How is the value of a sponsorship calculated?
The evaluation of a sponsorship is a fundamental parameter when establishing new business relationships between brands. Measuring its possible effect is complex because it must take into account a large number of factors. However, many of them are not easy to read and it is therefore vital to develop a strategy to highlight all the advantages of this type of initiative.
What is the value of the sponsorship?
Sponsoring offers additional opportunities to companies beyond marketing and advertising. Indeed, upon closer inspection, it is a fraction of these activities and has the merit of directly involving the public rather than simply providing information. It is able to increase the value of a brand, its reputation as well as the extension of its general audience.
Reasons for calculating sponsorship value
Sponsorship itself, obviously, is not a universal tool and can only be effective if coordinated with other communication channels. In some cases, however, it can produce a “wow” effect if the audience is chosen correctly. Participation in particular projects allows sponsors to attract a well-targeted audience by being part of the event themselves. The association between brand and context contributes to increasing the value of the brand thanks to the natural driving force offered by the scenario.
Appearing alongside sports figures, teams and events can also generate media coverage that would otherwise be difficult to achieve with the traditional media mix. However, sponsorship offers must comply with the brands' corporate culture and policies and their objectives and, of course, contribute to brand awareness and profitability.
A sponsorship proposal for a team, an event or a championship must necessarily consider the propensity of consumers to associate sponsors with the event they promote. It is therefore the agency's task to select the most appropriate events and contexts for the sponsors' brand, product or corporate image. It is clear how an accurate analysis can clarify the suitability of the message and the campaign based on the desired objectives.
There are numerous parameters to take into consideration when you want to calculate the value of the sponsorship: the panorama of opportunities, the objectives of the campaign, how the results will be measured, the initiatives linked to involvement, the messages.
The target audience is one of the most important criteria when defining an offer. Partnerships must conform to the culture and corporate policy of the sponsors and their objectives and contribute to brand awareness and profitability. In many respects, companies engage in sponsorships based on individual characteristics when deciding where and how much to invest. Much of the success depends on how effectively a company can guess the mood of its target audience and choose the right niche to invest in, while also knowing how to measure the value of the sponsorship in the end.
Dorna and Clearsight
The importance of these parameters is such that the organizers of the main championships themselves collect and aggregate the data relating to exposure. For example, Dorna, the company that manages MotoGP and Superbike, provides very detailed reports on broadcasting to each individual team. In these documents developed by Clearsight, the time intervals in which each logo remains visible on the screen are measured. This is possible thanks to a meticulous analysis of everything that is broadcast during the race weekend.
Based on this amount of data, rankings and graphs can be drawn up in order to understand which logos have enjoyed the greatest exposure. Consequently, through a series of calculations that take into consideration a variety of economic parameters - which include for example the average cost of advertising and television share - the actual value of that visibility can be obtained.
The depth of research goes as far as assigning a sort of score - expressed as a percentage - to how the exposure of the brands is distributed across the various media and on the bikes themselves. In the first case we talk about the bike, rider, team members, garage and more. Referring specifically to the vehicle, the entire "brandable" surface is divided into the fairing, the side part of the fairings, the tub, the tank-seat-tail area, the rear mudguard and the front mudguard.
By doing this it becomes much easier to understand which areas and moments are the most interesting to have the greatest exposure. Given an average playing time that allows all investors to see their efforts rewarded, sporting and territorial dynamics certainly create a hierarchy between the various brands. The most successful rider, team and bike will enjoy a greater number of shots while local idols will have more space in their home races.
Other factors can contribute to altering this type of distribution: for example the type of circuit and the relative positioning of the cameras, the weather, specific events during the weekend.
On the motorbike, even in quite intuitive ways, the privileged area remains that of the central and upper part of the fairings, which, thanks to the more regular shape and greater extension, allows larger brands and writings to be displayed. Followed by the fairing (smaller and more irregular but almost always at the center of the frontal shots), the lower part of the fairing and then, further away, the tank-tail area (often covered by the rider's body and structured according to very articulated volumes) and finally the front and rear mudguard including swingarm cover.
If for the vehicle the percentages relating to the areas mentioned above vary within a range which however does not distort the overall values, what happens in the mix is different. In the image we can see how from time to time both the team and the rider can enjoy equal if not greater exposure than the bike itself.
This precious tool therefore allows us to provide teams and investors with a more faithful snapshot of the results obtained and obtainable in terms of awareness, at least that achieved on television. Added to this is a channel that has gradually become more and more important over the years: we are obviously referring to the web and social media. Also in this case, technology helps us to indicate audience metrics with good precision.
Web and Social
In this regard, Hookit.com (agency specializing in the analysis of data linked to sports sponsorships) has developed its own analysis system to determine the value of sponsorship in these areas. To give an idea of how it works, he provides us with an example of a report, specifically the one relating to the weekend of the 2021 Monte Carlo Grand Prix. Instead of dealing with the competitive part, he highlighted the returns obtained by brand investors in the Formula 1 World Championship through the value generated by the teams' activities. This algorithm mainly considers the social-web sphere as it allows us to have data on engagement and a perimeter of the audience reached. To this must obviously be added all the volume provided by the press, TV and live spectators.
The total amount exceeds 48 million dollars, a very high value and well above any other motorsport event. This data is the result of an aggregate formula which is defined as AAV - Adjusted Ad Value - which mediates the cost of engagement (visits, views, interactions) with a quality parameter based on the type of exposure of the brand and its values.
Based on this dynamic we discover that there were 3700 hashtags linked to the event, 136 million interactions and 297 million video views. The percentage of posts that included brand promotion was 71% while the average quality of promotion was 18,5%.
The manufacturers and the main sponsors of the championship and the teams mainly benefited from this volume of traffic and visibility. Ferrari, McLaren, Red Bull, Pirelli, Rolex, Tag Heuer, Misson Winnow have all exceeded the $2 million mark.
The figures are obtained by cross-referencing the interaction data with the costs that the same spaces would have if the result of advertisements and promotions.
The report is obviously much longer and more detailed but this summary also allows us to understand how there are "scientific" ways to measure the return on investment even when it is not immediately perceptible.
Making these insights available becomes vital in communicating the potential of the medium, of which there is often no real and total awareness.
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