Every year at The Sponsor, we conduct a survey of our audience of brand and marketing leaders to ascertain what they look for in a sponsorship opportunity. The research highlights the most common factors that need to be present for brands to maximise their return on investment. The survey reveals the evolving priorities and insights on what truly defines a perfect sponsorship partner.

The perfect sponsorship partner is not merely about having a broad reach or an impeccable reputation. It’s a multi-faceted relationship that blends visibility with value alignment, audience engagement and a mutual commitment to making a positive impact.

Reputation 

Unsurprisingly, all sponsors identified the size and reach of the team or event’s audience as paramount. For some brands, particularly in the FMCG industries, this was their first, second, and third consideration when judging a new sponsorship opportunity. However, a significant portion of the respondents, particularly those from the finance and B2B sectors, identified values-based alignment as the primary area of examination.

Within these values-based alignments, responses predominantly considered a partner’s history, examining past successes and achievements. When was the team or event founded? How successful has the team or event been during its history? How does this help communicate our own heritage and trust?

Being seen as the leader or go-to provider in the market was a common theme for many sponsors. Consequently, a significant number of respondents consider a partner's perceived quality as a key criterion. What is the team or event’s current performance and reputation for success in modern times?

For tech brands in particular, infrastructure and how up to date the team or event’s physical and digital facilities are were important evaluation areas. Several luxury brands highlighted this measure by placing importance on association with best-in-class service. The final reputational brand characteristic considered by most sponsors was cultural relevance. How does the team or event behave off the pitch, and what action are they taking towards societal issues? This was particularly true of respondents from FMCG brands from the fashion and retail industry.

Audience

Despite the need for strong brand alignment between two partners, increased brand exposure remained paramount to almost all sponsors surveyed. Indeed, the single greatest benefit of sponsorship for most brands is supercharged brand awareness.

Beyond reach and exposure many individuals highlighted not only the number of eyeballs reached but whose eyeballs. One common theme was frustration with a lack of credible audience data around demographics, fan behaviour, and activity.

The results across demographics were diverse, highlighting each brand's different target audience groups, particularly concerning age demographics and affluence. However, a common thread that did emerge was the emphasis all brands place on gender ratios; even for sponsors operating in traditionally male-dominated sponsorship arenas, there was a very clear consideration of the female audience.

Social Contribution

An increasing number of sponsors identified social contributions and actions towards social challenges as important factors during the evaluation of potential partners. This theme was highlighted during the research, with 93% of respondents evaluating a team or event’s actions towards sustainability as part of their evaluation process.

85% of respondents also highlighted inclusion and equal support for female artists and athletes. These factors were followed by support for grassroots development and, most notably, support for the partner's associated community.

Experience

Collectively, across the board, the other consideration most sponsors highlighted was the extent to which clients and VIPs could be entertained through corporate hospitality. Large employers also highlighted the importance of volunteering and employee engagement within their partnership consideration and the responsiveness of those individuals charged with managing their partnership on a day-to-day basis.

Surprisingly, only a small number considered how their internal skills and know-how could help improve their partner’s offering. This is an important factor as it determines how a sponsor has helped improve an event for the fans or the wider community through their involvement. Those sponsors that demonstrate this are more likely to be perceived favourably by audiences, which impacts all those great measures of brand strength we track, like loyalty, advocacy and, most importantly, consumer behaviour, especially at the point of purchase.

While not all brands can find or afford a sponsor that ticks every one of these boxes, it is important to articulate what each brand’s perfect sponsorship partner looks like. Only then can we evaluate our hypothetical ideal sponsorship against real-world opportunities.

The post What makes a perfect sponsorship partner? appeared first on The Sponsor.

The Sponsor has published its annual fair market valuation of every Premier League club’s front-of-shirt and sleeve sponsorship assets. The results highlight that some brands are getting a great deal from their sponsorship while others are overpaying.

Fair market valuation in sponsorship refers to the income a team or event can reasonably expect to receive for its sponsorship on the open market without any existing associated party connections. Premier League fair market value (FMV) and Associated Party Transactions (APT) rules are in place to maintain the league's competitiveness by preventing clubs from inflating sponsorship deals with companies associated with their owners.

Manchester City launches unprecedented legal action over FMV rules

An unexpected development has rocked the Premier League as Manchester City announced unprecedented legal action against the league's FMV rules.

Today's FMV sponsorship figures published by The Sponsor highlight that Manchester City’s current deal with Etihad Airways is £2.6m more than its fair market value. If the value of the deal were to increase further, Manchester City would be in danger of breaking the Premier League rules.

“Manchester City’s sponsorship value is driven by its reputation for quality and cultural relevance, together with its huge brand reach. However, these traits are not exclusive to City. Both Manchester United and Liverpool score higher than City across many key aspects driving sponsorship strength, such as history, social reach, fan engagement, and community development.” - Sean Connell, Editor, The Sponsor

Manchester City’s current front-of-shirt sponsorship reported to be worth £67.5m is currently with one such associated party in Etihad Airways. However, the club also has a significant sleeve sponsorship arrangement with an non-associated partner in crypto exchange platform OKX highlighting the club's commercial power to command top prices above market rate.

