Does it measure up?

It’s debatable who first said: “What gets measured, gets done.” The maxim has been attributed to everyone from Scottish physicist Lord Kelvin to business management expert Tom Peters (“In Search of Excellence”). That’s a space of more than 130 years. The sponsorship industry hasn’t been trying to formulate a metric for that long, but it just seems that way sometimes.

The financial crisis of the late 2000s pushed demand for sponsorship metrics to unprecedented levels. Are we any closer to a Nielsen for sponsorship?

SportsBusiness Journal arranged a roundtable discussion in our New York offices and gathered seven marketers, who eat and sleep sponsorship daily, to get their take on industry metrics. From a property-side perspective, to insights from those whose businesses are based on metrics, here are highlights of what they had to say.

Photo by: Marc Bryan-Brown

Media exposure numbers have always been the bread and butter of this industry. What’s the state of the art there? Are we getting better measurement of media consumption now?

MASTER: Certainly, it’s evolving into a total audience metric, measuring content across multiple screens in and out of the home. The hope is that we will have that ready for the fall 2016 television season.

CRANDALL: We give our partners basic exposure numbers. What we are having trouble measuring is the passion level. If you are a sports fan, how can that be measured? If we can get that sort of index, it would greatly help us quantify our value to brands. We have not been able to figure that out.

The challenge on the property side is that partners of ours have multiple agencies, whether it’s marketing, media, PR or experiential agency. Our challenge is that they aren’t usually connected to one another, so what they’re asking for is usually never the same thing. If we could have anything, it would be a way to connect those groups, especially for the larger brands, all their different groups, because none of them seem to talk to each other.

SMITH: Everyone in this room is confronted daily by clients looking for more. It’s almost becoming a firehose of data. There’s definitely a demand from clients for an understanding of both tangible and intangible assets. There are strategies being introduced to measure those intangibles and understand their value. I don’t think there’s an appetite for a single metric on that. There’s always going to be a point of view supporting multiple measures.

MAESTAS: Our business is different in that we try to establish fair market value; what it should actually sell for, not based on media equivalency or earned-media measures. Ten years ago, I thought those measurements were going the way of the buffalo and the world would invest in measures of effectiveness and ROI. The amazing growth of Repucom tells me I’m wrong. The reality is that most of the dollars are spent in media, so anything that reflects a media equivalency allows an apples-to-apples comparison. Half of my business is still about assessing value, rather than impact.

The promise is one measure across all devices. What’s the current reality?

CRANDALL: Whether I was selling for the NBA, New York Road Runners or the Big East, I was always big on selling the association between your brand and my property. The first question I always get is “why is that worth anything?” As a seller, that’s deflating, because you know it’s at the center of your pitch. But there really has never been a way to measure that which people believe.

SOMMER: Cross-platform will be huge initiatives for all of us and the ability to marry that to passively connected purchase behavior is here today. The data exists to connect many of those dots.

SCOTT: We’re getting more and better context, but there’s no single currency. We still see how much more scrutiny sponsorship gets in comparison to advertising. But I don’t think brands are putting the same level of resources into really trying to understand the impact of sponsorships in the same way they would do other things, like their own brand tracking studies. They’ll spend hundreds of thousands just to pre-test ads before they are finally produced. We need to do that with sponsorships and figure out what impact they have.

Said rEvolution's Darren Marshall: “For 90 percent of our business, and probably the same for everyone else in this room, we’re ambulance chasers. You get a call from someone who’s got a deal coming up, or they’ve got a renewal or some rights holder has asked for a 25 percent rights increase.” Photo by: Marc Bryan-Brown

There’s a huge industry around media buying and selling. Shouldn’t some of that rigor be applied to sponsorship? Do any brands test a potential sponsorship the way they test creative before it gets out the door?

MARSHALL: For 90 percent of our business, and probably the same for everyone else in this room, we’re ambulance chasers. You get a call from someone who’s got a deal coming up, or they’ve got a renewal or some rights holder has asked for a 25 percent rights increase. But that’s life. The client with the forethought to test out their multimillion-dollar [sponsorship] investment just doesn’t exist. Or if they do, they’re like unicorns. I might have seen two in my career.

Raw exposure numbers are much better than ever. The more interesting thing to me is how you interpret those for a client. So, here’s a measure of what happens to a brand when it’s associated with the Big East and that’s 1 1/2 times the average across sports. That’s an easier number to buy into.

For their media, major advertisers are running ad trackers and brand trackers, and pre- and post-ad testing all the time. Those are no harder metrics than the ones we use. We beat ourselves too much and say why haven’t we ever found a holy grail, the one metric that will tell us everything? Advertising doesn’t have that, either. They are still using things similar to what we do, in terms of impact on brand opinion.

What’s the biggest misconception from clients about what can be measured and what can’t be?

MAESTAS: People consistently misuse the term ROI. It should mean profit against the cost of the marketing investment. People use it to mean media equivalency or any kind of share lift, so there’s a lexicon problem. Sometimes, we’re not even speaking the same language.

MARSHALL: If we were to kick ourselves, it’s because we don’t do enough to explain what can be done. We do enough NASCAR work that we can tell what the optimal number of race primary sponsorships you can have before you lose effectiveness. Or the value of a league sponsorship, when combined with team sponsorships. We can answer a lot of what-if scenarios.

