Understanding the ROI of sports sponsorships
In the realm of marketing, sports sponsorship stands as a titan, captivating audiences worldwide with its blend of competition, engagement, and passion. Yet, measuring the return on investment (ROI) of such sponsorships often presents a challenge.
In this article, we explore how businesses can quantify the impact of branding positioned on jerseys, stadiums and televised broadcasts. We delve into the strategies, metrics, and real-world insights behind measuring the ROI of sports sponsorship.
David Rothenhaeuser
Published on September 4th, 2024
In this Insight:
Understanding the Landscape
Sports sponsorships encompass a vast spectrum, ranging from individual athletes to global events. Each avenue offers unique opportunities for brands to connect with audiences. For instance, associating with a popular athlete can enhance brand perception, while sponsoring a major sporting event can bolster brand visibility on a global scale.
Below, we look at how brands determine their return on investment within their sport sponsorships, decipher the various metrics and how different brands measure the success of their sponsorship agreements.
ROI metrics: an overview
Brand Exposure
Impressions: Tracking the number of times a brand logo or message is seen by viewers, whether on jerseys, signage, or digital platforms.
Reach: Evaluating the potential audience size exposed to sponsored content, considering factors like TV viewership, social media engagement, and event attendance.
Media Value: Calculating the estimated cost of achieving similar exposure through traditional advertising channels.
Brand Engagement
Social Media Metrics: Analysing likes, shares, comments, and mentions related to sponsored content across various platforms.
Website Traffic: Monitoring spikes in website visits during or after sponsorship activations, indicating heightened interest or engagement.
Surveys and Feedback: Gathering direct feedback from consumers to gauge brand recall, sentiment, and purchase intent.
Financial Impact
Direct Sales: Tracking any increase in product sales directly attributed to sports sponsorship activities.
Indirect Revenue: Assessing the long-term impact on brand loyalty, customer retention, and market share, which may translate into sustained revenue growth.
Brand Exposure
Brand Exposure consists of a number of factors, including:
Impressions: Tracking the number of times a brand logo or message is seen by viewers, whether on jerseys, signage, or digital platforms.
Reach: Evaluating the potential audience size exposed to sponsored content, considering factors like TV viewership, social media engagement, and event attendance.
Media Value: Calculating the estimated cost of achieving similar exposure through traditional advertising channels.
Mastercard's sponsorship of the UEFA Champions League exemplifies leveraging a global platform to enhance brand exposure and consumer engagement. Through integrated marketing campaigns and exclusive fan experiences, Mastercard deepens its connection with football enthusiasts worldwide.
Mastercard brings fans closer to the action through its sponsorship of the UEFA Champions League. Its cardholders across the globe are connected to exclusive, priceless experiences, including the once-in-a-lifetime chance to see their children walk out onto the pitch with some of the greatest teams in Europe as a player mascot.
There is a subconscious element here as well, by seeing Mastercard branding in Champions League games (and highlights) over a 30-year period, it may make consumers opt for Mastercard in future without even realising.
Brand Engagement
Engagement goes one step beyond exposure, consisting of:
Social Media Metrics: Analysing likes, shares, comments, and mentions related to sponsored content across various platforms.
Website Traffic: Monitoring spikes in website visits during or after sponsorship activations, indicating heightened interest or engagement.
Surveys and Feedback: Gathering direct feedback from consumers to gauge brand recall, sentiment, and purchase intent.
Red Bull's strategic focus on extreme sports sponsorship epitomises its "gives you wings" ethos, aligning with adrenaline-fuelled activities like Formula 1 racing, cliff diving, and snowboarding.
A lot of people engage with Red Bull’s brand without ever having the desire to purchase the energy drink. Through extreme sports, the brand encourages consumers to push their boundaries and seek excitement. Red Bull becomes more than a product, it becomes a lifestyle choice for those who crave adventure.
Red Bull's investment in extreme sports extends beyond those simple engagement metrics, fostering a brand identity synonymous with adventure, energy, and innovation. This intangible value fuels a buzz online and at its events.
Red Bull has expanded its catalogue of sports and events into padel and America’s Cup sailing, and it has got to a point where being endorsed by Red Bull is more powerful for the event than the other way around.
Financial impact
Then the final step, when you can see some of that investment coming back:
Direct Sales: Tracking any increase in product sales directly attributed to sports sponsorship activities.
Indirect Revenue: Assessing the long-term impact on brand loyalty, customer retention, and market share, which may translate into sustained revenue growth.
Nike's partnership with Michael Jordan transcended mere endorsement, spawning the iconic Air Jordan brand. Despite retiring from basketball in 2003, Jordan's cultural influence continues to drive sales, with the Air Jordan line generating billions annually.
In 1984, the Air Jordan shoe was the first collaboration between Nike and rising star, Michael Jordan. Through multiple product innovations, expansions, as well as continued collaborations, the Jordan team has turned Air Jordan into a global brand in its own right.
Beyond immediate sales figures, Nike's enduring association with Jordan reflects in brand loyalty, market dominance, and cultural relevance, showcasing the long-term ROI of athlete endorsements.
Looking at how Nike and Jordan have dominated the market in basketball, no other brand comes close. Not settling there, Nike and Jordan identified that football has a similar viewership base, and in certain places, culture, to basketball. Nike partner club Paris Saint-Germain was the perfect fit, and released a whole PSG-Jordan range, including two Jordan branded European kits for the 2018-19 season.
The Path Forward
The above mentioned metrics are just a few of the many key elements needed for brands to understand the impact of their sponsorship agreements.
Measuring the ROI of sports sponsorship requires a multifaceted approach that goes beyond traditional metrics. By embracing data analytics, consumer insights, and strategic partnerships, brands can unlock the full potential of their sponsorship investments.
Going beyond measuring and fully understanding ROI entails a blend of quantitative analysis, assessment, and strategic foresight. While tangible metrics provide a glimpse into immediate impact, the true measure of success lies in the longer term resonance and value generated for brands and consumers alike. Brands such as Mastercard, Red Bull and Air Jordan have built affinity, engagement and loyalty through sponsorship over a sustained period, and it’s precisely this long-term commitment that has rewarded them with meaningful resonance with consumers.
As the importance of sports sponsorship continues to grow, more businesses will look to learn from the decisions these brands have taken in sponsorship. Here, key lessons surrounding adaptability, innovation, and creativity will remain paramount in driving meaningful ROI and lasting brand impact, especially in the more volatile digital age.
