If a brand wants to invest in a sponsorship that is broadcast/streamed, the main way that price is determined is by calculating the value of the media exposure it delivers (basically the value generated by the exposure of a sponsor’s logo on TV or online). Once value is determined, price negotiation can begin.
Media value has always been major currency in sponsorship. But it has lived a charmed life.
Once you take a step back and interrogate its usefulness, a very different picture emerges. It’s about time we were honest with each other – media value is inaccurate, its impact vastly is overestimated and completely out of the sponsor’s control.
Firstly, there is no universally agreed way of calculating it. This ensures that the outputs regularly differ, often leading to a case of “he said, she said” when trying to negotiate price. Furthermore, media value is driven primarily by TV audience figures which, in many sports, are flat or in decline because broadcast sport increasingly sits behind a pay wall.
Secondly, the value falsely assumes that everyone watching notices the sponsor’s branding. Unlike a TV advert, sponsorship is passive. It takes longer to build recognition among fans (which is why it is key to activate/develop campaigns that are remarkable, useful or entertaining). Equally, people don’t easily absorb information that is extraneous to the main event. Ask any long-standing football fan to name four of the seven main Premier League partners and you’ll see what I mean.
Third, media value is a measure of efficiency rather than effectiveness. It tells you whether the investment is sensible or whether it provides good value in the short term.
It doesn’t even come close to showing how the sponsorship will impact a sponsor’s business over the short to long term.
Too many rely on this spurious output instead of properly correlating the impact of the sponsorship on master brand health or purchase behaviour/sales. Surely it would make better sense to value sponsorship based on its ability to deliver real business rather than putting an arbitrary value on logo exposure?
Sponsorship definitely has its role to play within a broad communications strategy. However, insularity often prevails over good sense. Furthermore, the ‘rational’ processes deployed to discern value are fundamentally incompatible with the way that people actually behave while they are watching a match (which is irrationally most of the time). The upshot sees an industry that often invests time, effort and budget in the wrong things – things that don’t really matter or that don’t effectively reach the people brands are trying to talk to. Acknowledging this will set every sponsor up for success more readily by diverting focus onto getting people to notice that you are there.
The Secret Strategist works in sports marketing