Keeping an eye on the ball

The days when sponsorship was about bagging free tickets for the big match are long gone. Now the focus is on tangible rewards and return on investment. There is no room for losers. By Gemma Charles

It is a long time since sponsorship deals were made because brand owners fancied getting free tickets to their favourite rugby or football team, with a bit of hospitality thrown in for good measure.

Bearing in mind that during a period of slow economy marketing is often the first department to have its budget cut, companies need to know that investing in a sponsorship deal is going to reap tangible rewards. As a result companies are coming up with more sophisticated ways to measure sponsorship so marketers can justify their investments.

Sponsorship remains a popular way of getting exposure. Global sponsorship specialist IEG estimates that in 2003 &£25bn will be spent on sponsorship, with about 70 per cent of that on sport.

The focus on proving value works both ways. Rights holders looking to sell sponsorships have to prove to potential clients that they are a worthwhile investment. Trying to persuade a company to part with thousands or even millions of pounds is easier if you have some strong supporting evidence.

The Football Association drew in the last of the sponsors for its five-year multi-million FA Partners programme earlier this year. Every deal is different. For instance, McDonald’s focuses on community involvement while Pepsi’s emphasis is on youth.

FA marketing and communications director Paul Barber says he used the evaluation agency Sponsorship Science to segment football’s fan base and identify brands that were relevant to the different segments. Similarly Peter Draper, the marketing director of Manchester United Football Club, says that before he approached Budweiser – now one of the club’s sponsors – he researched the club’s fan base to prove to Budweiser that Manchester United was worth the long-term investment.

For those considering putting sponsorship into their marketing mix for the first time, all commentators agree that research is a must.

TNSSPORT marketing director Richard Ames says that brand owners must undertake some “due diligence” before entering a partnership.

“Evaluation prior to entering a contract can save money and benchmark a sponsorship for tracking purposes. Also, it is important to measure consumer understanding prior to the event in order to gauge the effects over time.”

Sports Marketing Surveys director Nigel Geach adds: “Any brand owner needs to carry out research that encompasses potential media, value, awareness, profile matching and suitability of the sponsorship. They must define their objectives so they will know whether they will be met when the research report is presented.”

Media exposed

For those brands that have already signed up to sponsorship deals, there are a range of methods to quantify them. The main way is to look at the media exposure: how many people are actually seeing their brand and for how long? It is one of the measures factored into most high-level sponsorship deals and still considered by most to be the reason for entering into sponsorship, as opposed to using sponsorship as a brand-building exercise. Another factor to measure is how a brand fits with the property and whether the fit would make people want to buy the product.

Margaux Matrix – a new player in the market – is testing an electronic tool, measuring the amount of time brand logos are being on television, which is expected to be in operation next year. It uses image-recognition software to pick up the brand image and record its on-air exposure. Margaux Matrix claims it will reduce human error and be able to measure moving and distorted images where a logo may be obscured.

Image recognition software is a hot topic at the moment, but Geach says it should be viewed with caution. “As yet no satisfactory system has been developed to overcome some of the intricacies of analysis. We will not adopt any system until we are satisfied with its accuracy.”

Sports Marketing Surveys, which has been in the business for nearly 20 years, uses a variety of techniques when measuring effectiveness sponsorship. For pure media value it has a formula which takes account of the amount of exposure on screen, the prominence and the clarity of that sponsor, which is then computed with actual audience figures and cost-per-thousand rates on the respective channels.

Many companies, including Sports Marketing Surveys, rely on traditional market research methods such as e-mail surveys, face-to-face and telephone interviews to measure brand awareness and recall.

Ian Thomas, one of the founders of Web analysis tool WebAbacus, says online marketing is a useful way of connecting with sports fans and finding out where sponsorship works. He claims sports fans spend more time online than non-sports fans, so are worth targeting through sponsorships in online campaigns.

He says: “Fans are a major target for companies sponsoring sporting events and Web analytics can help these companies discover the exact online impact and effectiveness of their campaigns. For instance O2, which sponsors Arsenal FC, could easily find out how many fans are getting through to its website from links relating to the club.

“It’s not rocket science, but is difficult to do in practice because of the volume of data involved and the way that websites and search engines are configured.”

SportZ is a new sports brand equity study continually updated and based on in-depth interviews with 21,000 sports fans in eight markets. It is a WPP Group initiative run in conjunction with a number of WPP companies such as Millward Brown and Hill & Knowlton and measures the personality and image of key sports, events, clubs and teams.

Alun James, the managing director of Hill & Knowlton’s sports marketing and sponsorship division, says findings from SportZ can be “integrated into existing research programmes and linked to more media-based approaches”.

Some companies, like TNSSPORT do the whole lot – media analysis and market research.

TNSSPORT’s clients include the FA Premier League, ATP, UEFA, Manchester United, Barclaycard, Heineken, and the British Horseracing Board. Apart from calculating sponsorship value using its image recognition system, Sportsi – created by Lucent Technologies Bell Labs – TNSSPORT covers recall, effect and fit. These, according to Ames, are the four main elements from a sponsor’s perspective.

He claims that his company’s methods can quantify the effect of sponsorship on sales: “Isolating the effects of sponsorship has been the greatest challenge for the industry, but now TNSSPORT uses consumer panels (Telecomtrak/Superpanel) to isolate consumers’ behaviour before, during and after a sponsorship.

“This process enables sponsors to understand the ROI [return on investment]. For example if a company invests &£2m in a sponsorship, TNSSPORT can demonstrate if it had any impact on the brand, hence the capability to measure ROI.”

Time to search for it

Research indicates that ROI is the part that marketers bother with least. A survey of nearly 200 executives in charge of sponsorship found that 78 per cent of companies do not have a budget dedicated to sponsorship research. However, 72 per cent reported they allocate either nothing or no more than one per cent of their sponsorship budget for research during or after the event.

The IEG study, conducted jointly with Performance Research, notes that companies tend to rely more on data from properties than third-party studies or their own research when evaluating opportunities.

But Sponsorship Science director Ian Thompson argues that ROI should not be expressed as a monetary value as “these figures are misleading and bear little relation to brand impact.” He believes most sponsorship research does not isolate the impact of sponsorship on the brand because it is focused on the event and not the brand. Also, he refers to “the use of the ‘black-box’ approach”, in which computer programmes aim at identifying sponsorship impact through a common approach.

However, “this approach does not and cannot take into account the multitude of sponsorship types, levels and variety of objectives which will be brand specific,” he adds.

But any debate over the true worth of sponsorship must start at the beginning of the process. The Works chief executive officer Ben Pincus comments: “More than 70 per cent of all sponsorship is wasted. A major reason for this is the way in which it is bought.”

“The major problem is that sponsorship sits outside marketing. It is treated separately and therefore receives neither the attention nor support that other media get. Sponsorship should not be seen as an end in its own right”

Sponsorship is a tool that can be used in order to create a catalytic bond between consumers and brands. A bond that can play the leading role in sales promotion, direct marketing or above-the-line activity.

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