One easy way to get a sense of whether or not the sponsorship will generate a positive ROI is to translate its cost to the number of extra units you need to sell in order to recoup the investment.
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Not too sure if this short term vision regarding sponsorship is realistic. Promotions are more adequate for those types of endeavors. Sponsorship is more about the intangibles and the precious and complex capacity of seduction but not short term sales.
George, the idea that sponsorships only should impact the long term, brand building, equity is true but not enough. Great sponsorships also drive short term results. I have plenty of examples where we achieve both. It's all about how much you pay, what you buy, how you activate it. Promotions can play a similar role but without the borrowed equity of a partner. If you do it right with sponsorships, you will get both short and long term results. Thanks for commenting.
And then there is that awkward but essential consumer research to understand if the property is improving your brand equity or if the brand is actually benefitting the property.
This is always the very unwelcome analysis.
This is always the very unwelcome analysis.
@Tim, if you can standardize this gain in equity to incremental future purchase over time, it can still use units as the currency. We've done this with some success and modelling to translate metrics into units for RO. It takes standardization and lots of case studies to narrow your range-thats where IMI's database comes in...
The salient point here Ricardo, that some comments above recognise but many (and I suspect most that follow) ignore...is that the metric that defines success is up to you, the sponsor, not the rights holder. The world has changed and the templated ROI model that proliferated for so long (media value, consideration metrics etc) no longer takes account of what success might look like to the buyer.
If volume sales are what you measure success by, then you’re right to do so.
Rights holders need that clarity so they can build programmes focused on delivering against it.
If volume sales are what you measure success by, then you’re right to do so.
Rights holders need that clarity so they can build programmes focused on delivering against it.
Great post Ricardo Fort. It's definitely critical to quantify the tangible value delivered in terms of retail activity, sales lift YOY, and how it sustains in growing the category and/or HH penetration. I think it's also important to capture other value as well - media exposure, integration, impact factor (active or passive), transference (aka association), sentiment, etc., to ensure a holistic picture of return. This often seems to be overlooked by brands but it's absolutely achievable.
The brand with Wings has achieved amazing sales basically with sponsorship, similar as it was for long periods with Coke both promotions ( even tastings) and sponsorship, I fully understand the trend to measure everything but maybe some emotional decisions are challenging to place under a number... When we say “Bring me a coke” is it decided by our brain? Our heart? Or a mix of both? Interesting debate....
Well said Ricardo Fort. ROI and related sales lift is foundational metric all partnerships should deliver beyond baselines for fansumer engagement via media and brand integrated assets. We look forward to the day where properties also receive bonuses based on exceeding ROI to related sales, engagement and purpose-based initiatives! :-) roicalculator scoreboard impactinvesting
I absolutely agree with you Ricardo Fort . Sometimes I look to the brands that sponsor major sporting events or teams and I question if their decision was based on ROI or emotional reasons.
Are you really selling 10 million extra units to pay that bill?
Ask yourself if this goal is achievable when compared to your recent performance. You will be surprised by some of your own decisions.