The Challenges Facing Sponsorship Evaluation 8th December, 2010

So What’s Wrong With Sponsorship Evaluation? Right now sponsorship evaluation should be a hot topic. Sponsorship spend continues to rise year on year and with the current economic situation you would think being able to demonstrate ROI would be critical right? Despite this evaluation budgets are still seemingly being cut left right and centre. So what prevents the sponsorship industry from embracing evaluation?

Here are seven possible reasons…

1. Poor objectives result in poor evaluation: Effective evaluation relies on being able to evaluate whether sponsorship objectives have been met. So if no objectives have been set, or if they simply aren’t measurable any research you commission is ultimately going to be a waste of money. However, few research companies are going to turn down the opportunity to spend your money just because you give them un-measurable objectives. The result…the industry gets flooded with ineffective evaluation.  At this point marketing directors cut budgets as the research tells them nothing they don’t already know.

The misconception that evaluation results in the termination of a sponsorship programme: In reality that is very unlikely. In the majority of cases the decision to sponsor, although not always based on sound consumer insight, is at least logical and follows good common sense. No one is going to question a beer brand that chooses to align themselves with a social occasion like a music festival. So once this basic fit has been confirmed the evaluation should be able to provide a steer to improve the effectiveness of future planned activations. e.g. Increase spend for on-site activations that deliver cut through and decrease spend on radio adverts which research shows are failing to cut through. If the evaluation can’t do this, the conclusion is your budgets probably could be better spent.

Connected to point two is point three…

3. Conflict of interests: The person most likely to commission sponsorship evaluation is the very same person that created the programme or brokered the deal. Why would you want tangible evidence to show you have wasted your employers’ money? Suddenly selling sponsorship evaluation has become a lot harder! However, let’s go back to point two. There needs to be a mindset change, sponsorship evaluation should be commissioned to help fine-tune the effectiveness of the campaign. Evaluation is a tool that can help the sponsorship look better not worse, if vanity is really so important.

4. Limited understanding of the benefits: Sponsorship evaluation should be your friend. Here is how it can help. i. If you have tangible evidence that proves sponsorship has driven bottom line value it is much easier for you to protect your future sponsorship budgets. ii. Evaluation can be used during re-negotiations to ensure rights fees are kept in-line with the likely returns for the business based on previous experience with that property. iii. Consistently planned evaluation can be used to compare the performance of sponsorship programmes within your portfolio, so you can easily see which ones are delivering the best returns and how best to allocate future budgets. iv. Evaluation helps you understand the effectiveness of all your communication touchpoints, so if radio is providing less consumer cut through you will know to switch your focus to an activity which is working more effectively.

5. It’s too expensive: It is true consumer research can be expensive, but anyone can begin to understand and benchmark their sponsorship activity without spending a penny. Ok this output data won’t tell you about the effects of sponsorship but it can help you understand the reach comparative to the other activities within your portfolio, and that’s a start. Output data can include: Unique website visitors, event attendee numbers, number of free samples distributed, competition entries, number of VIP guests that actually showed up. Suddenly you have a way of benchmarking your sponsorship portfolio.

6. Advertising equivalency values (AVEs) / media evaluation has damaged the credibility of evaluation: The sponsorship evaluation industry was founded on media evaluation with students using stopwatches to calculate the length of time a sponsors’ logo was exposed, this exposure time was then turned into a figure purporting to show what this coverage would be worth if it was bought as advertising. How on earth did this ever become the established form of evaluation?

Well going back to point 3 if you don’t want to risk your programme from being cut, this is perfect. You get a simple figure, which suggests to your bosses you are delivering real monetary value to the business and no one has the time or desire to rock the boat. There are tons of reasons why advertising equivalency value is pointless, but here is one. Advertising is evaluated on effectiveness, not the cost to buy the space. So why should sponsorship be different?

7. The poor definition of sponsorship: Every sponsorship agency has at some time tried to write their own definition of what sponsorship actually means. Most practitioners would agree it is a two-way or mutually beneficial transaction between the rights holder and the sponsor. The sponsor gains access to valuable rights and the rights holder benefits from sponsor money or expertise through a value in kind deal. However, incredibly very few definitions ever suggest that a sponsorship should be directly linked to the business bottom line and generate actual sales.  What message does this send out? You can blow thousands if not millions on sponsorship activity and never have to worry about proving a return. Sounds like a cop-out.

History suggests that in times of recession creativity and business agility come to the fore. Could this be the time when sponsorship finally grows up and begins to prove its true worth? Let’s hope so.