The Do’s and Don’ts of Valuing Your Sponsorship Platform
Rights holders often value their sponsorship packages based on how much funding they need to run their respective property. The reason brands sponsor properties is because the ROI exceeds that of a traditional media buy, therefore the value of a sponsorship package needs to tangibly relate to this and prove it’s a better option so here are a few do’s and don’ts of valuing a sponsorship platform.
DO benchmark against competitors, find out how much similar properties are charging for sponsorship to understand if you’re on the right lines – think about what you can offer sponsors that they can’t.
DON’T benchmark against properties that are in a different league, there is a tendency to compare a property to the biggest and best rights holder in the given field. This will not work, unless you actually are in their league.
DO measure how much reach and coverage a brand will receive as a sponsor then compare this to the fee a brand would ordinarily have to spend to reach this number of people – this can be worked out by finding the average CPM (Cost Per Thousand) for the given platform.
DON’T forget to measure the sponsor impact on each asset. For example, a brand’s logo may be included on the press board at a launch event, however if it is one of 10 other logos the sponsor impact is 10% so the cost needs to reflect this – total cost of asset is £100 so valuation would be £10 for each sponsor.
DO tiered sponsorship packages – as long as the assets are able to be split out. Not every brand will have the budget or resources for the entire sponsorship fee so have lower packages available.
DON’T allow brands to pick and choose exactly what they want, this will create a lot of work and a sponsorship package is not a supermarket.
DO gear the final sponsorship fee to reflect how many competitors are in your field, if you have a lot of competitors pricing needs to be competitive.
DON’T charge a sponsor the total value as you price it out. A sponsorship package represents value to a brand vs. buying advertising so if your valuation is £1million (media cost) your sponsorship fee needs to be less than this.
Following these do’s and don’ts will not make sponsors begin writing you cheques for millions, but it will get you on your way to valuing your sponsorship correctly and understanding what you can offer a sponsor. If you need any further help with this or have any questions feel free to get in touch with us and we’ll be happy to help.
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