How to Measure Sponsorship Effectiveness?

[Scott Spain]

This isn't something I'm fixin' to do. I'm just curious...

Let's say a company decides to sponsor a race car (NASCAR). How do they measure their ROI on that sponsorship?

[Philip Moore]

Hi Scott,

There is a syndicated survey from VNU called Scarborough that piggy backs on the Arbitron radio ratings surveys. They send paper diaries to about a quarter million households each year and end up with local market data for about 70 of the biggest DMAs in the US.

The diaries include questions about events attended and programs watched along with all of the regular demographic information and a lot of the socio-demographic cluster ID's as well. So, the way I measure the ROI of sponsorhips is two fold. First, I track the growth in attendance or viewership of the event/sport/team/etc among my target audience. The target audience definition can be my local market, hh income, age, PRISM cluster, competing product usage or any combination thereof. Second, I track the growth in attendance or viewership among those using my product or service. This assumes that my business is one of those included in the diary, which is a condition of the subscription license.

If you don't have Scarborough or a similar resource, then you are faced with building a tracking mechanism into the sponsorship like a dedicated landing page. So if you're the VP of Marketing for Scotty the Hotty Hair Gel and you're going to sponsor the Cleveland Men's Choir then you would have a special URL in the Playbill. Most just ad a subpage like http://www.scottythehotty.com/mensinging, but I'm not a fan. This will probably underestimate the impact of the sponsorship because most consumers are aware of how URLs work and many would not bother typing in the subdirectory specification. It is probably a little more expensive depending on your host server, but I prefer to use different domain specs like http://mensinging.scottythehotty.com/. If you use this format, you can be sure that everyone going there is coming from the sponsorhip or a sponsorship-related referral.

[Scott Spain]

Good info. Thanks.

Originally Posted by Philip Moore

Hi Scott,

If you don't have Scarborough or a similar resource, then you are faced with building a tracking mechanism into the sponsorship like a dedicated landing page. So if you're the VP of Marketing for Scotty the Hotty Hair Gel and you're going to sponsor the Cleveland Men's Choir then you would have a special URL in the Playbill. Most just ad a subpage like http://www.scottythehotty.com/mensinging, but I'm not a fan. This will probably underestimate the impact of the sponsorship because most consumers are aware of how URLs work and many would not bother typing in the subdirectory specification. It is probably a little more expensive depending on your host server, but I prefer to use different domain specs like http://mensinging.scottythehotty.com/. If you use this format, you can be sure that everyone going there is coming from the sponsorhip or a sponsorship-related referral.

Just curious... Why not pony up the $8 for a new domain for this type of testing?

[dotdash]

In addition to event advertising (like the Playbill example), some companies will have a physical presence at an event they sponsor in order to collect leads (drawings, contests, etc). These leads are tracked, and the ROI would be based on number of leads generated or on sales made to the prospects.

[Philip Moore]

Originally Posted by Scott Spain

Just curious... Why not pony up the $8 for a new domain for this type of testing?

No reason except that it might be tough to find an available domain that would be equally as memorable or applicable as your primary domain.

[Brad Stoppenhagen]

The first question that needs to be answered is what the marketing objective of the sponsorship is.

Examples:
Is it to increase brand awareness and purchase interest among a targeted set of viewers?
Is it to drive store displays and product sales through promotional tie-ins?
Is it used to generate leads/sales by bring local customers/accounts to the track on race day (like B to B)?
Or is it that the CEO likes NASCAR and whatever he says goes?

Depending on what your marketing objective is, you would develop an appropriate measure of success along with success criteria. This could be sales, contacts, leads, display activity or the CEO's mood. Once this is defined, determine the appropriate instrument to measure such as survey, secondary or syndicated data, transactional data, special contact info (URL, 800#), coupons/rebate, number of smiles from the CEO, etc.

[Scott Spain]

The reason I ask...

I was listening to a NASCAR show on Sirius satellite radio. They were talking about Nextel/Sprint's investment in the sport. This was in the heat of the squabble between Nextel/Sprint and AT&T/Cingular about, who's able to put what logo on a car.