Liverpool’s front-of-shirt is the most valuable sponsorship asset of any Premier League club with a valuation of £65.8m

Despite missing out on the Premier League title, Liverpool’s qualification for next season’s Champions League competition ensures the club and its sponsors, Standard Chartered, gain significant brand exposure next season.

“Liverpool’s value as a sponsorship asset is not limited to their on-field success and media exposure. Our research shows brands that partner with Liverpool benefit significantly from association with one of football’s most successful clubs. Furthermore, Liverpool is a culturally relevant football brand in terms of fan engagement, star power, and action towards social causes, something that sponsors place considerable value on.”

Gambling firm Betano overpays by £13.6m to secure sponsorship with Aston Villa before the ban

The 2024/25 season marks the last for front-of-shirt gambling partnerships in the Premiership. Despite the reputational damage associated with such arrangements, many clubs, including Villa and Forest, are choosing to take advantage of the increased income now. Gambling sponsors pay a premium for the extensive exposure provided by Premiership sponsorships. However, these clubs may face a significant financial gap during the 2025/26 season, as non-gambling brands are unlikely to match these high sponsorship payments.

Aston Villa's £40m sponsorship deal with Betano represents a £13.6m increase over the club’s fair market value of £26.4m. Similarly, Nottingham Forest’s £14m sponsorship deal with Kayun Sports is more than double the club’s fair market sponsorship value of £5.2m.

Sleeve Sponsorship

Sleeve sponsorship remains a grey area for both clubs and sponsors, with deals fluctuating considerably. The fair market value of sleeve sponsorships across the Premier League ranges from just shy of a million pounds per season to Liverpool, at the top end of the scale, with an annual value of £25m.

Manchester City’s sleeve sponsorship deal with crypto exchange OKX is the most lucrative in the Premier League, reported to be a staggering £55m, more than double its fair market value of £23m. The Premier League Champions represent the third-strongest sponsorship offering in the league. Unsurprisingly, they lead the pack when it comes to quality, but the club and its associated partners are also the most culturally relevant team underpinned by strong support for the women’s game. In fact, no club posts and promotes their women’s team more than Manchester City.

Manchester United lose £17.5m per year from Team Viewer deal

Manchester United is the biggest loser in terms of lost sponsorship value. The current deal with TeamViewer, reportedly worth £47m per year, is the most undervalued sponsorship in the league. Manchester United boasts the largest social reach of any club, with 173 million social followers and the highest levels of fan engagement across the Premier League, which are key considerations for sponsors. The fair market value of United’s sponsorship is just over £64m, indicating that the club is missing out on £17.5m of potential sponsorship revenue each year—a significant financial loss.

Leicester City back with a bang

Despite a brief spell in the Championship last season, Leicester City remains a strong sponsorship opportunity due to the club’s history and strong fan engagement scores. Typically, the sponsorship of newly promoted teams would be at the lower end of the spectrum, but Leicester has come straight back with a strong valuation of £11.2m, greater than that of Fulham, Crystal Palace, Brighton, Wolves, Brentford, Nottingham Forest, and Bournemouth.

Newcastle United’s sponsorship value falls after missing out on Europe

Manchester United’s unexpected FA Cup final victory has significantly impacted the value of Newcastle United’s sponsorship. The Magpies and their associated sponsors will receive considerably less brand exposure as the club will not feature in any European football next season.

Methodology

The Sponsor surveyed an audience of brand marketing executives from leading sponsors to ascertain the key qualities they look for when evaluating a sponsorship asset. The qualities are categorised into Reputation (history, quality, cultural relevance, infrastructure), Audience (reach, frequency, demographics, engagement) and Contribution (sustainability, community, development, fans). The categories are compiled into a weighted scorecard recognising the additional importance all sponsors place on brand reach.

Using this scorecard, our team measured the strength of every Premier League club’s sponsorship by drawing on wide range of data points. Metrics included but were not limited to: on-pitch performance, honours, star power, social following, digital presence, TV viewing, audience demographic, fan engagement, ticket pricing, ticket pricing changes, charitable donations, support of the women’s and grassroots game and more.

Our team used each club’s sponsorship score together with real-world sponsorship deals reported in the media to conduct a polynomial regression analysis to determine the true and fair value of each club’s sponsorship.

The research methodology takes a point-in-time valuation as of 23:59 on 27th May 2024 and does not seek to forecast or predict the future performance of teams as it relates to European qualification or relegation. Consequently, sponsors and clubs may place a higher or lower value on the sponsorship due to their own predictions of future performance. Unlike sponsors and clubs, The Sponsor is an independent valuer with no vested or commercial interest in the outcomes of this research.

The post Revealed: Premier League Fair Market Sponsorship Valuations 2024 appeared first on The Sponsor.

Cazoo, the online car retailer, entered administration yesterday after an aggressive and high-profile sponsorship strategy. The company's downfall highlights critical lessons for other brands considering similar approaches. Here’s a detailed look at why Cazoo's sponsorship strategy failed to yield the desired results and what other brands can learn from this expensive misstep.

While sponsorships can generate significant brand awareness, their true power lies in engaging audiences beyond mere visibility. Without meaningful activation and genuine connection to the audience's passions, sponsorships become an exorbitantly costly form of advertising that fails to influence consumer behaviour effectively. In Cazoo's case, the lack of engagement meant that their extensive sponsorship portfolio did little more than put their logo in front of millions without fostering the deeper relationships needed to drive brand loyalty and purchasing decisions.

