their sponsorship metrics, while more than a quarter of them spend nothing at all. This might well be a reflection of their frustration and disappointment in current measurement approaches. According to another recent study by the Association for for National Advertisers (ANA) about 40% of sponsors are dissatisfied with their company’s ability to measure sponsorship and event ROI.
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Where Next?
“Sponsorships will get obliterated if it measures
awareness and eyeballs, because those are the
wrong, wrong measures in today’s age.
Sponsorships are all about emotion, yet most of
them are still sold rationally. If I were a sponsor
property now, I would be investing my money
into new techniques that attempt to measure
emotional connectivity and predict involvement”.
-Kevin Roberts
CEO Saatchi & Saatchi Worldwide
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A Solution to the Dilemma• Key objectives of sponsorship marketing
– link brands to the passion and engagement that fans feel
towards the sports or events.
• This emotional component has made sponsorship ROI
measurement difficult & elusive.
• Relegated sponsors to only measure aggregate awareness or
recall.
• Falls very short of tangible and financially-based ROI metrics.
• Introducing a new concept that brings great promise towards actual
ROI measurement for sponsorships.
– This approach actually uses social media as the raw material for
building a more effective and predictive metric.
• Converts textual reviews (from social media or other similar
textual sources) into a metric called the Semantic
Engagement Index or SEItm.
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A Solution to the Dilemma
– Along comes a Different approach that uses a
linguistics-based method for “scoring textual
data”. • Based on the idea that it is not just words that matter, but also the
way customers communicate feelings about sports & events.
– This method maximizes getting the context right
• Text scoring algorithm recognizes & accounts for different levels of
emotion (for example, “like” has a lower rating than “love”).
• When personal pronouns are used or ownership is inferred (“My
Coca-Cola” instead of “a Coca-Cola”) there is a higher score
conferred due to a higher level of expressed personal engagement.
– By applying these principles to social media comments on the sport
and brand, we should be able to arrive at a metric that scales customer
engagement towards this sponsored sport or event.
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A Solution to the Dilemma• The task is to use the SEItm as an input into a marketing-mix model
– Driving toward the full benefit and value measurement of sponsorship ROI.
– Makes sense because this SEItm has proven to link to and be highly correlated to brand sales across a number of different businesses, as shown below.
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Correlations to Retail Sales
Sponsorship ROI Case StudyCase Study
• A client case using this sponsorship ROI method was a major B-to-B
services organization.
• Their marketing was unique in that 60% of every marketing dollar spent
went towards 4 sports sponsorships, including (1) PGA Golf, (2) NASCAR,
(3) NFL Football & (4) NCAA March Madness Basketball. We will call this
company Alpha Corporation.
• Alpha’s major objective was to come up with a better approach to
measuring their substantial marketing investment and the ROI of these
individual sponsorships. – Facing a rather stagnant 2% year-over-year growth in their total business,
– Alpha was keenly interested in understanding how to better allocate their future marketing
dollars towards their most productive sponsorships and marketing activities in order to
recharge their business growth to a higher level of performance.
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Sponsorship ROI Case StudyCase Study
• As shown below, our marketing mix model was able to demonstrate that
these four sponsorship activities generated incremental sales equal to 13%
of total revenue
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Sponsorship ROI Case StudyCase Study
• The main impact of our modeling efforts, pointed towards a
recommendation of how Alpha should invest its marketing funds going
forward. The chart below illustrates this.
• Our task was to isolate the sponsorship events with the highest ROI and
which were most effective in driving enterprise growth. As shown above
NFL Football was most effective in driving growth; while NCAA Basketball
generated the highest net returns.
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Sponsorship ROI Case StudyA Better Way?
• The following year, Alpha substantially expanded its NFL investment and
maintained a high level of spend behind NCAA Basketball; while cutting
back spending on NASCAR. The good news is that growth accelerated
from 2 to 6 percent the following year.
• After a number of years doing media mix models, and encountering a key
short-coming of conventional approaches to measuring sponsorship ROI, I
am very encouraged that a viable and effective solution appears to have
been discovered.
• Using the SEItm as a data input makes a lot of sense because it measures
customer engagement both with the sport and sponsor brand. This is close
to uncovering and objectively measuring the “passion” that fans feel toward
a sport or event. Given the nature of what brands are trying to achieve with
their sponsorship dollars, (i.e. connect their brand to the passion that fans
feel toward the sport or event), I am very encouraged that this could be the
solution that closes the gap. 11
Masood Akhtar
Managing Partner, EMEA
Bottom Line Analytics
M: +44 7970 789 663
Skype: Masood.Akhtar97
www.bottomlineanalytics.com
Michael Wolfe
CEO
Bottom Line Analytics
M: 678.314.8446
Skype: metricsman2010
www.bottomlineanalytics.com
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