sponsorship ROI, measure sponsorship effectiveness, effective sponsorship, effective activation, AdoptoMedia, brand preference, return on objectives, sponsorship accountability

Brands invest billions of dollars in various events every year worldwide, but only few of them know how to measure the return they get. In this article we will see why calculating media equivalence is not enough and learn about other approaches to measuring the performance of sponsorship deals.

Sponsorships give brands unique opportunities for deep customer engagement and access to huge audiences, but like with other investments their impact should be evaluated to make sure the money is not wasted. Measuring sponsorship performance has been a serious challenge for CMOs; according to a research by MASB and ANA, 40% of marketers don’t even make attempts to do it, and 70% of companies don’t allocate enough money for the necessary market research and measurements. It happens because some brands are just starting to adopt the discipline of budgeting, or they don’t have a clear sponsorship strategy and need to manage a portfolio of deals with different objectives. Another issue is the lack of tools that can cope with the task. In this article we will cover key metrics to track and tools that can be used to quantify sponsorship impact. You just need to put aside enough funds; Forbes recommends assigning to measurements 1-2% of the sponsorship budget if its size is significant and no less than 5% for smaller ones. To make sure the money isn’t spent on activation or something else, measurement budget share should be clearly stated in the business case for sponsorship and protected as long as the deal lasts. When you allocate enough money to measurement, develop a clear strategy, create a business case and follow other recommendations on improving sponsorship accountability that we discussed in part 1 of the article, you are one step closer to knowing how effective your sponsorship is.

What can be measured?

There are a number of parameters a brand can evaluate depending on its objectives, resources and measurement maturity. The graph below shows three stages of sponsorship accountability maturity depending on what is measured.

sponsorship ROI, measure sponsorship effectiveness, effective sponsorship, AdoptoMedia, brand preference, return on objectives, sponsorship accountability, media equivalence, media value

Media equivalence or media value shows how many impressions are generated by the sponsored event and how much it would cost to achieve the same amount of impressions by investing in other media. In many companies this is the only aspect marketers are able to put on their reports on sponsorship effectiveness. Media value is the most commonly used metric because it’s the easiest one to measure. Brands can make the most of this simple approach by assigning different values to various media assets provided by the property depending on such factors as logo size or exclusivity. Keep in mind that media equivalency only reflects exposure, not impact, that’s why it should be used as a supplementary tool to understand whether an event is worth investing in. Today marketers are moving away from this approach to more advanced analytics. 

Return on Objectives (ROO) is a critical parameter according to MASB, which demonstrates if an activity leads to the desired objectives. It evaluates changes in consumer attitude and behaviour, by monitoring a number of metrics, the most important of which is brand preference because it has a high correlation with market share and price premiums. A study of 200 brands in different categories by MASB proved that brand preference has a stronger relationship to sales than other metrics examined. It’s a pretty universal measure that can be applied to campaigns with different objectives, unlike brand awareness, which is not fitting when an activity is targeted at old customers. Another advantage of  brand preference is that it ranks above other metrics and captures their impact on sales too, which makes it perfect for managing a portfolio of sponsorships. Also without knowing consumers’ attitude to sponsorship activities it’s impossible to optimize their performance.

Being able to measure ROI of sponsorships is the ultimate goal of marketers, but the task is challenging because other marketing activities running in parallel also contribute to sales. The hardest part is isolating financial output of sponsorship that aligns with the brand objectives. If your company has the necessary resources for conducting ROI measurement make sure to measure the return on all sponsorship spendings. It is even better if a brand can link ROI and ROO measures by identifying a relationship between financial results and customer attitude changes. And ideally, marketers should be able to balance a whole portfolio of deals in terms of reached audience and strategic objectives.

When to measure?

According to a research by ANA and MASB, marketers are most satisfied with measurements taken before and after a sponsored event, while measurements occurring during an event need to be improved. Anyway all three stages are important to ensure better understanding of results and optimization. The best approach is to align the measurement process with the sponsorship strategy.

How to measure?

Information about media equivalence is usually provided by the property, but brands at higher levels of sponsorship accountability maturity use the services of third parties to verify and process data. There are no standard norms for assessing sponsorship ROI and ROO, that’s why companies have nothing to do but develop their own approaches and create benchmarks.

To evaluate ROO impact a research of test and control audiences is carried out. It’s also possible to use statistical models that identify the impact of a sponsored event on different brand metrics (consideration, emotional engagement, attitude). 

Another tool for measuring sponsorship ROI is Marketing Mix Modelling, which has already proven its reliability and accuracy. AdoptoMedia offers marketers an advanced MMM tool with elements of AI that can optimize your media mix, run ‘what if’ scenarios and measure ROI of your marketing investments. By using media value as model factors it’s possible to calculate the financial impact of sponsorships.

If you are now deciding whom to entrust with the measurement task: the sponsored property, your agency or the in-house marketing team, we have some hard facts for you. ANA and MSB research proves that hiring an independent third-party vendor that reports directly to the sponsor is the best practice. This option guarantees unbiased and verified results, so sponsors don’t need to worry about transparency of processes and measurements.Try adoptomedia to get a comprehensive view into the effectiveness of all your marketing investments, optimize your media spends and drive ROMI.