Has Octagon found the magic formula?

The sponsorship market has witnessed massive growth over the past few years and is now worth over &£19bn annually worldwide. But critics argue that the absence of an industry standard measurement system could curb its future expansion.

By comparison, the advertising industry devotes millions of pounds each year to evaluating its work and its trade body, the Institute of Practitioners in Advertising (IPA), runs the Advertising Effectiveness Awards.

Yet many claim it is much harder to assess the success of sponsorship compared with advertising, and headline-grabbing awareness figures often give a misleading picture.

Adrian Hitchen, executive director of research company SRi, says: “As a sector, we don’t do ourselves any favours. It is often the research companies themselves which promote the awareness figures.”

One research company executive adds: “It’s easy to tell whether an ad campaign has been effective. People either see the ad or they don’t.

“But with a sponsorship programme, people will often think they’ve seen it when they haven’t. In the Rugby World Cup, for instance, many consumers believed that Guinness was the title sponsor, which it wasn’t.”

Other brand owners have orchestrated highly effective guerrilla marketing campaigns. Nike’s advertising around the 1998 football World Cup, for example, hoodwinked many consumers into believing the brand was one of the 12 official sponsors.

Measuring sponsorship effectiveness is a major barrier for clients attempting to justify expenditure. Critics say the most popular methods – measuring volume of media output and brand awareness – are flawed because they do not measure efficiency. And as the price of sponsorship packages soars, so the need to qualify results becomes ever more crucial for the sector.

Last week, sponsorship group Octagon Marketing stoked up the debate by launching what it claims is the first measurement scheme to isolate and identify the true impact of sponsorship on brands (MW November 18).

The company revealed it has struck a deal with research specialist Millward Brown and evaluation consultancy Sponsorship Science to launch “The Sponsorship Effect”.

Alasdair Ritchie, president of Octagon Marketing for Europe, Africa, Australia and Asia, says: “A brief survey of clients I had worked with in advertising clearly indicated that the absence of any sound measurement system was preventing many from committing budgets to sponsorship. They considered it more of a whim than a serious marketing discipline.”

The methodology concentrates on three key areas: shifts in attitude, behaviour and media efficiency. It has evolved from Millward Brown and Sponsorship Science’s joint evaluation product, Insight.

Millward Brown director Peter Walshe says: “Our research is the industry standard for measuring advertising and brand effectiveness. This new system will separate out the effect of sponsorship. We believe we are leading the way – and others will follow.”

But not everyone is convinced. One observer says: “If Octagon believes this tool should be the industry standard, then it must put it up for public scrutiny. Otherwise, it will simply be seen as a sales tool to attract clients.”

Others question whether the scheme offers anything new. Barrie Gill, chairman of sponsorship agency CSS Stellar, says: “Everybody’s doing this already. All sponsorship companies have their own methods.

“Not many brand owners go into sponsorship these days without pre- and post-evaluation. Whether Octagon has got a magic formula, I don’t know.” However, he says: “At least it is adding to the debate.”

Kevin Stephens, chairman of the Institute of Sports Sponsorship, says: “I welcome any development which improves the performance and accountability of sponsorships. We know sports marketing is a powerful tool. The more we understand it and can prove its real worth, the better for all parties, both brand owners and rights owners.”

He adds: “I think this is a definite step forward for the industry as a whole.”

Hitchen says most companies have been using qualitative and quantitative data for years. “But,” he adds, “we would certainly welcome additional methods of measurement.”

Sean Jefferson, Octagon Marketing media director, comments: “Nobody is saying that there is only one way of measuring sponsorship. The IPA’s effectiveness awards are constantly being updated with new criteria, such as share price and so on. We are simply moving on the debate.”

Nigel Curry, director of the European Sponsorship Consultants Association, says that in an ideal world there would be one methodology for the whole industry, but that is impossible.

“Different companies offer different techniques for measuring sponsorship. Unsurprisingly, all will claim that their method is the most effective. Most brand owners go into sponsorship to achieve different goals. You can’t generalise – it’s like comparing apples with pears.”

Gill agrees: “I’ve been running sponsorship programmes for over 20 years and nearly every one has been done for a different reason – from boosting awareness and sales uplift to making people feel good about the company they work for.”

Most observers agree that this latest initiative will raise the profile of sponsorship evaluation, but a joint industry standard, backed by the sector’s trade bodies, still seems a long way off.