How yachting sponsorship measures up
Effective measurement and evaluation of sponsorship is critical if it is to be effective
This article was originally published in Sport Business, Nov 2004. I feel the principles still hold true.
In one respect at least, yacht racing sponsorship is exactly the same as a sponsorship in soccer, tennis, rugby, or chess. If you don’t set objectives and adopt a thorough, proven way of measuring success against those objectives there is a good chance you are pouring your money down the heads.
The sponsorship industry is increasingly focusing on delivering results and demonstrating value achieved. The myth that sports sponsorship “is too difficult to measure therefore not worthy of investment,” thankfully is no longer true.
Measurement of sponsorship is more than just about proving value and returns – although frequently it seems more of a defensive tool in the board room. It is vital to establish how effectively the sponsorship is working and what changes should be made to improve returns. Effectively, it is no different from a staff performance appraisal.
Historically, many brand owners have either not engaged in effective measurement or are measuring the wrong thing. Lack of measurement makes it difficult to demonstrate commercial returns, leading to the impression that results have not been delivered and a discontinuation of sponsorship funding. This creates a sense of wasted investment and a frustrated funds-free sailing team or athlete!
Other brand owners evaluate the wrong thing for the wrong reasons. Measuring print column inches and media airtime can help increase the egos of the board directors and PR teams, but does not necessarily establish the real results of the sponsorship.
There is a ‘truth universally acknowledged’ that there is no single sponsorship measurement tool, and that each agency has devised its own system which is frequently considered a “problem”. Yacht racing sponsorship consists of many and varied properties, therefore it is probably a bonus that there is no one tool. Using the staff appraisals analogy, it would be inappropriate to evaluate a salesman and production engineer using similar criteria. Every sponsorship project has different objectives and leverage plans, therefore metrics and measures tailored to fit the programme are essential.
What should we measure?
In a study conducted in 2002 with ten major blue-chip brands involved in significant yachting sponsorships, 80% stated their objectives were to increase brand awareness, customer loyalty and enhance corporate image and reputation.
The overall approach to measuring was less well defined with 70% aiming to measure brand awareness. The main method was measuring media exposure – column inches and media airtime – with some valuing media coverage using equivalent advertising values and only two using a weighted value. Ironically, some of the companies measuring brand awareness through the media had not set brand awareness as an objective! In addition, media exposure as a measure on its own does not guarantee the audience has noticed the brand.
Measuring media value equated to the costs of advertising is also a flawed measurement, especially as advertising rate cards are frequently discounted. Whilst the large figures may provide a “feel good” factor, advertising is a paid for medium which enables brand and product messages to be developed. Brand exposure via the media can frequently only display a logo on screen without a message.
There is little editorial control over messages conveyed in the press compared to advertising. Viewers consume advertising differently to editorial, which is perceived to be independent. Therefore, brand mentions and corporate messages within editorial hold a different type of value to advertising. The two simply do not compare.
The fixation with a need to measure media value recurs in the 2004 study of 39 sponsors for The Business of Yacht Racing report. The primary objectives of many brand owners are employee focused, especially in France. However, primary measurements are through using media valuation rather than any internal evaluation.
In the 2002 study, 30% were researching brand perceptions and impact; whether positive or negative brand messages were appearing in the media. The process of evaluating what is said, where it is published, the types of readers and viewers, together with assessing actual perceptions held by target audiences, provides powerful data. This can be used to demonstrate the effectiveness of a communications campaign and highlight any changes needed.
Creating or changing image perceptions will not automatically occur through brand exposure, unless these are reinforced by an integrated sponsorship communications campaign targeted at key audiences. Similarly, building relationships and loyalty takes place over time through a combination of effective communications and brand experiences, such as hospitality. Only half the companies aiming to increase loyalty engaged in customer opinion surveys.
“It is impossible to measure bottom line sales” is another frequent cry about sports sponsorship. When used as part of the overall marketing mix, it can be difficult to separate out the specific impact of the sponsorship on driving sales. Similarly, establishing the exact impact of the sales representative, the advertising campaign or corporate website to recognisable sales revenue is difficult. It is worth noting that the contribution of sports sponsorship to the bottom line is an emotive boardroom topic, whereas the advertising budget or sales rep performances are rarely discussed.
The problem with assessing bottom line impact is frequently due to the absence of any specific leverage activities geared towards creating measurable sales. When this is done well it can be very effective, as demonstrated by Volvo Car with their grassroots sailing sponsorships in the UK generating measurable sales.
Return on investment or return on objectives?
Media exposure is important to create brand awareness. However, too many companies use this as the only measure of sponsorship value. Sponsorship can deliver a variety of corporate objectives and multiple audiences both internally and externally. There are many effective ways to measure sponsorship value across all leverage activities. For example, if the objectives are increasing customer loyalty or improving corporate reputation, the measurement metrics need to be tied to these objectives. Too frequently this element is missing and leading to perceptions that sponsorship does not deliver value or return on investment.
If the sponsorship objectives are SMART – specific, measurable, achievable, realistic and have a timescale to be achieved – creating metrics for evaluation automatically becomes part of the process.
Brand tacking studies and audience impact research can measure changes in brand awareness and image perceptions. Employee attitudes and internal brand perceptions can be monitored through surveys and focus groups more effectively than through media valuation!
Measurement does cost time and money although the investment is worthwhile if it can increase overall impact of the sponsorship
A case study
The Pindar Group, was a leading catalogue and print company, engaged in yachting sponsorship for business-to-business purposes. The original objectives were to raise brand awareness, build a global image and differentiate the company in a highly competitive market place. Initially, primary measurements were through equivalent advertising value. Once Emma Richards became the first woman and youngest competitor to complete the 2003 Around Alone Race, Pindar engaged in a comprehensive review to benchmark the sponsorship impact both externally and internally.
This included customer interviews and employee surveys; TNS Sport conducted the media evaluation. The results showed high levels of brand name awareness (72%) with external audiences, and lower levels of brand familiarity. Concurrently, the media evaluation showed high levels of positive name mentions, and lower results in achieving specific core messages within the extensive coverage.
Customer perceptions were closely aligned with core values including being “different”, “global”, “committed” and “expertise.” However, within some subsidiaries, employee perceptions indicated there were some disconnects with the customer perceptions.
Subsequently, Pindar have addressed internal branding and developed new internal objectives. This has resulted in sponsoring a team in the Global Challenge 2004 race as a project geared towards internal brand integration, reinforcing core values. External communication objectives have been revised and new targets set within the sponsorship plan.
Yachting sponsorship can achieve both tangible and intangible business results, both externally and internally. Generating goodwill, loyalty and understanding through unique, exclusive hospitality experiences is a key strength of yachting sponsorship. It is relatively easy to establish numbers involved in a hospitality programme. It takes time and budget to establish the real short and long term impact on brands.
Too frequently companies aim only to establish numeric measures and an overall accountancy value for their sponsorship. What really matters is whether the overall sponsorship objectives have been achieved. In the immortal words of Albert Einstein we should remind ourselves that “not everything that can be counted counts, and not everything that counts can be counted.”