For a long time sponsorship has struggled to justify an equal place at the marketing table because of a perceived lack of bottom-line accountability.
Finance directors might continue to question how advertising and PR quantify their direct profit contribution, but cost per thousand, gross ratings points and so on are industry standard proxies that have allowed these disciplines to command the evaluation high ground compared with sponsorship.
Some specialist sponsorship agencies have tried to close this gap by developing bespoke measurement systems, but they suffer a lack of credibility because of their proprietary nature and inaccessibility to anyone who is not a client. However, the European Sponsorship Association (ESA) has challenged its members to resolve this issue. It aims to develop a standard framework for defining sponsorship's contribution to launch at its annual congress in November.
Why now? Partly because marketing directors are increasingly aware of the unique opportunity sponsorship provides to connect with customers, as evidenced by annual growth in spending on the medium outstripping more traditional rivals. Also, the industry has finally reached critical mass in recognising that a standardised system will bring more benefit overall than the parochialism of the past.
The debate over sponsorship assessment (what return on investment, or ROI, might be generated) and evaluation (analysing whether a property purchased has delivered the expected ROI) is one on which I hold strong opinions. Neither is easy, but neither is impossible. It is a question of putting objectives in place before contracts are signed. The exercise must, of course, create returns in either the profit and loss account, the balance sheet or both, but without clear, measurable goals it is impossible to judge performance.
This may seem obvious, but research by strategic sponsorship consultancy Redmandarin, published in Sportbusiness International, found that 12% of organisations spent money on sponsorship without setting clear objectives. Even worse, while 37% rated sponsorship as very important to marketing, more than 75% said it was not well understood as a marketing tool by their organisations.
This is a serious indictment of marketers. How can we convince chief executives of our efficacy in the boardroom, against such negligence with shareholder funds? The ESA aims to address the issue of defining value creation from sponsorship against key objectives, but it is up to marketers to improve organisations' understanding of sponsorship.
With UK sponsorship spend in 2005 predicted to be £1bn (Sports
Marketing Surveys) against a global total of £15bn (IEG), marketers
cannot afford to ignore this knowledge gap. To make the most of ESA's
tools, and to refute accusations of negligence by shareholders, I challenge
all marketers to make 2005 the year in which they develop their cognizance
of sponsorship, as well as organisational competence in managing valuable
sponsorship assets.
©marketing society
