NEW YORK(July 10, 2018) — Marketing expenditures on sponsorship have increased considerably over the past several years, but progress in measuring and assessing sponsorship’s business impact has been marginal, according to a new study.
The report, “Improving Sponsorship Accountability Metrics,” was conducted by the ANA (Association of National Advertisers) and MASB (Marketing Accountability Standards Board) to provide greater insight and guidance into sponsorship measurement.
The study said that total sponsorship spending in North America is estimated by ESP Properties (formerly IEG) to be $24.2 billion in 2018. This is up 41 percent since 2010, the year of the ANA’s first sponsorship measurement survey, and up 22 percent since a follow-up 2013 ANA study. However, the study revealed that only 37 percent of respondents reported having a standardized process for measuring their return on sponsorship.
“Despite the continued growth of sponsorship investment and the repeated sentiment from marketers that there is a need for improved measurement and assessment, there has been little progress toward this goal,” said ANA CEO Bob Liodice. “It’s time for the industry to substantially upgrade sponsorship accountability, and this report is a material step in the right direction.”
The study also found that among respondents with a defined measurement process, 57 percent have a sponsorship measurement budget. Of those, most spend 5 percent or less on sponsorship measurement as a percentage of sponsorship rights (i.e., the cost of the sponsorship itself, not including activation costs).
The survey also found:
- Top metrics used to measure ROI (return on investment) of sponsorship are total sponsorship investment financial return, total media exposure financial return, and product or service sales. ROI metrics are focused on financial outcomes.
- Top metrics used to measure ROO (return on objective) of sponsorship are awareness of the brand, awareness of the company’s/brand’s sponsorship, attitudes towards the brand, amount of total media exposure, and amount of social media exposure. ROO metrics are focused on behavioral outcomes.
- The need for validated results for sponsorship initiatives has increased in importance for 78 percent of respondents, indicating that marketers are always under significant pressure to validate results.
- Only 40 percent of respondents write expectations about sponsorship measurement into contracts with properties, a finding that is interpreted as a missed opportunity by client-side marketers. “The survey points out the continuing, unmet need for more sophisticated sponsorship measurement and valuation practices,” said MASB President and CEO Tony Pace. “Developing and disseminating such practices is the next step for the MASB’s Sponsorship Accountability Metrics Project team.” CONCLUSIONSThe study highlighted the ongoing need for advanced sponsorship measurement, and confirmed only slight progress had been made toward reaching that goal. In all cases where comparisons were available, results did not change this year versus prior surveys. The report also concluded that sponsorship accountability is framed in three strategic areas:
- Media equivalency, which measures the number of impressions generated and how much similar levels of impressions would cost
- Return on objectives, which addresses brand and behavioral outcomes
- Financial attribution, which measures the financial outcomes generated from sponsorships and how they compare to other marketing investments. Sponsorship accountability is strongly recommended to move in this direction.
The report determined that brand preference should be a key sponsorship metric because it plays a pivotal role in financial outcomes and has the highest correlation to sales and share, even more than metrics such as awareness, brand loyalty, purchase intent, advocacy, and brand relevance. According to the MASB, brand preference indicates the strength of a brand in the hearts and minds of consumers and represents which brands are preferred under assumptions of equality in price and availability.
Going forward, the report recommended that marketers begin challenging the measurement community to assist with additional perspective and prioritize brand preference attribution for sponsorship, in addition to developing guidelines, benchmarks, and best practices.
A copy of the complete study is attached.
ABOUT THE ANA
The ANA (Association of National Advertisers) makes a difference for individuals, brands, and the industry by driving growth, advancing the interests of marketers, and promoting and protecting the well-being of the marketing community. Founded in 1910, the ANA provides leadership that advances marketing excellence and shapes the future of the industry. The ANA’s membership includes nearly 2,000 companies with 25,000 brands that engage almost 150,000 industry professionals and collectively spend or support more than $400 billion in marketing and advertising annually. The membership is comprised of more than 1,100 client-side marketers and more than 800 marketing service provider members, which include leading marketing data science and technology suppliers, ad agencies, law firms, consultants, and vendors. Further enriching the ecosystem is the work of the nonprofit ANA Educational Foundation (AEF), which has the mission of enhancing the understanding of advertising and marketing within the academic and marketing communities.
ABOUT THE MASB
The MASB, the Marketing Accountability Standards Board, brings together marketers, measurement and media providers, industry associations, and business academics for the common goal of increasing the contribution of the marketing function through the development of accountable marketing standards and practices that drive business growth. MASB project teams are taking on key issues like Brand Investment and Valuation, Improving Financial Reporting, and Continuous Improvement in Return. The Common Language Marketing Dictionary has become the definitive source for marketing terms and definitions. The MMAP Metric Catalog is the only independent, objective resource for assessing the validity of marketing metrics. Visit themasb.org.
The television industry's top news stories, analysis and blogs of the day.