Sponsorship ROI: Game-day or data-driven decision?
I write this article from the comfort of my living room, enjoying game one of the first-round playoffs for the Toronto Maple Leafs. Perhaps it’s my passion for marketing, but I can’t help but tune into each brand opportunity, from TikTok’s logo on the helmets and Canadian Tire on the ice to Molson Coors towels and Scotiabank on the boards.
Logos are everywhere in sports. Sure, it’s always been cool to be the official Hot Dog of the Toronto Blue Jays, or the Ultimate Teammates (aka PB&J sandwich) of the Raptors, but let’s be real: All marketing investments in 2022, including sponsorship, need to prove their worth to senior management by way of measurable returns. Sponsorship budgets face increased scrutiny as marketing budgets are challenged by inflationary pressures, continued supply chain disruptions and the great balance of short-term conversion versus long-term brand building.
The pressure to lock in sports placements is also hotter than ever. NCAA placements were cited to sell out at record speed, while Superbowl LVI ads sold out seven months ahead of the event. Bill C-218 has paved the path for more types of gambling to be allowed and Ontario is the first to launch its legal regulated market, sparking a whole new industry buying ads tied to sponsorship content1.
Aside from the clout, brands invest in sponsorships because they deliver on reach. They also have a strong potential to deliver on both upper-funnel awareness and consideration and on lower-funnel short-term conversion. As Steve Muscat from Active International notes in a recent Sponsorship Council blog post, “when planned and aligned carefully, [sponsorships] can supercharge branding, reach and resonance with consumers.”
Sports sponsorship especially has the ability to deliver live reach. According to ThinkTV, 86 per cent of linear viewing by Canadians is live (December 2021). Sports are the second top reason Canadians consume live linear TV, behind news and ahead of live events and appointment viewing.
Canadians also acknowledge they pay attention to brands and logos. From a question I posted on Facebook, my network consistently indicated that sports sponsorships have an impact on brand perceptions and purchase intent.
- “Yes, I pay attention and they influence my taste in merchandise.”
- “I think we watch the ads more carefully as we don’t get to see them on many streaming services; it’s a bit of a novelty.”
- “As for sponsors, no one does it better than Formula 1 Racing. Logos on everything. Talk about being supported.”
- “As for ads…. well, the geeky me looks at the ads to see who’s paying the big bucks for what placement. [It] makes me then realize who’s now relevant and how times have changed.”
- “I think sport events do a great job especially when they engage the fans with an experience or incentive. When McDonald’s offers free fries when [the] Raptors score x points. It makes the fans keep thinking about the brand well after the game… brilliant.”
If you are reading this and are still skeptical of sponsorship, consider this line, “Stuff…we love stuff”. Can you finish this sentence and identify the brand?
Sponsorship investments are not just for consumer brands, and they don’t only include sports placements. The opportunity for all brands to execute purposeful marketing via sponsorships is ripe for the taking. Mark Greenspan, co-founder of influenceTHIS, weighs in:
“In my 16+ years of designing B2B sponsorship programs for the media and advertising sectors, I’ve never seen more opportunity to deliver value. There is a sea change happening in terms of B2B sponsorship programs right now. The ’spray and pray’ days where audience size is the main KPI is finally disappearing. Smart B2B programs are moving away from the 'sage on the stage' to 'the guide on the side approach'. This is more in tune with the consultative selling approach that B2B companies are adopting as well as the pent-up demand for professionals to be connected to one another and grow their professional networks. We saw the lockdowns that came with COVID as an opportunity to design smaller more impactful events which focus on curating participants while creating meaningful connections for all involved. The more intimate events make it easier to track key lower-funnel metrics like the amount of business generated from the event.”
Sponsorship is a hot investment, but it can no longer survive on gut instinct. Like its counterparts in the marketing calendar, sponsorship needs to prove its worth to senior management. The best approach is arming yourself with data including a measured total ROI.
- First, start with defining the primary KPIs of the investment. Is the goal to drive awareness and consideration, brand favourability, product trial, site/location traffic, or sales conversion?
- The KPI should set the primary measurement. Leverage brand and communications tracker studies (via primary survey research) to observe lifts in awareness and consideration tied to the sponsorship investment.
- Combine equity data with sales conversion analytics via marketing mix modeling (MMM) to isolate the financial returns in both the short and long term.
- Marketing research is best to begin ahead of sponsorship in the market, however, there is also an opportunity for mid-event and post-event analytics to provide you with the KPIs you need to defend your sponsorship budget.