Brian Kim, CEO of Relo Metrics, explains why real-time data is the key to unlocking ROI in the hard-hit sponsorship sector.

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With inbuilt fan loyalty and viral moments to spark a lifetime of recognition, sports sponsorship is the heavyweight in any brand’s marketing arsenal. But in a digital age where data rules all, its impact is falling short.

Digital ad spend overall is soaring – marking a 49% year-on-year increase. By comparison, sponsorship spend, already hard hit by the pandemic, is facing further cuts. WARC reports that over half of brands making budget reductions this year anticipate that they will reduce sponsorship activity. To make matters worse, sports sponsorship suffers from an image problem: 44 percent of marketers are unable to pinpoint its impact on brand performance, making it the least understood media channel when it comes to ROI.

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A value that’s lost in translation

When you look at the scale of sporting events today, the fact that sports sponsorship is being overshadowed is puzzling: the NFL broadcasts that average 16.6 million viewers; the Olympics coverage that sparked more viewing requests than the entire population in the UK; the Women’s World Cup Final that was the most-watched soccer match in US history.

I believe the essence of the problem lies in performance metrics, and the fact that sports sponsorship teams struggle to prove their worth. The world digital advertisers operate in is spectacularly agile. In an always-on environment, any issues can be solved mid-campaign. Ad spend is maximized to reach specific audiences at scale, drawing on a wealth of real-time data. It’s therefore easy for brands to point to the immediate impact of a campaign when lobbying for future budget share. 

By contrast, sponsorship brands have been reliant on sports teams to typically deliver insights, which happen sporadically at best with mid or end of season performance reports. Problems cannot be detected straight away, and opportunities to optimize partnerships are missed by the time they are identified. Sports teams are ill-equipped to think about maximizing value back to each and every one of their sponsors.

To add to the confusion, the sector is beset by a lack of industry-standard KPIs. With different companies using their own success measurements, sponsorship buyers and sellers are not speaking the same language. Time is wasted discussing what is the source of a metric or how it is calculated, rather than working on how to create more value for all parties involved. As a brand, if you have a portfolio of sponsorships that cross 3-4 different teams or more, you may get 10-12 different sources of data across all of your partnerships, making the ability to compare across your portfolio of partnerships near impossible. With this kind of inconsistency at play, it’s no wonder that decision-makers struggle to grasp the value of sponsorship spend.

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Marketing with meaning

The most frustrating part of this dilemma is that sports sponsorship is arguably the most powerful brand marketing tool. Seen side-by-side with the nebulous world of influencer marketing, or the lack of clarity that plagues paid search ROI, it has gravitas on its side. 

Few marketing strategies can rival the kind of deep-rooted brand loyalty generated by aligning with the Boston Red Sox, MLB’s most committed fan base, for example. Nor will they come close to the sheer euphoria of a moment like British teen sensation Emma Raducanu winning the US Tennis Open. 

In the scattergun sphere of digital marketing, sports sponsorships carry the potential for lasting brand resonance. And, given that they are now far more than a linear TV experience, this benefit is amplified in a digital era: leading to global audience reach in related opportunities such as gamification, along with viral moments that last for decades on Instagram or YouTube. 

What is lacking at the moment is the data that allows brands to calculate this value. With a full suite of data in the bargain, sponsorship campaigns become instantly more appealing, because their ROI can be optimized in real time. 

Take tool manufacturer Stanley Black & Decker. The brand saved itself $1.3 million in almost-lost media value when real-time data revealed, at the beginning of a soccer season, that their logo was being blocked from some angles by a goal post. The same campaign benefited from a viral moment shared on another team’s Instagram page, which ended up being worth an estimated $20,000 in brand exposure. 

Bridging the data gap

In order to illustrate the value of their investments, sports marketers must adopt the mindset of a digital marketer. This means demanding standardized metrics from partners that align with set KPIs at the start of any campaign – then analyzing that data in real-time, using metrics such as visibility, and reach across all campaign channels. 

A recent McKinsey report found that sports sponsorship executives who implemented a comprehensive approach to gauge the impact of campaigns in this way can increase returns by as much as 30 percent.

Data, then, is the Achilles’ heel of sport sponsorship; and it’s also the means by which brand teams can reclaim their share of the marketing pie. At a time when AI-powered analytics is changing the face of marketing, the sports sponsorship industry should come together to push for consistent, real-time performance data. Creating this standard will allow marketers to prove and optimize ROI, ensuring this time-honoured vertical gets the budget it deserves. 

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