Apr 05, 2011 at 02:40 PM
written by Michael Munson

How Do You Play Sponsorship?

When I first concluded sponsorship was held to a higher standard of performance than advertising or media buying, I was perplexed. Everyone always wants sales to result from any marketing initiative, but it seemed advertising and media were considered more legitimate because they could be measured, however imperfectly, by the number of eyeballs - potentially - reached, even focus group feedback on ads. Meanwhile, sponsorship investments without large media reach, lacking any measurement metrics, were scrutinized. It was like because the advertising industry had some measurement methodologies that was good enough for marketers to justify spending the vast majority of their budgets on TV, Radio, Print, and OOH advertising initiatives. How does this make sense, when sales are suppose to be the measure by which success or failure is determined?

There might be a way to measure something but it does not follow that the chosen measurement method helps us understand the impact what we are measuring has on realizing the ultimate objective we want to achieve. We could use a scale to determine the nutritional value of the food we eat and know precisely how much food weight we consume, but we’d make very little progress toward maximizing the quality of our nutrition relying on a scale to guide us. Similarly, we can use measurements of awareness and purchase intent to understand how people respond to advertising, but have to guess how many sales are generated as a result of advertising. I mean the infamous saying “I waste 50% of my marketing budget. I just don’t know which 50%” is prophetic. The truth is advertising can create awareness and shape attitudes toward brands, but it can’t measure actual purchase behavior. Only infomercials can do that. Oh, yes, sponsorship can too.

Chew on this… Advertising is embraced because it can be measured, but measures of advertising effectiveness only allow us to make educated guesses about what sales are driven by advertising. Sponsorship is marginalized because there is no way to measure it, but sponsorship impact can be directly quantified by the sales it produces (provided the sponsorship is activated in a way that makes it possible). At a time when accountability to sales is at an all-time high, the marketing medium most capable of telling us how it impacts sales takes heat for not being measurable. It’s mind numbing, and frankly a poor reflection on the marketing and sponsorship industries that this is the state of affairs.

Before I get attacked for panning advertising, let me make a clarification. There is a difference between advertising and media buying. Advertising refers to the creative and media buying refers to the placement of it. I am not sure what terms mean what to what people, but it seems to me advertising is the term most people use to describe media buys in action. When I say so much is spent on advertising, that really means so much is spent on creating awareness of it. The production of the creative is dwarfed by the cost of placing it. Just to be clear, the creative product that communicates a message is essential, whether placed in traditional media or in sponsorship property-owned media. But back to sponsorship as a quantifiable sales driver…

When a brand licenses rights from a sponsorship property, it is possible to know precisely how much revenue the association with the property created as a result of the activation, down to the penny. Because whereas advertising can only deliver a message, sponsorship can deliver a message, create incentives to drive purchase, loyalty, and advocacy. And, there are technologies available to facilitate and measure it all. The reality is sponsorship impact on sales can be quantified, but the ability to assess it is a direct function of the quality of the activation programs put in place to create demand and the mechanisms to measure them. This means accurate measurement of sponsorship’s value is only as possible as the people implementing it know how to make it happen.

I am a firm believer that you can’t blame the customer when the product is poor, but you sure as hell can blame the customer when he buys something and complains it doesn’t work when the reality is it works perfectly fine and he doesn’t know how to use it. Let’s be real. You aren’t going to pick up a guitar for the first time and play like Jimmy Page in his prime. Just as it takes practice to figure out how to make a guitar play great music, so to does it take practice to learn how to get great results from “playing” the sponsorship instrument.

When you consider over $500 billion will be spent on advertising in 2011, only $18 billion will be spent on sponsorship, and factor in how much more versatile and accountable for sales, sponsorship can be than advertising and media buying, it suggests there are a whole lot of people in charge of marketing budgets with no clue how to “play” sponsorship. If there were, sponsorship spending would equal far more than the not even 4% of money spent on advertising.

Simply spending more money on sponsorship is not the answer to improving the measurable results sponsorship can deliver. It may require expanding the sponsorship budget at the expense of traditional advertising, but just as you aren’t going to get better at playing the guitar simply by buying more better guitars, you won’t get better at sponsorship by buying more and better properties. The bottom line is if you aren’t getting what you want from sponsorship, it’s time to look in the mirror and admit you don’t know what you are doing and get lessons on how to play it more effectively. A good musician never blames his instrument.

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The opinions expressed herein do not necessarily represent those of the publisher, SponsorPitch, LLC.