Men are from Mars; Women are from Venus. The term could just as easily be applied to marketing and finance professionals. One speaks a language of awareness, consideration and advocacy, and the other talks of compounded annual growth rates and EBITDA. For marketing and finance to agree on sponsorship impact, we must find some common ground. That common ground is brand value.

What is brand value?

Brand value calculates your brand’s contribution to generating revenue for the organisation.

It starts with an assessment of brand strength, the results of which are used to determine a brand royalty rate. The stronger the brand, the higher the royalty rate. For example, we expect to pay more for a t-shirt with the Ferrari logo than one with the Skoda logo. At this point, most of our marketing readers are still with us when talking of brand strength scorecards and royalty rates. Now for the bridge.

The determined royalty rate of each brand is applied to the forecasted revenues of the company. For example, if the company is predicted to turnover £500 million for the next five years and the brand-specific royalty rate is 1%, the brand revenue would be £5 million. Now for the finance bit.

That £5 million of future brand revenue is not money in the bank; it is subject to economic risk. We need to apply an appropriate discount rate to understand the present-day value of that future revenue. Discount rates assess the point at which your money is worth more today than in the future. Would you rather have £1 million today or £5 million in five years? After discounting our £5 million of future brand revenues, the figure we arrive at is a present-day value called brand value.

How does sponsorship impact brand value?

Sponsorship impacts traditional marketing measures such as awareness, familiarity, preference, and consideration. When calculating brand strength, these same measures are used alongside broader company metrics such as trademark protection, the share of voice, employee rating, and environmental and governance scores.

The uplift in these measures brought about by sponsorship increases the organisation’s overall brand strength. This has a knock-on effect on the royalty rate and, ultimately, the brand value. Using this methodology, marketers can demonstrate improvements in their traditional measures while highlighting the uplift in the overall brand and business value.

Measuring changes in Rakuten’s brand value resulting from sponsorship

Rakuten signed a four-year agreement to sponsor FC Barcelona for an estimated 220 million euros. Brand valuation firm Brand Finance tracked the impact of the sponsorship on key brand metrics using the above methodology. This research recorded a positive uplift in measures such as consideration.

When these uplifts were applied to the brand valuation methodology outlined, the result was an 8% increase in Rakuten’s brand value from €4.3bn to €4.7bn.

The process of evaluating sponsorship by conducting a brand valuation is not an easy one. However, marketing decisions, particularly sponsorship investment, are under greater scrutiny than ever. Presenting uplifts in awareness or media value equivalency won’t cut it in the boardroom anymore. So, before requesting sponsorship funds, consider putting some financial evidence in your corner; the results might surprise you. Here's why you must consider Market research and use this methodology to calculate ROI.

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Social media breathes life into your sponsorships. So why is it so often an afterthought for brands engaging in partnerships? This article highlights six techniques to supercharge your social media sponsorship strategy and get those creative juices flowing.

1 Behind-the-scenes content

To make the most of a partnership, sponsors must contribute to the fan’s enjoyment of the event. Fly-on-the-wall documentaries like Amazon Prime’s All or Nothing or Netflix’s Drive to Survive have shown a massive demand for behind-the-scenes content. Sponsors are uniquely positioned to share similar content on their channels.

This doesn’t have to be a full-scale production. It could be a video clip of the artist preparing to walk on stage at your sponsored concert. This is unique content fans would not otherwise see, so it engages a passionate audience.

2 Ride the rollercoaster of emotion

Social media offers brands the chance to show a human side. Sponsorship allows brands to supercharge this relatable characteristic.

What were your thoughts on the game? What was your favourite song of the night? How did you feel when she missed that shot in the last minute? These conversations occur amongst the fans, and your social post should be of that.

For the brand to be relatable and engaging amongst the fan base, it’s essential to speak from the heart. Share the good times, and don’t hide when the chips are down.

3 Competitions, prizes and more

Running competitions and giving prizes have long been an effective way to engage fans and spectators. Many brands, however, continue only to offer these benefits to existing customers through their websites.

Social media opens these competitions to an ocean of highly engaged audiences, many of whom may be interacting with your brand for the first time.

4 Get the fans involved

Another common mistake is asking fans to enter a competition by filling in a form of some sort. This may help increase visits to the sponsor’s website and create new business leads. However, to enter a competition, why not ask fans to upload and share their own images directly to social media while tagging your brand in the process?

This technique results in higher levels of engagement and creates more brand impressions amongst a fan’s personal following.

5 Reach out to new audiences

One of the most common reasons for engaging in sponsorship is to reach new audiences. Certain audience demographics, such as Gen Z, are more challenging to reach than others. Sponsorship gives brands a genuine reason to connect with hard-to-reach audiences. Social media provides a powerful platform to do so.

Another way to reach elusive audiences is with a brand ambassador; if this is a route you are considering, check out our Brand ambassador checklist.

6 Create a direct link to sales

Traditional sponsorships utilising perimeter boards are great for increasing brand awareness. They also can significantly impact the various forms of memory amongst fans. See our article here: Have you forgotten about memory?

However, the likelihood of attending an event, seeing a perimeter board, and visiting the sponsor’s website is slim. Social media sponsorship posts provide an easier journey taking fans directly from a post to the point of purchase via a link.

The most impactful campaigns involve new content shared exclusively by your brand to a highly targeted audience. Taking the time to create and plan such a campaign can be a low-cost method to supercharge your sponsorship.

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