Do sponsorships really work?

The global sport sponsorship industry has undergone a good recovery since the Covid pandemic, and is expected to grow in value from $57bn in 2020 to $89bn by 2027. However, of concern is that most marketers say they don’t really understand whether sponsorships work or how to measure the return on the sponsorship investment.

A recent Kantar webinar, put the spotlight on how businesses should be measuring sponsorship campaigns.   

Analytics director for MEA Insights Division at Kantar, Sagar Ramsinghani, said a successful sponsorship can have a variety of positive effects on a business, including driving engagement and connections with customers, shifting brand perceptions and driving sales.

When it comes to measurement, marketers are starting to take a more holistic view of the sponsorship investment, which includes linking it to financial outcomes, he says, adding that there is clear evidence that “the long-term effects from sponsorship programmes are often greater than the direct or immediate effects”.

Executed correctly, a sponsorship programme should deliver a positive return on investment and positively affect consumer perceptions of the brand. However, to achieve a positive return on investment requires having all the right fundamentals in place. This starts with choosing the right sponsorship property,  running  a well-executed multimedia campaign accompanying the sponsorship and having the ability to link the effect of the programme back to business outcomes.

In essence, what is required is a 360° plan that includes identifying the sponsorship property with the best strategic fit for the business. The sponsorship property and the brand need to have a similar vision and the same values in order to be compatible, said Kantar ROI Practice partner, Alfredo Troncoso.

Successful sponsorship programmes, he said, typically share a number of commonalities, including well-co-ordinated activation plans, carefully selected assets, the conducting of regular measurement and impact assessments, and measurement of the return on investment. Given that they understand which elements work better than others they’re able to place a greater emphasis on what works.

However, activations are what will make or break a sponsorship. Troncoso recommended spending a minimum of 50% of the sponsorship fee on activations.

What brings the whole programme together is linking effectiveness with financial outcomes. This allows marketers to measure the return on their sponsorship spend compared with the return on other marketing investments.

The big take-out: Kantar says measuring the effect and return on investment of sponsorship programmes can help brands improve and optimise their activations.