The Ambitious Sponsorship Portfolio

Cazoo's sponsorship deals spanned multiple sports and countries, with an estimated total annual spend of approximately £36,500,000. The portfolio included:

• Football: Everton FC and Aston Villa FC in the Premier League, Real Sociedad and Valencia CF in LaLiga, SC Freiburg in the Bundesliga, and Lille OSC in Ligue 1.
• Snooker: Title sponsor of events such as the Cazoo Masters, Cazoo UK Championship, Cazoo British Open, and Cazoo Champion of Champions.
• Darts: Sponsorship of several Professional Darts Corporation (PDC) tournaments.
• Rugby: Partnerships with the Welsh Rugby Union and the 2021 Rugby League World Cup.
• Cricket: Sponsorship of The Hundred.
• Golf: European Tour.
• Horse Racing: Epsom Derby and St Leger Stakes.

Cazoo's goal was to rapidly increase brand visibility through these high-profile sponsorships. However, the sheer number of sponsorship deals meant that the company struggled to activate and engage audiences meaningfully.

The Downfall: Too Many Properties, Not Enough Engagement

While Cazoo’s sponsorships generated substantial brand awareness, they failed to achieve the deeper engagement necessary to bring about changes to consumer behaviour. The company spread itself too thin across too many properties, leading to several key issues:

Inadequate Activation: Effective sponsorships go beyond merely placing a logo on a shirt or a banner. They require active engagement strategies to connect with fans. Cazoo’s widespread sponsorships lacked the personalised activation efforts needed to make a lasting impression.

Lack of Consumer Connection: Simply being seen is not enough. Brands must connect with consumers on a personal level, aligning with their passions and enhancing their experiences. Cazoo's broad approach diluted its ability to foster these connections.

Failure to Change Consumer Behaviour: The ultimate goal of sponsorship is to influence consumer behaviour. Cazoo’s efforts did not translate into increased consumer trust or preference when buying a car, failing to justify the substantial marketing spend.

Lessons for Other Brands

Cazoo's experience underscores several important lessons for brands considering sponsorships:

Focus on Engagement, Not Just Awareness: Sponsorships should aim to engage audiences deeply. This involves interactive experiences, personalised content, and genuine contributions to fans’ passions.

Quality Over Quantity: It’s better to have a few well-aligned, well-activated sponsorships than many poorly executed ones. Concentrate efforts on key properties where the brand can make a significant impact and resonate with fans deeply.

Understand the Audience: Successful sponsorships resonate with the target audience’s interests and enhance their experience. Brands must invest in understanding what their audiences care about and find ways to add value.

Measure Impact: Continuously track the effectiveness of sponsorships in driving not just awareness but consumer behaviour. Adjusting strategies to maximise return on investment is critical when managing multiple sponsorship assets.

Cazoo’s ambitious sponsorship strategy, while impressive in scope, ultimately did not achieve its intended outcomes and contributed to the company’s financial difficulties. The key takeaway for brands is that sponsorships must go beyond mere visibility. Effective activation and genuine audience engagement are crucial for converting awareness into consumer loyalty and ultimately behavioural change. By focusing on these aspects, brands can ensure their sponsorship investments deliver meaningful and lasting benefits.

The post Why Cazoo’s big sponsorship bet failed and the lessons we can learn appeared first on The Sponsor.

Reaching high-net-worth and even ultra-high-net-worth audiences is not particularly hard, but engaging them is where it gets tricky. Hundreds of brands spend millions of dollars in sponsorship fees each year seeking to generate brand awareness amongst this valuable audience, but what is awareness without engagement?

These discerning consumers, with their keen intellect and deep concern for societal issues, demand an approach that transcends traditional sponsorship and resonates on a profound level.

In this article, we delve into innovative strategies for engaging high-net-worth audiences through sponsorship, exploring how brands can authentically align with their values and create unforgettable experiences that leave a lasting impact.

Demonstrating Shared Values

The first step in engaging high-net-worth audiences through sponsorship is by demonstrating an authentic commitment to shared values and passions. As Michel Driessen, Head of EY’s art sponsorship programme, aptly puts it:

"Art holds immense importance for both our society and our organisation, and it's equally valued by our clients. For us, it's not about displaying our logo at the biggest exhibitions. Instead, it's about reflecting and demonstrating our core values through the art we support. This unique approach enables us to establish meaningful connections with many of our clients in a context outside of work and the office. When asked what clients associate with EY beyond our audit and consulting services, our dedication to the arts always comes back top of mind."

Brands that support causes aligned with their audience's values foster stronger connections and long-term loyalty. This alignment demonstrates authenticity, builds trust, and taps into emotional resonance, leading to deeper bonds with clients differentiating themselves and driving sustained loyalty.

