In the first of a three-part Knowledge series on sponsorship, Sue Fertal Toomey from
The Economist Group, Asia-Pacific addresses the need to measure sponsorship ROI, and how organisers can turn sponsors into an invaluable extension of the marketing team.
Once upon a time, there lived a sponsorship world where companies handed over hefty sponsorship fees in return for seeing their brand in lights and the privilege of entertaining clients in a private booth. With few exceptions, such as Hong Kong’s Rugby Sevens, these days are long gone. This is good news overall for the sponsorship industry, now viewed as an integral part of marketing campaigns. It demonstrates a maturity for an industry once marred by a reputation of being less “strategic” than traditional marketing, due in some part to sponsorship decisions being made based on personal preferences and connections of company leaders.
Today, sponsorship decisions are based on a variety of reasons—most often linked to an ability to meet specific marketing objectives, such as increasing brand awareness, customer retention, capturing new leads, creating a brand experience or generating product trial. Potential sponsors demand much more than a logo and tickets—they are looking for audiences to genuinely engage with their brand in a more meaningful way. Return on investment (ROI) is discussed throughout the sales process with sponsorship decision-makers seeking return value in multiples of their spend.
DO AS I SAY, NOT AS I DO
As budgets tighten—and they always do—marketers increasingly find the need to justify their expenditure. A survey conducted by International Events Group in 2013 asked marketing leaders in the US how their company’s need for validated sponsorship results had changed over the past two years. An overwhelming 87 percent reported an increase in their companies’ needs. When the same question was asked two years earlier, 78 percent showed an increase. The trend is going up.
Interestingly, when these same marketers were asked what percentage of their sponsorship budget they spent on measuring return, 72 percent said they spent between zero and 1 percent. Even the bulk of those companies allocating budget to measuring results only spend between 1-5 percent. It seems there is a real disconnect between what marketers are saying their companies need and what they are doing to get that information.
TAKING THE ROI HIGH ROAD
At first glance, it seems logical that marketers (or their agencies) would be responsible for measuring ROI on sponsorship. After all, they are best positioned to have insight on objectives set out for the company and any resulting outcomes from the sponsorship. But to stop here would be short-sighted for event organisers, who can play a critical role in engaging marketers to think more strategically about ROI throughout the life of the sponsorship and beyond.
A good place to start is with defining the sponsor’s objectives. Savvy sponsors know this upfront and can clearly outline realistic goals. But often it’s not so straight forward. A less experienced marketer may place unrealistic goals on sponsorship (such as “increase sales by 70 percent”) or not invest enough in activation of their sponsorship to maximise results. The sponsorship fee may be coming from multiple departments within an organisation, whose goals are not aligned. If the public relations budget is funding the sponsorship, the priorities will likely focus around media coverage—versus if the check is signed by a business development leader, then meeting new prospects or entertaining clients will take priority.
Getting in front of this discussion at the outset is key. Determining measurable and realistic objectives will help set up the sponsorship for success. Once the objectives are clear, it’s important to implement a measurement plan so that opportunities are not missed along the way. This could include surveying the audience on their views toward a particular sponsor pre- and post-event, measuring sponsor mentions in associated media coverage, tallying numbers of business cards collected, one-on-one meetings held, or following up to track sales conversions. This requires close consultation with the sponsor so it helps to have this plan outlined in advance.
With tangible results—demonstrating a “move of the needle”—renewal conversations take on a different tone. Often event organisers focus their feedback on the quality of the event, experience for the audience and how smoothly it all ran. That’s important but it doesn’t tell sponsors what they want and need to hear about how the event met specific objectives. It also discounts the months of activity that led up to the event itself and likely the post-event activation that continued.
As companies’ need for validated sponsorship results increases, event organisers have a unique opportunity to move away from being a vendor with a product to sponsor to providing an invaluable service as an extension of the marketing team. Now that’s a role worth playing.
This article is part of a three-part Knowledge series focused on delivering sponsorship value. Subsequent articles will address ways of finding the ROI sweet spot and sponsorship’s value lens – when saying no may actually mean yes.
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