As much as everyone involved in sports marketing likes to describe their organizations as data driven, the field itself has long suffered from a lack of empirical evidence proving its effectiveness as a driver of brand objectives.
Proof exists. It’s just too often kept private for perceived competitive and other business reasons. (We would all be better off if brands took the time to distinguish between information that legitimately needs to be kept secret versus that which could be shared for the benefit of everyone, but that’s a rant for another day.)
So it’s worth a small celebration when one or two of those proof points make an appearance, as they did recently during a webinar presented by Nielsen.
As someone who has long advocated for the use of advanced modeling to isolate sponsorship spending’s impact on sales, I was pleased to hear about the research company’s work with “one of the 10 largest U.S. retailers using Econometric models to measure incremental impact and optimize ROI for traditional media and sponsorship.”
Researching sponsorship of more than a dozen properties across the “NFL, NBA, MLB, MLS, NHL plus various PGA events,” for every $1 spent the retailer earned an average $1.20 in “short-term ROI.”
In another study of the “contribution of sponsorship to short-term incremental sales” across an undisclosed number of Nielsen clients, results showed that “sponsorship typically contributes to at least one percent of sales, with one of every six cases showing a sponsorship contribution of five percent or above.”
Delivering one percent of sales may not seem significant until it’s converted into actual dollars, i.e., one percent of sales for a major company or brand would typically far exceed the amount spent on the sponsorships that produced it.
As revealing (and positive) as those two pieces of research are, they raise additional important questions.
In the retailer study that determined the average $1.20-to-$1 return, Nielsen shared that of 12 property relationships analyzed, only three were above break even, one sponsorship returned $1 for $1, while eight others did not earn their investment back in incremental sales.
Although it is quite likely those eight sponsorships delivered on other brand objectives, it would be enlightening to know more about the purpose, activation executions and other details of these partnerships in order to determine true ROI and ROO. Especially noteworthy would be an analysis of how those three top-performing sponsorships returned short-term payoffs of 2:1, 3:1 and 4:1, respectively.
In the multi-client study, it would be great to know how sponsorship’s one-percent contribution stacks up against other elements of the marketing mix, i.e., did it perform better or worse than TV advertising, price discounts, digital marketing, etc.?