Exclusive Experiences

Another effective way to engage high-net-worth individuals through sponsorship is by providing them with unique experiences that money can't buy. Dr. Thomas Girst, Global Head of Cultural Engagement at BMW Group, highlights the success of BMW's Opera For All events, stating:

“BMW’s Opera For All events brings thousands of people together in major squares around the world to listen to extraordinary achievements that human beings are capable of. As part of this, we go for dinner with 50 of our Seven Series Excellence Club members together with the Chief Conductor of the London Symphony Orchestra and some of its musicians. This is a unique experience available only to our members and it helps build long-term loyalty with these highly valued clients.”

While anyone can buy a ticket with enough money, sponsorship allows brands to create truly unique, money-can't-buy experiences for valued clients. By leveraging their position as sponsors, brands curate experiences that resonate deeply, leaving lasting impressions and often lifelong memories. This is especially important for high-net-worth individuals who are accustomed to purchasing the most expensive tickets but value something more—unique experiences that money alone cannot procure. These exclusive opportunities foster strong bonds with clients, enhancing loyalty and affinity in ways that traditional transactions cannot achieve.

Audience Filtering

While value-based partnerships are essential for connecting with high-net-worth audiences, brands wishing to target this group at scale must find ways to filter the audience to target the right individuals. Sport sponsorship remains a popular choice for engaging this audience in large volume, but it remains a mass market event. Sponsors must therefore be willing to accept that a large proportion of the reached audience will never be customers and be able to pay a premium for exclusivity. Most crucially however, brands engaging in this form of sponsorship must work hard to activate their partnerships in a way that filters the general fanbase and specifically targets the desired audience.

Qatar Airways' sponsorship of Formula 1, for example, targets high earners through an exclusive partnership centred around the Paddock Club hospitality area, ensuring that their sponsorship efforts are geared specifically towards high-net-worth audiences. Luke Drake, VP of Commercial Partnerships at Qatar Airways, explains:

“Qatar Airways Formula 1 partnership includes being the presenting partner of the Paddock Club. It’s essential for us that everyone who comes into the Paddock Club has a great experience. We want to share the great experiences our business flyers have onboard with fans in the Paddock Club, giving them the best quality access, views of the track, and food and beverage. Our aim is to use our know-how and experience in service to keep moving the product quality up in Formula 1.”

Authenticity Is Key

Finally, authenticity is paramount when engaging high-net-worth audiences through sponsorship. This audience in particular is savvy and protective, and any attempts to plaster brands all over an event are likely to induce a negative reaction. When targeting HNWs brands must approach sponsorships with authenticity and genuineness, focusing on supporting and growing specific sports, art forms, or cultural events that resonate with their audience.

In conclusion, engaging high-net-worth audiences through sponsorship requires a delicate balance of aligning on values, providing unique experiences, and being authentic in actions. By filtering the right audience, aligning with shared values, and adopting a gentle approach, brands can create meaningful connections that drive long-term loyalty and success.

For those considering new sponsorships targeting high-net-worth-audiences The Sponsor has taken a look at 5 of the best events to consider here. You can also join The Sponsor and a small group of marketing leaders as we discuss best practice in the engagement of high-net-worth audiences at our upcoming roundtable debate on 25th June at the Sofitel St James, London, Register your interest here.

The post Engaging High-Net-Worth Audiences Through Sponsorship: A Delicate Balance of Values and Virtues appeared first on The Sponsor.

From FedEx Field to the T-Mobile Arena, 88% of sports stadiums in the US have a naming rights partner, while in Europe, that figure plunges to just 12%. In this article, we examine the reasons why brands have been reluctant to take advantage of the enormous benefits brought about by stadium sponsorship in Europe and consider the key characteristics of a successful naming rights partnership that doesn’t alienate fans.

Football has graced the grounds of St James' Park in the North East of England for nearly 150 years. However, when the club's previous owner, Mike Ashley, proposed renaming the stadium as the Sports Direct Arena after his own company, it ignited an immediate and widespread backlash from fans. While the intention behind the move was to attract future bids from other brands seeking to attach their name to the stadium, the reality was quite different. Instead, it served as a stark warning to potential suitors, highlighting the significant PR backlash they could face.

Despite the widespread acceptance of sponsorship in the US, with stadium naming rights and sponsor logos filling every corner, iconic venues like Madison Square Garden and Fenway Park stand as exceptions, untouched by corporate sponsorship. This demonstrates that even in a sponsorship-friendly environment, there are limits.

Fans have an unwavering respect for the tradition and history of their clubs, and brands should think carefully before handling such a prized possession.

Yet, despite the potential for negative fan sentiment, stadium naming rights sponsorship provides brands with a unique opportunity to not only generate significant exposure but also place their logo at the heart of a city’s community. One of Europe’s most prevalent stadium naming rights partners is German insurance brand Allianz which has attached its name to no less than four stadiums across mainland Europe. A statement on the company’s website reads:

“We invest in stadiums because we are committed to supporting local communities by helping develop central hubs for global industry and tourism in key regions worldwide."

Stadium naming rights deals in the US can span from $300,000 to $30 million, showcasing the immense financial appeal of such partnerships. Understandably, many European sports teams are eager to capitalise on this lucrative asset. However, it's crucial to recognise that the driving force behind the sponsorship value in numerous US deals stems from the frequency of events held in these stadiums and their proximity to competing venues.

