Today's Sponsorship Landscape

In a conference focused on numbers, the most important takeaway was how to

communicate the value of those numbers. The Sports Analytics Innovation Summit brought

together sport business industry leaders to discuss how sport organizations can use quantitative

data to improve the organization’s performance on and off the field. It would be difficult to find

a conference with people who loved the intersection of sports and numbers more than this

conference in San Francisco. Topics ranging from predicative modeling, analytics, economics,

data science, and data programming dominated the conversations during panels. Even with all of

these disparate topics, one central theme emerged from this conference. While more data is being

produced in the sport business industry than ever before, there are also more people who can

“crunch the numbers.” The people who will have a sustainable advantage in the sport business

industry are the ones who are able to analyze data and communicate their findings to a sport

organization’s different internal and external audiences.

Nowhere was this central conference theme more important than in sports sponsorship.

Corporate advertisers expect sport organizations to provide them with information on the return

on their investment (ROI) spend. Yet, sport organizations have typically communicated

sponsorship information using qualitative reports that no longer meet their partners’ expectations.

To be successful in attracting and retaining sponsors, sport organizations need to focus on how to

understand and efficiently communicate quantitative data.

Big data has already had a big impact on the sport business industry. The book and movie

Moneyball have popularized how using this data can help teams find undervalued players to

create a winning team on the field with lower player salaries. While analytics has continued to

take hold on the team operations side of sport organizations, business operations have been

slower to adopt a quantitative approach. One of the main reasons for this is that many people in

sport organizations do not possess the ability or language to communicate quantitative concepts.

Dynamic ticket pricing is a good example of this issue. The goal of dynamic ticket pricing is to

enable sport organizations to sell tickets at prices that reflect the true demand for the product.

However, how do you communicate to fans what factors go into a dynamic ticket pricing model?

How do fans really know if they are receiving the fair value for their tickets or are getting the

best price? These models can be so complicated that sport organizations often are hesitant to

detail how they work.

Sports sponsorship is dealing with a similar problem. The sponsorship industry generates

over $57.5 billion globally per year, with sports making up a majority of that spend (IEG, 2015).

With so much volume and competition, how do sport organizations determine if a sponsorship is

generating value? Companies now scrutinize their advertising spend more closely than ever

before. New digital, social, mobile, and geo-targeting platforms deliver metrics where brands can

see who views an ad, how long someone views an ad and how many people click on an ad. In

addition, media, entertainment, and video streaming companies are providing detailed

information on how much value companies receive related to a company’s advertising spend.

Sponsors now expect their experience with sport organizations to receive the same level of

transparency that sponsors obtain when advertising through other channels.

The sport business industry needs people who can deliver this experience because many

organizations at the professional, collegiate, and high school level lack this expertise. This

chapter provides the background, strategies, and tactics to be successful in addressing the most

critical sport business industry sponsorship challenges. The next section of this chapter discusses

exactly what sports sponsorship entails and how sponsorships have been valued in the past. This

chapter then highlights the challenges that have prevented sport organizations from adopting a

more quantitative approach to sponsorship valuation and evaluation. This chapter also describes

an approach on how to quantify and communicate sports sponsorship values using real-world

case studies as examples. This chapter concludes by showing how the industry will evolve and

the pressing need for people who can connect numbers with sponsorship.