How to Measure Sponsorship ROI



I recently read a comment on LinkedIn where someone was looking for companies that measure ROI on sponsorship programmes. I thought it was an interesting question and one I’ve had some experience with.


In the past, calculating ROI on sponsorship has lacked much of the real-time data that we have today, but many of the approach methodologies or fundamentals still exist. I hope the following list helps anyone who is navigating the same issue.


1. Define the parameters

First of all we need to understand our current position (current metrics) and the objectives of sponsorship (future metrics).


Different organisations will have different needs. For example, if the sponsorship is expected to deliver a financial return, then what is that return, by what date should it be realised and how are we going to track that the return was as a direct result of the sponsorship efforts?


Doing this often relies on tracking methods such as Google Analytics and dedicated webpages aligned with the sponsorship efforts, coupon codes or even simple questionnaires.

Brand engagement can also be a measurement of sponsorship ROI. I would recommend calculating engagement in a range of areas both individually as well as holistically. The areas of engagement that I would measure are:


Sentiment

What is the audience saying about us and our brand?

Social media has become an excellent place to develop these insights and with sentiment analysis becoming more and more powerful; the accuracy of the analysis is always improving.


Shares, Likes, re-Tweets etc

HootSuite recently published this infographic (figure 1), which gives a great overview of engagement and amplification metrics. The full article can be found here The Beginners Guide to Engagement.




Figure 1: Image Credit: A Beginners Guide to Social Metrics: HootSuite, May 2014 https://blog.hootsuite.com/beginners-guide-engagement/


Website traffic

You may want to use the sponsorship approach to drive more visitors to your website. If this is the case you would ideally look for spikes after the event.


I’ve just run some analysis on a local Not for Profit organisation in WA to use as an example (see Figure 2 below). By using this method of analysis you can quickly see if there has been any adjustment in the trend that can be attributed to your sponsorship efforts.


I would recommend conducting this analysis alongside other metrics to ensure validity and reliability.



Figure 2: Example of traffic analytics conducted by VUCAP February 2018



An often underutilised measurement of ROI is competitor analysis. Especially in the for profit space, it may be critical that our sponsorship efforts also reduce the market share of our competitors.


Figure 3 shows one example of how an organisation can compare traffic after a sponsorship event with the aim to identify any downward change in competitors. In this example you can see organic keywords and traffic and how they are trending.



Figure 3: Example of competitor analysis conducted by VUCAP February 2018





These methods are a good example of how an offline approach can be measured online. However there has to be an established dollar value for what this means. How much is a Facebook Like worth? How much is an extra 20% in web-traffic or visitors to your store worth?

These are calculations that have to be made before investing in sponsorship in order to get a clear metric that is meaningful to the decision maker. This person will need to decide between sponsorship and other marketing or investment options.



1. Understand the real costs

It’s easy to think of the cost of sponsorship as being the fee paid for the sponsorship itself. However in order to realise the value of the sponsorship the organisation will need to invest in planning, tracking and coordinating activities.


A well designed sponsorship plan will help to first of all identify all the actions and from there the costs can be calculated. Eventbrite have also created an easy to use tool to help calculate the market value of each event asset. You can find it by clicking here Sponsorship Market Rate Valuation Workbook.


2. ROI ratio

Now you have your real costs and expected returns it’s important to develop your ROI ratio. This will also help you to easily compare ROI from other business decisions (not only marketing). For example, if your sponsorship real costs are $10,000 and the increase in revenue is $20,000 your ROI ratio is 1:2.


3. Compare with other investments

Finally, compare your ROI ratio with other investments. By doing this you can be sure that this is the preferred use of funds.



Good luck with your strategic sponsorship programmes and feel free to get in touch and share any lessons learnt along the way.



Andre De Barr

andre.debarr@vucap.com.au

#thinkVUCAP #globalcity #globalcityperth


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