On both sides of the buying table, people who do not fully understand the intrinsic value of corporate sponsorship are charged with buying and selling. Sellers who are unclear about value suffer poor results, low revenue, and the constant anxiety that the dollars will go away. The marketplace speaks.
On the buying side, some brands have inadvertently turned their investment decisions over to advisers or are being judged internally by individuals who may be evaluating sponsorship with faulty thinking. Often these advisors are at ad agencies and use the quantitative metrics of advertising media buying against the qualitative value of sponsorship — the equivalent of gleaning quantifiable data from the experience of taking in a piece of art or music. The internal evaluator may have the mindset and espouse it literally that if it can’t be measured it doesn’t happen.
Who’s Evaluating the Evaluators?
If you manage a brand and have outsourced sponsorship decisions or are distrusting your instincts and experience for fear of your CFO, minimally you may be missing out on great opportunities. Worse, your marketing platform in general may be subject to ineffective measurement, inefficiencies, and strategies that actually do not support the broader brand and corporate strategy. The ironic twist is that you may think your behaviors are insulating you from poor decisions, but actually you’re simply exposing yourself to more risk. You, ultimately, are accountable for the potential poor results.
What to Design and Measure in Sponsorship
Measuring marketing in general and sponsorship in particular is about outcomes not inputs. Yes, of course, the inputs or tactics matter as long as they add up to the achievement of objectives.
You know the stimuli that trigger buying decisions for your products and services. You know what client or customer interactions, media, and messages support all phases of the buying process. Evaluate the opportunity in those terms — will the opportunity, as proposed, contribute to the marketing outcomes you need to achieve?
Then you need to fully maximize it so your corporation derives the most mileage from it. Your partner provides a platform for results to happen. Your job is to enable and make the sales, enhance the relationships, or change the perceptions (or whatever your objectives are and drive your results. (This is why great partners are key, by the way.)
What matters in sponsorship is
- Reaching the decision makers and influencers for your product or service,
- Having ample opportunity to engage with them, per the outcomes you seek to achieve,
- Adding to the meaningful experience of the event, and
- Engaging your own customers and audiences.
The rest is gravy.
When Evaluation Goes Wrong
Here’s how it looks when evaluation is meaningless. A client of mine had been in a circuitous conversation with a team of measurement-centric buyers from an ad agency for the last couple months. They’d submitted a well-written, strategic, and thoughtful proposal with three high-value, on-target options meeting the automotive buyers’ stated objectives. Their key goal was to get “butts in seats”; they wanted attendees of my client’s event to sit in — but oddly not test drive — their vehicles.
Besides the opportunity for thousands of people to sit in these cars and interact in other ways at the event, the company would be included in all the promotional, social media, and paid advertising efforts.
This is no small thing.
You see, the event is an environmental event, attracts the car company’s target audience to a tee and is produced by the most trusted environmental organization in the region where they’re based. In fact, you could say that this partnership is a bit of a stretch for the environmental organization because the car company’s output is incongruent with the environmental organization’s mission.
And that’s what makes this partnership so powerful and appealing.
Imagine a pairing between this automotive company’s line of environmental vehicles with this leading environmental organization at the biggest environmental event in one of the largest U.S. metropolitan markets that attracts upscale, professional, environmentally-conscious consumers. Pretty perfect fit, right?
Well the automotive company’s buyers blew it.
They’d ascribed random dollar amounts to each of the benefits included in the option they preferred, line-by-line. Then they told the environmental organization that the opportunity is really worth about 25% of the fee assigned for that option.
Imagine showing up at your local Apple store with a list of all the pieces and parts in a MacBook Pro with random dollar amounts that you just made up beside each and expecting to leave with a laptop at one-quarter of the price.
Imagine your company not factoring into its pricing strategy intellectual capital, customer service, R&D, design, value, sustainability advances, overhead, brand equity, and profitability, among other variables?
As you can imagine, things went south from there between my client and this automotive company.
Outcomes not Inputs
The reason sponsorship is so valuable is because of the intangible, qualitative value it offers the sponsor. This auto company’s buyers failed miserably at recognizing that value.
Let’s say you own an authorized dealership of this automotive brand. What is it worth to you to:
- Sell one car (OK, this first one is easy and likely does have a quantifiable value).
- Educate one prospective buyer — really change that person’s conception of your product.
- Decrease your sales team’s selling cycle by jump-starting the eventgoers’ buying processes.
- If your prospect approaches you with questions — as opposed to avoiding you at all costs.
- If your sales team is surrounded by prospective buyers — instead of empty cars in a lot.
- If your brand repute is elevated because of the alignment with a leading environmental organization willing to stick its neck out and say, “Heck yeah! These cars are as environmentally sound as they come.”
- If your sales rep has an opportunity that couldn’t have happened otherwise to have a real conversation, face-to-face, heart-to-heart, and build a connection and maybe even a relationship with a prospective buyer.
- If a prospective buyer sits in your car, smelling that new car smell, and smiles knowing that she can justify her need for a car with her commitment for lowering her environmental impact while she’s on the earth.
Can you put a dollar figure on all that? No. Is it valuable? Absolutely!
Where to Focus
If you or your representative do not understand how to evaluate and make sponsorship investments, how to put the full value of sponsorship to work for your brand, and how to determine what to measure, educate yourself first. Learn what business outcomes you can reasonably focus on through the sponsorship medium.
Start with a strategy and develop a strong plan to leverage your investments. Have realistic expectations and both quantitative and qualitative metrics.
Apple doesn’t put a bunch of junk in its computer and call it a laptop. There are design, architecture and manufacturing processes at work. The sum of the total tangible and intangible value leads to Apple’s pricing strategy. Same with sponsorship value.
Excellent sponsorship sellers develop recommendations with strong value to meet your stated business goals. Solid proposals should be filled with value – not a bunch of random pieces and parts – that lead to the outcomes you want to see. The fee represents the sum of the tangible and intangible value that will contribute to accomplishing your business objectives. It’s a perfectly fair and reasonable way to develop a fee structure.
Work with your sponsorship seller to understand the proposal and the value it represents. Get involved and co-create the opportunity. Have your media buyers stick with buying media.
And sponsorship sellers, don’t be bullied by these types of sponsorship representatives. There are lots of great corporate partners out there. You’re better off finding a great one and working with the true decision maker.