Kadisco: Cycling, Marketing, Sponsorship, Social Media

Debunking traditional sponsorship measurement

Posted on 14. Sep, 2009 by Josh in Sponsors, Sports Business

Jonathan Vaughters tells Joe Lindsey: “…we’re pushing like $90 million in [media exposure] value. [Garmin-Slipstream] may be the highest total publicity to investment dollar ratio in cycling ever.”

Kim Skildum-Reid of Power Sponsorship: “Exposure is a low-value mechanism that says nothing about whether the sponsor has changed their target markets’ perceptions or behaviours.”

I don’t mean to single out JV or Slipstream; they’re employing a widely used metric as calculated by a generally respected sponsorship agency, IEG. I’m certain that Slipstream reports more detailed and more varied information to their sponsors, and that companies like Garmin do plenty of work on their own to measure the effectiveness of their sponsorships. But the Media Value Myth comes up frequently in cycling, despite its inherent flaws. Here’s my take.

Traditional sponsorship measurement

If you’re running a cycling team (or anything else that relies on sponsorship), the traditional centerpiece of the post-season report that you send to your sponsor is an approximation of how much “exposure” the sponsor received. The most basic unit of measurement is the impression, which theoretically reflects each time that anyone reads, sees, or hears the sponsor’s name in the media, on a jersey logo, etc. I wrote a few months ago about why the impression isn’t a good measure of anything.

What evolved from calculating impressions was calculating media value. If you know how much it costs to advertise in the outlets where the impressions come from, you can estimate how much the coverage is worth in dollar terms. For instance, 15 seconds of direct coverage on a TV show where a 30 second spot costs $100,000 is worth $50,000. Do that for every bit of media coverage, add them all up, and you get your media value. The number may sound impressive but there’s not much substance.

What it actually measures

Let’s say you work for a big brand or an ad agency and you’re comparing what you spend to advertise in two different magazines. Would you say, “A full page in Magazine A costs $1,000 and a full page in Magazine B costs $10,000. Therefore, Magazine A offers 10 times the value per dollar.” Of course you wouldn’t, because it doesn’t take into account how many people read the magazines or whether they’re the kind of people you want to advertise to. Nor does it measure how effective your ad was at changing their perception of your company or their purchasing habits.

But the above comparison between Magazine A and Magazine B is all that you get from comparing the cost of the sponsorship to media exposure value. It’s a big gaudy number, but value in the general advertising marketplace doesn’t tell the sponsor anything about their specific objectives. Take the former Team CSC for example. The value of airtime on Versus or France2 was not particularly relevant to the sponsor, because the only places where CSC would actually pay to advertise (according to my friend there) are The Wall Street Journal and The Economist.

Some other ideas

Kim Skildum-Reid has posted a 10-minute video outlining some current thinking in how sponsors figure out if they’re spending their money wisely. Her key points are:

• Sponsors shouldn’t rely on others to do the measuring.
• Don’t measure exposure for its own sake; measure whether exposure changed consumer perceptions or behaviors.
• There is no single dollar-for-dollar number that will tell you whether the sponsorship was worth the money.

You can check out Kim’s blog here at the Power Sponsorship site.

Photo: http://www.flickr.com/photos/62681247@N00/ / CC BY-SA 2.0