Nextel claimed that they knew exactly how much they earned as a result of sponsoring NASCAR's Nextel Cup Series.

I find this very hard to believe.

[Philip Moore]

My guess is that they asked new subscribers what influenced them to choose Sprint/Nextel and NASCAR was one of the choices.

[Brad Stoppenhagen]

"Exact" would be a hard measure.

They could be using a brand tracking survey which would measure awareness of the campaign and purchase behavior. Another possibility would be media mix modeling work to try and decipher how much of their sales are due to the NASCAR sponsorship.

I have also seen Nascar/race teams try to promote the number of media exposures as a measure. This is similar to PR measure tactics. Some nut essentially watches the race and tracks the time that a given car is featured on air and multiplies that by some cost. This is supposed to represent what you would have to pay the TV company for the same amount of airtime. It's a pretty lame measure.

Other possiblities:
- Number of track side signups
- Promotion codes
- Store promotion tie-ins (example have a racecar in front of the Cingular or Sprint store) and measure lift against stores without

[Scott Spain]

The more I read, the more I believe in my initial hunch that Nextel can't even get close to an "exact" figure.

To be clear, they don't sponsor a car. They sponsor the entire series. The former "Winston Cup Series" is now the "Nextel Cup Series". Their name gets mentioned constantly during the races (30-something of them), in print ads, TV guides, TiVo displays, on sports talk radio shows, SportsCenter, etc. There is no way they can really track all that accurately, imo.

[Philip Moore]

I concur, tracking the impact of each of these individual channels and their interaction effects is impossible. However, you can bet the sports marketing director at Nextel has an ROI number attached to their sponsorship that s/he uses to justify the contract and that ROI number exceeds what the sponsorship costs.

[Sherman Whipple]

Philip, I think you got this one right. Years ago one of my clients sponsored an annual charity golf tourney and posed a similar question to me, asking for a specific measure of return.

When I started to go into an explanation of how difficult it was to put a number on such areas as goodwill, he cut me off and said: "I don't need a survey, just make something up that I can take to my board of directors."

Sherman

Originally Posted by Philip Moore

I concur, tracking the impact of each of these individual channels and their interaction effects is impossible. However, you can bet the sports marketing director at Nextel has an ROI number attached to their sponsorship that s/he uses to justify the contract and that ROI number exceeds what the sponsorship costs.

[onawire]

So, would you then say that perhaps sponsorship isn't a particularly smart route for a small business trying to get their brand out into the marketplace? Considering the limited budget of a new small business, it doesn't strike me that this is a beneficial action to take. Any thoughts or arguments?

- Cynthia

[Sherman Whipple]

Originally Posted by onawire

So, would you then say that perhaps sponsorship isn't a particularly smart route for a small business trying to get their brand out into the marketplace? Considering the limited budget of a new small business, it doesn't strike me that this is a beneficial action to take. Any thoughts or arguments?

- Cynthia

No, what we are saying that it is almost impossible to measure the ROI, not that it does not exist, or that in some cases, can be hugely successful. Depending on the business and nature of the sponsorship, it could be an ideal marketing approach.

Champion sparkplugs and Firestone tires a naturals for race cars but where do Viagra and UPS fit in? I guess Viagra might give you a little stiffer ride...

[dataman]

One of the greatest benefits large companies see in sports sponsorship (specifically in NASCAR and Golf) is the event itself. Companies like UPS use the events to bring in large customers and prospects as thank-yous, etc.

To reiterate what people are saying here, exact measurement is impossible, although many people try. For auto racing there are several "reports" that do measure air time and mentions and fix a dollar sign to those views and mentions, but it is pretty weak. Although, the reports are expensive and sell well.

I have seen small businesses do well in sports marketing within smaller circuits (i.e. regional auto racing, minor league baseball, etc.). Again, it is usually using the sponsorship as event marketing in conjunction with the "advertising".

I would be floored if Sprint/Nextel could actually provide a single number for the business they receive from the sponsorship. I'm pretty sure anyone on this forum could poke holes in the number in a matter of minutes.