For instance, a venue like the So-Fi Stadium in Los Angeles, boasting a naming rights sponsorship deal reported to be worth $504 million over twenty years, plays host to either a Rams or a Chargers game every few days, not to mention the occasional Taylor Swift concert. Furthermore, unlike cities in the UK, which often feature five or six teams from the same sport and division within a 30-mile radius, it's common in the US for a single city to have only one team and one stadium, with hundreds of miles separating them from another provider of similar sporting entertainment. This makes that piece of real estate the central hub of the entire city's sporting community.

As we delve into the patterns and value propositions of stadium sponsorship in both the US and Europe, it becomes clear that certain conditions must be present for stadium sponsorship to thrive. These conditions, together with the existing sponsorship requirements of brand alignment and reach, define the ideal environment for brand investment and serve as a framework for identifying successful stadium naming sponsorship opportunities.

1) Modern Stadiums

Stadiums with less historical significance may be more suitable for sponsorship as fans are less likely to have strong emotional ties to them.

2) Standalone Venue Advantage

Stadiums with limited nearby competition for attention may offer better visibility and exclusivity for sponsors as well as serving as central hubs for the community.

3) Densely populated Location

Stadiums located in densely populated metropolitan areas offer greater potential for reaching a larger audience and maximising brand exposure.

4) Frequency, Popularity and Diversity of Events

Stadiums that host a diverse range of popular events, such as sports games, concerts, and other entertainment, provide sponsors with multiple opportunities to engage with a wide audience and offer hospitality experiences.

Considering these factors, it appears that several current sporting venues in the UK, such as the London Stadium and the Tottenham Hotspur Stadium, which are both seeking naming rights partners, may not fully meet all these criteria. The fact that these sponsorship opportunities remain unsold could indicate a misalignment between the perceived value of the asset by the rights holders and that of potential brands.

This year, The Sponsor's dedicated Consulting team will once again assess the fair market value of every Premier League club's sponsorship, including, for the first time, front-of-shirt, sleeve, and stadium sponsorships. This research is an important tool for guiding potential sponsors as to the true value of such a partnership.

In summary, stadium naming rights sponsorship presents brands with a potent opportunity for significant exposure and community engagement. While the US leads in this arena, Europe's slower adoption may stem from factors like fan sentiment and historical significance. Nevertheless, successful partnerships like those of Allianz highlight the vast potential for brands to align with stadiums and communities. By pinpointing modern venues, standalone locations, densely populated areas, and diverse event calendars, brands can effectively harness stadium sponsorship to boost brand visibility and forge enduring community connections.

The post Decoding stadium sponsorship success: Four essential criteria for brands appeared first on The Sponsor.

Sponsorship serves as a potent tool for B2B brands, extending beyond mere brand awareness to enhance perceived stature, demonstrate core values, strengthen client relationships, inspire employees, and generate leads. While B2C brands can broadly target audiences based on demographics such as gender, age, and economic status, for B2B brands, the primary audience filter is job title.

Traditional sponsorships, often seen in cricket, rugby, and golf, are effective for large B2B brands with ample budgets targeting affluent audiences. However, for many B2B brands operating within tighter budget constraints, such an approach is inefficient, as it allows for wastage with the realisation that much of the reached audience may never become clients.

Consequently, many B2B brands find themselves limited to participating in industry conferences or awards, missing out on the benefits that sponsorship can bring. However, there exists an alternative approach.

For B2B brands aiming to target audiences by job title, a smaller partnership with a brand ambassador who authentically represents the company's values offers a compelling solution. Rather than relying on a sponsorship partner to generate widespread brand awareness, B2B brands can engage clients and enhance their perception by partnering with an ambassador who resonates with their values. This partnership can then be effectively communicated through existing channels, such as websites, social media platforms, or even email signatures.

While this approach requires additional research to identify the ideal partner, the results and value for money make it a worthwhile investment. By strategically leveraging brand ambassadors, B2B brands can achieve targeted sponsorship benefits at a fraction of the cost, ensuring that their messaging reaches the intended audience with precision and impact.

The post B2B Sponsorship Success: Harnessing Brand Ambassadors appeared first on The Sponsor.

Show me the money! The pressure on Marketing Directors to justify sponsorship investments is unrelenting. Summoned to the boardroom, clinging to the familiar crutch of media value equivalency (MVE) calculations, hoping to prove the worth of multimillion-dollar endeavours. Yet, beneath the surface of these seemingly concrete figures lies a gaping chasm of inadequacy.

MVE, the go-to metric for measuring sponsorship, offers a simplistic view of success: Did we get a good price? But the truth is far more complex. MVE fails to capture the intangible yet invaluable shifts in brand perception and consumer behaviour that truly drive revenue growth. As Marketing Directors are forced to defend their sponsorship decisions, they must continue to grapple with the fundamental question posed by Finance Directors that MVE fails to answer: How does this sponsorship actually generate revenue for the company?

In this article, we delve deep into the shortcomings of MVE in sponsorship measurement, uncovering why it falls short of providing a holistic understanding of sponsorship impact. From overlooking changes in brand perception to neglecting the CFO's demand for tangible revenue generation, we explore the inherent limitations of MVE and propose alternative approaches to accurately evaluate sponsorship ROI.

