The month and a half long ICC Cricket World Cup 2019 finally concluded (in spectacular, nail-biting fashion!) a few weeks ago. The winners England walked away with a cool $4,000,000 in prize money while runners-up New Zealand pocketed $2,000,000 for their efforts. According to reports, the total prize money for the 2019 edition of the tournament was $10,000,000 with a significant portion of this coming from sponsorships from brands such as Nissan, Oppo, MRF Tyres, MoneyGram, Emirates, Coca-Cola, GoDaddy, Hublot and BIRA 91. Many of them e.g. Nissan, Emirates and Coca Cola are repeat sponsors having been associated with ICC cricket events for a number of years now.
So how do these brands derive value from their sponsorships? What are their objectives for sponsoring? And importantly, how can they measure the Return on Investment (ROI) on their multi-million dollar spends to determine if they are an effective marketing investment and should be continued? Let’s take a closer look.
Estimates published by the World Advertising Research Centre (WARC) suggest that companies spent approximately $65.8 billion on sponsorship deals (most of it on sports) in 2018 However, research by market research agency MKTG revealed that just under 20% of the corporate sponsorship executives surveyed even had a method to measure ROI on their sponsorships. 73% said that “brand awareness” was the primary objective and ROI was not even the main point of sponsorships.
With the huge amounts of money involved in sports sponsorship deals, this is – to say the least – surprising! While brand awareness is certainly a benefit that sponsors can expect, how do they measure if the awareness generated from a deal is worth the amount spent? And is that the only benefit from sponsorships? Marketing executives need a wider lens to articulate their sponsorship strategy and objectives, calculate all the value derived from a sponsorship and then make data-based business decisions for the future.
Let’s consider the ICC Cricket World Cup 2019 as an example and look at some of the ways sponsors derive value from the association.
The most visible and tangible value is logo visibility. This includes logos at the match venues and on players’ jerseys which are visible to stadium spectators as well as those watching live broadcasts or match highlights on TV or online. It also includes logos on all advertising and promotions for the tournament across TV, outdoor, print, online and social media leading up to the event. Sponsor logos are also prominently visible in all player interviews, press conferences and players’ social media posts on their Instagram or Twitter feeds etc. Look back at any match telecast or post-match interview from the World Cup and you’ll be hard pressed to miss the logos of the major sponsors.
Activations & Promotions
A second major channel for value is through activations and promotions that seek to build brand affinity during the tournament. Think sampling kiosks and contests giving away tickets to matches, opportunities to meet the players or autographed merchandize. These entail additional spends by the brand, but deliver a critical multiplier-effect to brand affinity and positive brand associations during the event. Nissan’s new SUV Kicks, the official car for the 2019 World Cup, went around India with the World Cup in the front seat, to capitalize on the World Cup buzz and build brand awareness for the new launch.
Hospitality & Special Incentives
In addition, there could be numerous other value channels including special seats and hospitality for senior client executives, tickets and other incentives for the brand’s own sales teams and employees, and other “money-can’t-buy” experiences for important stakeholders.
We can presume that all of the above positively impact brand awareness, consideration, and hopefully purchase and brand affinity. In order to pull it all together, brands must adopt a wholistic methodology that combines the following components.
Marketing Mix Modeling – This analytical approach looks at the relationship between different types of marketing spending and sales or other business performance metrics to determine how each activity has impacted performance. In a month and a half long event like the Cricket World Cup, sponsoring brands typically execute numerous activations and customer interactions across markets to build awareness and affinity and drive purchase. Marketing Mix Modeling looks at the spend and support for each activation and co-relates this with the resultant uptick in sales to measure the effectiveness and ROI of each activity in each market. Brands can then use these insights to refine their strategy for future sponsored events.
Social Media Listening and Analytics – Social listening is the monitoring of social media channels to hear what people are saying about a brand (when they think the brand isn’t listening!). An in-depth social listening analytics exercise can help measure both the quantity and more importantly the quality of increase in awareness, perception, affinity and positive associations for the brand before and after the sponsorship. AI-powered social listening tools make this not just possible but easy to do today.
Consumer Market Research – Conventional market research can also help to measure the before-and-after increase in awareness, brand message recall, customer satisfaction of the sponsorship event, likeliness to recommend and other metrics.
Combining these results can help brands get a fairly accurate idea of the value derived from a sponsorship. Brands look for a minimum ROI of 2:1 which means $200 value for every $100 of sponsorship spend. But a more compelling ROI is 3:1 or even 4:1. At these levels, a brand knows with confidence that its sponsorship strategy is paying off and can make an informed and data-based decision to invest in sponsorship for the next big sports event!
Authors: Rahul Budhraja, Co-Founder & Managing Partner, Analytic Edge