In the past week alone, Mastercard has signed on as a global partner of League of Legends in eSports, Allianz has announced its partnership with the Olympics as insurance provider and the Portland Trail Blazers unveiled their jersey sponsorship with Performance Health. Around the world, thousands of sponsorship deals are decided upon every year. So, how are these sponsorship decisions – both big and small – made?
When a sponsor decides to invest in a property, it is a sophisticated decision based on much thought. It is a decision science that is of interest to sponsors, properties and agencies alike. Sponsors want efficiency and ROI, properties want to be the platforms of choice for sponsors, and agencies want to understand the drivers so they can maximize value for their sponsor and property clients.
A few years ago, we consulted with the Education Committee of the Sponsorship Marketing Council of Canada (SMCC). SMCC is a partner on the CSLS. In this consultation process, two new questions were added to the CSLS for 2016 (data collected based on the 2015 year).
One of these questions has really helped inform the drivers of decisions on sponsorship by sponsors. The results over the past few years also revealed a few important trends around sponsor decisions on sponsorships. The breakdown of decisions by sponsors, and then by agencies on their sponsors behalf, is illustrated here:
Notably, and importantly for all sponsorship stakeholders, the results show very positively that sponsorship decisions in Canada are being made for the ‘right’ reasons. And, by ‘right’, we mean for the ability to help the sponsor associate and link to the passions and interests of their consumers and potential consumers – the decision is being made for a business reason and assessed using business metrics.
Similarly, we see the ‘bias’ option (e.g., the CEO likes to golf, so the company sponsors golf) as low for sponsors (10% in 2016, but up to 18% in 2017) but still there. However, the agencies responding on behalf of their sponsors (see the chart on the right) are not as positive, suggesting that sponsors aren’t quite as unbiased as perhaps they think they are.
Another key observation is the importance of analytics and evidence in these decisions. The factors of industry trends, asset assessment, internal data/analysis, and competitor activity all make up about 10% to 15% of the influence, for a total of about 45% for sponsorship decisions. This is very positive for sponsorship overall.
So, for those sponsors and agencies making sponsorship decisions and recommendations, think about what kind of questions you’re asking yourself or your client:
- Consumer passions/interests – What do my [existing, potential, best] customers care about? Where can I spend some time with my [existing, potential, best] customers?
- Industry trends – Everyone’s talking about [insert latest trend here]. What’s the next big thing?
- Asset assessment – What do the properties have to offer us that we need or could use?
- Internal data/analysis – How can we increase employee satisfaction? Where are we losing customers?
- Competitor activity – Everyone’s talking about [insert competition here]. How do we do what they’re doing, only better? Or what should we do instead?
- Bias – Wouldn’t it be fun to attend [insert activity here]?
The reality is that sponsors are likely making decisions based on a blend of the factors above, but knowing what questions you’re asking will go a long way in making the best decisions.
Photo by Victoriano Izquierdo on Unsplash
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This post was written by Norm O'Reilly & Elisa Beselt