SPORTS NEWS YOU CAN USE

Issue 13--Measuring Sponsorship

The last two issues of Sports News dealt with corporate sponsorship and objectives. This issue looks at ways companies measure sponsorship effectiveness.

In the past sponsors did little or no research to determine if event sponsorship was working.

Here are some quotes I collected a few years ago:

• "To be honest, we don't market-research any of our event promotions. We evaluate it from the gut, but that's an instinct that has been refined over 20 years." (Cathy L. Leiber, then director of promotion for Philip Morris) (1)
  
  
• "I can't show a cause and effect. I know from market research that our tennis program has enhanced and increased awareness of Volvo. But how that translates into more business is anybody's guess." (Bjorn Ahlstrom, then president and chief executive of Volvo North America) (2)
  
  
• "You can't tally up everything on Monday morning and ask if participation in a sports event was successful." (Steven Cross, then corporate event manager at AT&T) (3)
  
  
• "I have yet to see a scientific formula definitely showing sales results from a sports promotion. A lot of it is gut feel." (John Beck, then pro sports marketing manager at Miller Brewing) (4)
  
  
• "At this stage of our development, we don't have rhyme or reason to our sponsorships." (Carl Gilman, then vice president of sales and marketing at Snapple Natural Beverage Co.) (5)
  
  

Then, as sponsorships grew in popularity and became more expensive, sponsors began looking for ways to quantify event marketing value. One of the first techniques offered to them by several research companies involved tracking televised logo time.

Two examples:

• In 1995, Amway sponsored the European Figure Skating Championships. It spent $500,000 in sponsorship fees and expenses. International Management Group (the company that marketed sponsorships for the International Skating Union) tracked the number of times Amway was featured or mentioned on television. IMG estimated that Amway received $1.2 million in media coverage.
  
  
• Julius and Associates, an event research firm, determined that during the 1995 NASCAR Winston Cup season Valvoline received 13 hours, 41 minutes, and 39 seconds of exposure and 192 audio mentions as a result of its racing team sponsorship. To buy an equivalent amount of television advertising time, Valvoline would have paid more than $33.5 million.

But some marketing communication professionals have questioned the value of tracking logo displays. Although flashing a company's logo during an event might be cheaper than running advertising during the event, the two may not be interchangeable in terms of communication effectiveness.

Looking for a more sophisticated evaluation tool, some sponsors turned to firms conducting pre and post-event surveys (primarily used to assess consumer awareness or attitude change).

A variety of research techniques have been employed, including focus groups, on-site surveys, and follow-up phone interviews. The survey type chosen usually depends on how much the sponsor is willing to spend on research, how quickly it wants results, and whether it wants to reach event attendees or television viewers.

Most recently, sponsorship evaluation emphasis has shifted to sales results. "Frankly, if an event doesn't help us drive sales, it's not worth it for us to be involved," said Teddi Domann, manager of sports marketing at McDonald's Corp. (6)

Some sponsors have developed in-house methods to evaluate sales linked to sponsorship spending. For example, those sponsoring regional events may compare sales in a region WITH a sponsored event to sales in a region WITHOUT one.

Companies sponsoring national events may compare sales before, during, and after events. Or they might compare monthly or quarterly sales from year to year, noting which sales periods featured sponsorships and which did not.

Examples of sponsorships which have driven sales:

• In 1992, Visa, an Olympic sponsor, advertised that it would donate a percentage of each card transaction to the U.S. Olympic team. Transactions increased by 17%. Up until that point, Visa had never gotten more than a 3% increase from any advertising or promotional campaign it ran.
  
  
• NationsBank used its 1996 Olympic sponsorship not only to enhance its image, but also to generate new business. The number of new checking and savings accounts increased 20% over the year before. An Olympic-themed giveaway (which required opening a new account or applying for a loan) and other Olympic promotions were considered the primary reason for the change.
  
  
• A few years ago Country Time lemonade used its sponsorship of a NASCAR team as a promotional tie-in. A race-car simulator exhibit was taken to retail locations around the country. Each consumer who presented a Country Time label could try out the simulator. In the Southeast, where NASCAR is especially popular, product sales increased 66%.

Event research should help sponsors answer at least two sponsorship questions: Is sponsorship the best use of our marketing communication money and which events are the best ones for us to sponsor? According to Mike Goff, director of corporate sponsorship and event marketing at Sprint, "You can fall into a trap if you set objectives that aren't quantifiable. Every sponsorship is measurable. We don't believe that sponsorship is too intangible to measure." (7)

Gillette is an example of one company that has a system to evaluate event sponsorships. Here's what it does:

1. Establish a baseline for promotion. Estimate product sales without any promotion, then sales during a typical promotion, and then sales during a sponsorship-linked promotion.
   
   
2. Compare the share of off-shelf display and retailer advertising during a typical promotion to a sponsorship-linked promotion.
   
   
3. Determine financial efficiency by dividing the total cost of sponsorship by the total number of incremental units sold. This determines the promotional cost per incremental unit sold. Also divide the percentage of quarterly units moved by the percentage of quarterly promotional dollars spent. If the ratio is greater than one, "your event is moving incremental units at a faster pace than you're consuming promotional dollars. That's an excellent sponsorship value," noted Jim Lamie, director of sports and event marketing. (8)

Smart sponsors anticipate event marketing research costs. According to Goff, "You're going to have to justify your sponsorship at some point. So build those research dollars into your budget. That way you don't have to ask, 'Gee, did we succeed?' later on." (9)

Another growth area in the event research industry is helping companies determine in advance which events are right for them. Often event organizers are expected to do their own research and show it to potential sponsors. But companies may also turn to outside research firms for advice.

According to Nigel Geach, director of Sports Marketing Surveys, a British company, "A lot of the work we do now is pre-evaluation: looking at events, checking the demographics of the people who watch the sport or participate, then matching the profile against the target market for the product. More and more, today's sponsorship will have been evaluated in advance." (10)

Below is a list of objectives and commonly-used measurement tools.

OBJECTIVE	MEASUREMENT TOOL
SALES ACTIVITIES
On-Site Sales	Actual Sales
Mailing List Creation	Cards Filled Out/Catalogs Requested
Sampling	Samples Given Out
Couponing	Coupons Redeemed
Display/Demonstration	Event Attendance Figures
Entertain Clients	Future Orders
PROMOTION ACTIVITIES
Promotional Tie-Ins	Sales/Orders
Product Usage	Sales
Contest Tie-In	Number of Responses
PUBLIC RELATIONS ACTIVITIES
PR	Quality/Quantity of Media Coverage
ADVERTISING ACTIVITIES
Corporate ID	Times Logo Shown on Television
Awareness	Pre and Post-Event Surveys
Image	Pre and Post-Event Surveys
Target Marketing	Sales
Athlete/Celebrity Tie-In	Recognition/Likability Surveys

 

1 1988--source unknown.

2 The Wall Street Journal, April 19, 1989.

3 Chicago Tribune, February 19, 1990.

4 Chicago Tribune, February 19, 1990.

5 IEG Sponsorship Report, August 24, 1992.

6 Inside Media, April 13, 1994.

7 Promo, November 1, 1995.

8 IEG Sponsorship Report, May 15, 1995.

9 Promo November 1, 1995.

10 Marketing Week, March 31, 1995.

Home | Newsletter List | Next Issue