[redmanti]

It is certainly possible to measure sponsorship effectiveness if you start with understanding the theory of sponsorship and consumer behaviour in the first place. If you go around counting logos or treat sponsorship the same way as you measure advertising then you don't measure sponsorship.

If you measure NASCAR sponsorship effectiveness by counting logo impressions or brand recall then you really miss the whole point of what makes sponsorship so impactful. PASSION. People are very passionate about their racing team or sports team etc...measurement of sponsorship must measure the passion component.

The main components of sponsorship measurement are:

- Recall
- Passion
- Sponsor Appreciation
- Brand shift

Pre and Posts are needed as well to demonstrate before and after impact.

We have been measuring sponsorship effectiveness in over 15 international markets with a quantitative consumer research tool called SponsorMap. www.sponsormap.com

In the sponsorship industry the logo counting method is often used as it is a way for industry sponsorship sales agents to sell their sports properties for the highest price. Unfortunately, counting logos has nothing to do with sponsorship ROI as it is a measure of outputs not inputs.

Most market research agencies use consumer research where they compare aware vs. unaware of sponsorship results and do not measure passion or sponsor appreciation.

[Becker]

I'm sorry redmanti -- but I don't really get it. The logic for 'passion' seems an awful lot like good ole brand affinity - only trademarked. Obviously if i'm a die-hard nascar fan I've got passion for my sport, but how's that any different from someone that loves his dog? I don't necessarily have an affinity for all pet products?

My biggest question would be how your method works across the rest of the marketing mix? While I'll agree assigning mentions, logo views, or similar isn't ideal. The effort is to ultimatley assign impressions so that the sponsorship can be viewed in relation to the rest of the mix.

[redmanti]

We use Passion + Sponsor Appreciation.

Logo impressions don't tell you whether anyone can recall the sponsorship. For big well known brands with high awareness doing sponsorship just for logo impressions does not make sense. Eg., most people know Coca-Cola and a brand obviously needs more reason for Olympic sponsorship than increasing awareness from 99.9% to 100%. They would be better off paying someone to find the 0.1% that don't know Coca-Cola.

Sponsorship activation works at different levels. Some sponsors just put logos, others provide sponsorship activation at point of purchase on limited edition packaging. Other ways are to provide preferential seating for card members at events. These are the variables of sponsorship activation.

Different people respond to sponsorships depending on two things. Firstly, are they passionate about the property (eg., Manchester United in Asia). If you are passionate about the property you are the first to notice and respond the sponsorship. If you don't care about football or Manchester United you are unlikely to notice or respond.

The other variable is Sponsor Appreciation (Balance Theory). If a sponsor provides you a preferential seat or memorable event experience then most people will change the opinion to be more favourable to the sponsor. That is what corporate hospitality is about, creating an imbalance in relationships.

Different sponsorships work in different ways, some are heavily driven by passion and others driven by sponsor appreciation. Cause marketing has sponsor appreciation feature more strongly.

To your last question about the rest of the marketing mix to determine the relative value of sponsorship against others. Logo counting is about measuring what you are theoretically spending (output). It values logos more highly than a unique event experience.

Experiential marketing (eg. sponsorship) should not use logos to count the ROI of the experience. Better to measure changes in attitudes or behaviour.

[redmanti]

Originally Posted by onawire

So, would you then say that perhaps sponsorship isn't a particularly smart route for a small business trying to get their brand out into the marketplace? Considering the limited budget of a new small business, it doesn't strike me that this is a beneficial action to take. Any thoughts or arguments?

- Cynthia

Depends on how it is done. It can be extremely effective if it is done well. Many small businesses sponsor local sporting teams or communities and this can be very effective in obtaining a desired outcome. Don't discount the strong value of word-of-mouth recommendation that is often a key marketing outcome from such smaller events.

[BladeRunner04]

I work with a man who lives, eats, breaths, and sleeps NASCAR. He does not buy only Goodyear tires, He does not have Sprint or Nextel phone service, and does not shop at any given harware store because of the car their sticker may be on. But I guarantee that you can ask him anything about NASCAR and he will tell you the make of the car, the owner, the crew chief and maybe even the driver's favorite beverage.
How does this consumer play into the ROI factor?