MVE is, without doubt, a helpful benchmark for assessing sponsorship strength. It is particularly useful for brands whose sponsorship campaigns place visibility as the first, second and third priority. However, as Solo Stove’s viral Snoop Dogg ‘Giving Up Smoke’ partnership showed, increased brand visibility does not automatically equal increased sales. Remarking on the partnership Solo Stove Chief Financial Officer Andrea Tarbox said:

“while our unique marketing campaign raised brand awareness of Solo Stove to an expanded and new audience of consumers, it did not lead to the sales lift that we had planned, which, combined with the increased marketing investments, negatively impacted our EBITDA.”

While, of course, this could simply be a case of over-forecasting, the point remains that increased awareness only tells half a story. The true value of sponsorship is the ability to alter and enhance stakeholder behaviour both in the short and long term.

What are the values that drive demand in the banking sector? Trust? Integrity? Security? All are true, and consumers' perceptions of such attributes can all be enhanced through sponsorship. Yet MVE overlooks increases in perception of these key brand values brought about by sponsorship. Consequently, when conducted in isolation, an MVE calculation serves to undermine and undervalue an effective sponsorship campaign's true worth.

In contrast to the limited scope of MVE, a more comprehensive and accurate measure of a sponsorship's worth lies in the market approach. This method considers a wide range of data points, including but certainly not limited to a comprehensive MVE calculation, to ascertain the strength of a sponsorship opportunity. The approach considers broader factors concerning the reputation, history, fan demographics, reach and social behaviour of a team or event. By applying these factors to the commercial realities of sponsorship deals agreed upon within the industry, the market approach offers a more holistic understanding of sponsorship's true value. This is also the approach used by The Sponsor in the annual study of Premier League Fair Market Value calculation which you can view here.

Unfortunately, this is all before we consider the fact that both MVE and the market approach fail to address the burning question raised by CFOs: How does this sponsorship generate revenue for the company?

For this, a more complex and rigorous valuation model is required: The income approach. The income approach is a methodology commonly used by tax authorities when valuing intangible asset transfers or CFOs when undergoing merger and acquisition transactions. Firstly, it assesses the fundamental role of the brand in generating revenue for the company within its respective industry. This involves analysing historical royalty rate agreements to determine the typical value of a brand's contribution to revenue generation. Secondly, the approach evaluates how changes in brand strength, facilitated by sponsorship investments, can enhance this revenue-generating capacity over time. By quantifying the impact of sponsorship on brand sentiment and consumer behaviour, the income approach establishes a direct link between sponsorship activities and their potential to boost revenue. Furthermore, unlike MVE, it speaks in a language familiar to the boardroom, which marketing proponents find particularly helpful when negotiating next year’s budget!

Each of these sponsorship measurement and valuation approaches has its own strengths and applicability depending on the specific needs and objectives of your sponsorship initiatives. For personalised guidance tailored to your unique requirements, we invite you to connect with The Sponsor's dedicated consulting team here. Schedule a complimentary consultation today to explore how we can assist you in accurately quantifying returns and justifying your sponsorship investment.

The post Justifying sponsorship returns: How media equivalency undervalues your sponsorship and exploring alternative measurement approaches appeared first on The Sponsor.

Many organisations unintentionally find themselves entangled in a web of diverse and often disjointed sponsorship commitments. This situation typically arises when brands succumb to various requests from employees and key customers or grant local branches autonomy in making sponsorship decisions. While these seemingly innocuous partnerships may appear harmless at first, they can lead to a range of challenges that undermine the brand's identity and strategic objectives.

Mixed Messaging: A Brand's Silent Nemesis

One of the primary pitfalls of diverse sponsorship initiatives is the emergence of mixed messaging. When a brand sponsors a multitude of unrelated causes or events, customers may struggle to decipher the core values and identity of the brand. This lack of clarity can dilute the brand's message and leave customers questioning what the brand truly stands for.

The slippery slope of valuable resources

Granting numerous small sponsorship requests can be a slippery slope, with each approval leading to a cascade of additional commitments. As these sponsorships multiply, the brand may find itself stretched thin, struggling to recall the extent of its sponsorship portfolio. The more sponsorships in play, the greater the demand on resources, both in terms of time and costs, to address the inevitable challenges that arise.

Budget control: A tangled web of costs

Small-scale sponsorships may seem inconspicuous, but their cumulative costs can add up rapidly. Brands may discover that a significant portion of their budget is tied up in these diverse sponsorships, yielding minimal growth for the business. Exit strategies become challenging, leaving marketers rueing missed opportunities to allocate budget where it could have a more substantial impact on brand growth.

The path to redemption: A unified sponsorship strategy

The solution  to this fragmented disjointed sponsorship portfolio lies in the development and implementation of a single, consistent sponsorship strategy that operates seamlessly at all levels.

