How Can Properties Value Sponsorship

Many individual sport organizations are generating millions of dollars from sports

sponsorships. In addition, the largest companies in the world work with leading advertising

agencies, including Octagon, IMG, OMD, and Tribune Media Group, to source, buy, and

manage sponsorships for sport organizations. That means industry leaders that sell and buy

sports sponsorship interact to discuss opportunities on a regular basis.

Despite sponsorship representing such a significant portion of an organization’s revenue

stream and sport organizations working with Fortune 500 companies, quantitative sports

sponsorship valuation is only beginning to permeate the industry. Most sport organizations

currently use “recaps” to communicate the value of sponsorships to their corporate partners.

These recaps are usually PowerPoint and PDF documents featuring images of sponsorship

activations. These recaps typically include photos of activation elements across the different

categories of sports sponsorship so organizations can see how different audiences interact with

their brands.

Sponsorship recaps often have limited quantitative data because corporate partners often

do not ask for or require this information. For many corporate partners, just seeing their

activation elements provides the necessary support to renew their sponsorships. In addition,

providing tickets to sporting events for sponsors is a unique way to reward the people who

generate the most for the sport organization’s bottom line.

The economic downturn in 2008-2010 combined with the growth of big data and new

marketplace technologies changed this dynamic. Financial services, automobile, and insurance

companies are among the largest sponsors of sport organizations. Companies in these industries

are also the companies who were the hardest hit by the economic downturn. As companies such

as Bank of America, General Motors, and AIG were all receiving federal aid, more scrutiny than

ever before was being placed on these organizations, especially on their marketing and

advertising spend.

At the same time, big data and technology continued to change the way that advertising is

purchased. In particular, companies could receive detailed information on their customers

through new digital channels. Real-time digital analytics enabled companies to know how many

customers saw an advertisement, watched a video, or clicked on a promotion. In addition, new

marketplaces emerged that enabled buyers and sellers of advertising to see inventory and prices

in real time. Google, Microsoft, and Facebook all have advertising exchanges where sport

organizations can purchase inventory. To remain competitive, traditional media companies also

started to more frequently provide detailed pricing and consumption data to their advertising

customers.