What is sports sponsorship and is it effective?
Investing in a sports entity to support overall organizational objectives and marketing goals
The Sponsorship Process
- Sponsorship Budget
- Sample costs of sponsorship
- Corporate Box at the United Center $220,000
- Title sponsor of Tot Trot $7500
- Official Supplier for MLB $10 million
- Premier League $15 million
- Initial Costs, but there is maintenance and leveraging
- Sponsorship Acquisition
- Determine Scope of the Sponsorship (sports event pyramid with global, international, national, regional and local events)
- Determine the athletic platform (entity and level of competition)
- Implementing and Evaluating the Sponsorship
- Number of mentions in popular media
- Media Equivalencies
- Sales figures (pre and post)
- Attitude change (pre and post)
- Number of distributors (pre and post)
Sponsorship Objectives
- Direct
- Indirect
- Awareness
- Competition (ambush mktg- planned effort to associate themselves with an event -- I Love LA)
- Reaching Target Markets (Allows us to reach consumer where they live and play)
- Relationship Building
- Image Building
Marketers turn to sponsorship to develop a heart/mind connection. A sports sponsor could create a strong tie between his brand and the fans by leveraging the emotional power of a personality, sport or event. The greater the number of times the appearance of a brand name or logo is seen by the fans it results in establishing of the company as part of what that personality, event, or league represents. It is therefore to be noted that when there is a Sponsorship then a stronger tie is created with fans which is more than advertising.
When one selects a sponsorship it involves more than just finding one that fits into the marketing budget. It is to be seen what kind of sponsorship one would like to whether league or athlete? This decision has a major impact on its final effectiveness. It is to be noted that among Americans, event sponsorship does make a much stronger and powerful statement than sponsoring a lone athlete. There is evidence is to prove that in spite of the huge amount of dollars invested in athletes, sponsorship of an athlete generate the least impact.
This choice of event, league or athlete sponsorship is critical. The liaison needs to be credible for the target market - and it must positive signs. For example, there has been quiet a number of queries about illicit drug use currently plaguing USA Track and Field, the company that sponsors the team may generate negative impressions of their brand.
Quantifying ROI
There is a long-running debate about whether or not the impact of sport sponsorship can be accurately quantified. To make it all worthwhile, a sponsor has to know the value his investment created. Not only does measuring ROI provide an assessment of what has happened, it also provides a useful negotiating tool when future sponsorships are being considered. For example, the NFL uses ROI measurements when valuing and negotiating sponsorships. Their most publicized deal is their eight-year, $ 384 m Gatorade sponsorship, the second largest in U.S. sports sponsorship history.
To compare the effectiveness of a sponsorship against other marketing activities, a comparable ROI is required - and the evaluation process is similar to that used for advertising. Sponsorship ROI measurement consists of three elements: media exposure, awareness and purchase, and commitment. The weight of these three elements varies by the sponsorship's scope and duration. For U.S. based sponsorships, awareness is often the key element, followed by commitment and brand usage, and finally media exposure. In general, sponsorships take about some time to mature, normally around three years. For one-time events, awareness and media exposure are the key aspects since commitment is not built with single events.
Exposure to the media one of the most common methods used to measure ROI. It benchmarks a dollar value on your sponsorship, and includes news/promotional segments, radio, television, print, on-site, and any international audience data. However, when evaluating sponsorships, it is important to note that 15 seconds of logo exposure creates a smaller dollar value than 15 seconds of advertising.
Measuring media exposure has traditionally been done by individuals looking and listening for brand names or company logos on signage at stadiums, team marks, verbal mentions and event materials. However, today's newest and most sophisticated method to determine exposure uses digital technology. This provides faster and more reliable information because it eliminates the human error. Using technology one could also determine logo position and size.
To calculate the potential sales value generated by a sponsorship, the awareness level of the brand is multiplied by the fans' actual purchase or intent to purchase ratio. The types of questions asked to determine awareness include overall awareness of a league or event, category awareness, and the brand image associated with the sponsored team, player, event or league.
It is to be noted that the final factor in the calculation of ROI is commitment. Stronger than satisfaction or loyalty, commitment is a measure that combines both attitudes and emotion and has the ability to predict future behavior. Commitment also determines the strength of the relationship between a consumer and a brand and is a key element in brand building. Commitment measures enable a sponsor to answer questions like:
- which sponsorship creates the strongest relationship with my target customers?
- which sponsorship has the greatest potential for attracting new customers?
The more committed a fan is, the more he or she is prepared to spend. The financial impact of sports sponsorship activities can therefore be calculated by analyzing the average expenditure for each commitment segment.
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