1. Craft Ideal Sponsor Profile: Begin by meticulously defining the qualities of your ideal sponsorship partner. Consider factors such as shared values, target audience alignment, and resonance with your business objectives. This profile will serve as a benchmark for evaluating current and future partnerships.
2. Evaluate Existing Partnerships: Conduct a comprehensive assessment of your current sponsorship portfolio. Analyse each partnership in terms of how closely it aligns with the criteria set in your ideal sponsor profile. Simultaneously, evaluate the time, effort, and resources invested in each partnership.
3. Exit Misaligned Partnerships: Swiftly identify and exit partnerships that do not align with your ideal criteria. Prioritise those showing a significant misalignment, freeing up resources and reducing the potential negative impact on your brand's messaging and identity.
4. Enhance Alignment Through Activation: For partnerships with lower alignment that cannot be immediately terminated, develop strategic activation plans. Implement initiatives that align these partnerships more closely with your key values and objectives, maximising their impact within the defined criteria.
5. Articulate Ideal Profile Criteria: Clearly define the criteria derived from your ideal sponsor profile. These criteria should guide all future sponsorship decisions, ensuring a consistent and intentional approach to partnership selection.
6. Transition to Proactive Strategy: Move from a reactive stance of approving or rejecting incoming requests to a proactive approach. Actively seek out sponsorship opportunities that align with your established values, objectives, and target audience. This proactive shift allows you to curate a portfolio that strategically contributes to your brand's growth.

In conclusion, sponsors must carefully assess the impact of small-scale sponsorships on their overall brand image. Redirecting funds towards more strategic initiatives is essential. Investing in a cohesive sponsorship strategy helps brands avoid the pitfalls of mixed messaging, regain control over valuable resources, and strategically allocate budgets for maximum impact—ultimately fortifying brand identity and contributing meaningfully to growth and success.

The post From chaos to cohesion: Strategies to mend fragmented sponsorship and strengthen your brand identity appeared first on The Sponsor.

Image: M&C Saatchi Sport & Entertainment's new strategic collective, Passion Pulse

M&C Saatchi Sport & Entertainment commemorates two decades of creativity by introducing its groundbreaking 'Passion Pulse' offering. As part of this milestone, the agency boldly departs from the traditional fandom model, embracing the forward-thinking 'Fancom' approach to fan engagement.

Celebrating 20 Years with Passion Pulse

M&C Saatchi Sport & Entertainment marks its 20th anniversary with the introduction of 'Passion Pulse,' a transformative offering that redefines the dynamics of fan engagement. This strategic move underscores the agency's commitment to staying at the forefront of the industry by understanding and adapting to the evolving nature of consumer passions.

Fancom: A Paradigm Shift in Fan Engagement

In a departure from the conventional fandom model, M&C Saatchi introduces 'Fancom' to revolutionise the concept of fan communities. Fandom traditionally implies a mass, homogeneous following with a single attitude. Fancom, on the other hand, recognises the contemporary fan as a dynamic participant in coalescing communities centred around intersectional interests and behaviours.

Laura Coller, Managing Director, emphasises this shift, stating, "There has been a demonstrable move away from the tropes of traditional fandom towards what we call Fancom. Away from mass homogenised groups and towards communities coalescing around intersectional interests and behaviours."

Alongside the announcement the agency has also published a new report, 'Fandom is Dead. Welcome to Fancom' which you can access here.

Passion Pulse Leadership and Expert Team

Overseeing the Passion Pulse initiative is Strategy Partner Neil Hopkins, who leads a team of 12 experts. These experts, known as the Passion Pulse team, are strategic passion specialists with in-depth knowledge across sports, entertainment, and various sub-passions and communities. Their role is to decode the intricacies of fan communities, ensuring clients can authentically integrate with diverse passion spaces.

Coller comments on the team's significance, stating, "I’m proud to launch Passion Pulse, an expanded strategic offer comprising the brightest thinkers at the heart of sport and entertainment culture."

A Shift in Audience Needs and Behaviour

Recent research commissioned by the agency highlights a fundamental shift in audience needs and behaviour. The study reveals that 63% of people utilise their passions as a means to engage with others in real life, emphasising the importance of connecting consumers not just to brands but to each other through shared interests.

Emphasising the shift Coller stated, "This demands a shift in how we look at audience needs, and we believe there has been a demonstrable move away from the tropes of traditional fandom, towards what we call Fancom."

As M&C Saatchi Sport & Entertainment enters its third decade, the launch of Passion Pulse and the adoption of the Fancom model under the leadership of Managing Director Laura Coller position the agency as a visionary leader, continuing to forge authentic connections between brands and their audiences in the ever-evolving landscape of passion marketing.

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An estimated $105 billion was spent on sponsorship globally in 2023. The allocation of these significant budgets and the entities they support is entirely at the discretion of the purchasing brand. To quote the common proverb, ‘With great power comes great responsibility’.

At The Sponsor, we champion sponsorship as a force for good. We believe the best partnerships are those that not only provide a return to the sponsoring brand but also seek to make a positive contribution to the communities they impact.

Authenticity and engagement are the keys to a successful partnership. When brands go beyond advertising-based sponsorship and actively make a positive contribution, they are viewed more favourably by audiences, increasing audience propensity to sample, purchase intent, loyalty and advocacy. In simple terms, people buy things from people they like; this is as true of sales as it is for brands and sponsorship.

So how can brands use sponsorship as a force for good to authentically engage audiences and positively shift stakeholder perception?

