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.