Enhancing audience Experience

The first step for almost all brands moving beyond simple logo placement is to use their position as a sponsor to enhance the audience's enjoyment or experience of an event. This can be straightforward, like tech brands giving fans greater insights with real-time sports data analysis. There are simple examples outside the tech realm, such as behind-the-scenes content giving fans , free event transportation, or exclusive meet-and-greet experiences. Such activity ensures that exposed audiences are not only aware of the sponsoring brand but have developed an enhanced perception. Partnerships lacking this most basic form of activation are, in reality, nothing more than very expensive advertising.

Gender Equity

Women’s sports have seen tremendous growth in recent years, driven partly by the fantastic work of early adopters such as Barclays. The bank has not only been a long-term supporter of women’s professional game but has also contributed immense support for youth with gender equity through its Girls’ Football School Partnerships. The campaign has grown significantly in recent years and is now active in over 10,000 schools, with 85% of teachers agreeing that the campaign has positively impacted young girls' perception of football.

Earlier in the year, The Sponsor sat down with Rosie Guest, Chief Marketing Officer of Apex Group, and sponsors of Sail GP. The company had a pre-existing aim to improve gender equity across financial services, and this transfers through to its sponsorships. At present Sail GP has no female captains but Apex, working together with Sail GP, is seeking to use it’s position as a sponsor to change this.

“I firmly believe that when we empower women and provide them with the necessary tools, resources, and support, they can excel in any field, including the traditionally male-dominated sport of sailing. By breaking down gender barriers and fostering a culture of inclusivity, we can unleash the full potential of talented female sailors and create a more balanced and dynamic competitive landscape.”

You can read the full article here.

Actions speak louder than words, and such public action transcends written statements of inclusivity and diversity, demonstrating a genuine commitment that is not lost on stakeholders.

Supporting Youth Development

Brands can build positive associations by using their sponsorship budget to support youth development in a particular field. For example, Under Armour compliments its high-profile sponsorships with significant support and development of young talent, improving access to sports equipment for millions of teenagers. What impact does such an activation have on those young people, their friends and families when shopping in the local sports shop?

Similarly, many large financial brands are seeking to enhance perception through their support of young musicians and artists. American Express, for example, hosts the Amex Gold Unsigned, giving young, relatively unknown artists a powerful platform to showcase their talents, play at festivals and build a following. In the art world, American Express’ reputation is enhanced by such activity, not because they put their logo on it but because they make a meaningful and authentic contribution.

Sustainability

Perhaps the one topic that transcends all sports, cultural events and industries is sustainability. Sponsors can provide invaluable know-how to make events more sustainable; they can provide access to expensive tools and technology and use their immense purchasing power to only partner with events demonstrating a genuine commitment to sustainability.

For example, Formula 1 as a sport has come under increasing pressure from sponsors to cut emissions. This pressure has resulted in significant changes to the sport, including the introduction of sustainable fuels, resulting in up to 96% carbon emission reductions as part of its ambitious 2030 net zero pledge.

Sticking with Formula 1, The Sponsor spoke with Arjan Sissing, Global Head of Brand at DHL, to learn how the company is using its position as a sponsor to provide efficient, environmentally friendly logistics for Formula 1’s travelling circus of nearly 35,000 tonnes of racing freight each year.

DHL used Formula 1’s huge platform to build its own brand and raise awareness about sustainability amongst F1 fans.

“At the Brazilian Grand Prix, for example, we used our partnership to raise awareness of marine plastic pollution. We partnered with NGOs and 90 volunteers to collect over 500 kilos of waste. With the help of a local artist, we used this waste product to create a beautiful Formula 1 car sculpture at the track.”

These sustainable activations do not disappear into thin air, they resonate and resurface at key points in the consumer decision-making cycle.

Charity

The most philanthropic sponsorship activity brands can employ when seeking to use sponsorship as a force for good to enhance perception positively is to support charitable events such as Standard Life’s support for Cancer Research Race for Life.

Perhaps the most charitable sponsorship of all was BNY Mellon and Newton Investment Management’s sponsorship of the Oxford Cambridge Boat Race. Having secured the rights to the world’s most famous rowing race, the firm gifted the sponsorship and all its associated brand awareness to the event charity partner, Cancer Research UK. Such an act may indeed reduce BNY Mellon’s brand exposure, but to its existing clients and stakeholders, it undoubtedly increased loyalty and advocacy.

"We're not fussed about the actual coverage of our name this year – we're handing that over. This goes to the heart of businesses being responsible to society and connecting with communities. I feel very strongly that this is what it takes to be a modern and responsible business, we hope that others would then follow suit and we would see more companies thinking actually how could we use our sponsorships in different ways?"  Helena Morrisey, Former Chief Executive, Newton Asset Management.

Conclusions

When sponsorships are strategically harnessed for the greater good, they yield tangible benefits for the community and exert a transformative influence on brand reputation, leading to enduring financial returns that persist long after the partnership has drawn to a close.

By aligning corporate support with meaningful social initiatives, sponsors contribute to the community's welfare and forge a lasting connection with consumers who appreciate and remember the positive impact. This synergy between altruism and brand promotion creates a ripple effect, amplifying the resonance of the partnership and solidifying the brand's position as a socially responsible and ethical entity. Consequently, the dividends reaped extend far beyond the initial collaboration, establishing a legacy of goodwill that continues to shape the perception of the brand in the marketplace. continuing to deliver benefits long after the partnership concludes.

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