The other thing is that while the average sponsorship deal lasts three years, the same person at the client isn’t managing it for three years. The days of the Tony Ponturo, who’s [at Anheuser-Busch] for 20 years, is long gone. Eighteen months isn’t unusual.

Measurement is serious business, but our roundtable participants had a little fun during the photo shoot. On the front row (from left to right): Stephen Master, Paul Smith and AJ Maestas. On the back row (from left to right): Tom Sommer, Ann Crandall, Darren Marshall and Donte Scott. Photo by: Marc Bryan-Brown

SOMMER: Sometimes it’s difficult for clients to narrow it down, where there are so many different potential ways to go. Narrowing down all the assets can be difficult.

SCOTT: You won’t find a consensus among any brand client about how they want to leverage a sponsorship and what success is. That’s a big issue for all of us. And you also have a continuum of folks [within a sponsor] which range from those championing a relationship to someone like the CFO, who’s being objective to someone who says, “If it doesn’t fit in my media plan, it doesn’t work for me.” That’s the biggest issue: you have so many different stakeholders at any sponsor and they all have a lot of influence.

SMITH: Our business has grown dramatically since the [2008] financial crisis. It’s the greatest thing that ever happened for our business. There’s pressure on brands and rights holders to deliver metrics now. Metrics are here to stay and if they don’t help anyone sell smarter, we’re not doing our job.

Are we really close to that hoped-for measurement that will track consumers across multiple devices?

MAESTAS: No, and I don’t think we will be the ones driving that change. We’re a subset of the media/marketing world and it will have to come from there. Programmatic media buying will be a big step there. Globally, Facebook and Google by themselves have the platform to know almost everything about everybody, outside of China, in the whole world. Repucom has become a metric for media equivalency over the past five or six years. On a global basis, it’s now a standard.

MASTER: We’re getting there. Everyone knows Nielsen on the watch side, but our buy side is a larger piece of

Said Navigate's AJ Maestas: “The reality is that most of the dollars are spent in media, so anything that reflects a media equivalency allows an apples-to-apples comparison. Half of my business is still about assessing value, rather than impact.” Photo by: Marc Bryan-Brown

Nielsen than the watch side. … We have scanner data that can show us purchase behavior of avid fans, casual fans and non-fans. From a sports-sponsorship perspective, that business has exploded over the last 24 months.

SMITH: The sports marketing industry is hard on itself. We’re out there battling in what’s largely a media environment. But when ESPN is out there selling their biggest packages, is it a media deal or a sponsorship? The lines are blurred, and rightly so.

My insight there is that no one remembers a bad TV ad, but they certainly remember a bad sponsorship. Bad TV commercials disappear; bad sponsorships bring down CEOs and CMOs, ala GM and Manchester United.

CRANDALL: The challenge is that so many buyers or prospective buyers want to buy [rights] for a year and test it out. That’s not fair. I think anyone here would tell you that it will take longer than a year to develop a meaningful, effective campaign. But no one can commit for more than a year and they have four or five agencies telling me different things.

We have been asking questions about sponsorship measurement for as long as SBJ has been around. Has the art, or the science of measurement, improved over that time?

MAESTAS: Certainly there’s more of at least addressing the measurement of outcomes, rather than just the value of property rights in a marketplace. We’ve come pretty far in the past 10 years, but I would still give us a C+ or a B-. The future of advertising now looks a lot more like sponsorship than it does like spots and dots. The 30-second spot is not dead, but it’s dying and it’s awfully sick.

Ninety-five percent of brands spending that $80 billion plus in the upfront market don’t have awareness problems. So if we can’t steal more dollars from measured media and put it into an integrated sponsorship, shame on us.

SMITH: Globally, the value of media rights have shot up drastically, but sponsorship rights have lagged behind them.

MASTER: Something encouraging that I’ve seen lately is that teams have a director or VP-level person in charge of [consumer] insights and fan analytics. That didn’t exist three years ago.

SOMMER: Branded content was a throw-in just a few years ago. Now that it’s measurable, there’s a huge demand.

MAESTAS: Teams are our worst clients. They are getting better people, staffing and budgets, but those don’t come anywhere near the level of people you are dealing with at a network or a brand or an agency. … We are getting more clients asking us what fits with their objectives and then go out and invest in those. A-B InBev has been very good about that. That should be basic, but it really wasn’t.

How early in the process does measurement come to the forefront?

MASTER: Our brand clients want to talk about our data and insights, but usually they do not want to have properties there. They feel like if they were, there would be some influence from them.

SCOTT: No one in this room should be surprised at the reactionary nature in the industry of assessing sponsorships. In one of our recent Turnkey polls (see page 17), we asked industry insiders about how they typically evaluate sponsorships: Is it more instinctive or more of a scientific approach? Only a third said it was scientific. So you’ve got an uphill battle. … In advertising research, there’s a line item in the budget that says we will measure these 10 things and we won’t create a finished ad until we hit X on a scoreboard. There’s not the same levels of rigor and discipline in sponsorship. And there’s also not the same budget.

SMITH: One big reason for that is that you can’t forecast the end of the story. Because of that, sports sponsorship is one of the great casinos of marketing. Does your team win or lose? Does your athlete go nuts? All those variables make it difficult and contribute to the crazy dynamic of sports, which also breeds the passion we all try to capture.
For brands, it’s not as simple, because sport is so unscripted. You can control a 30-second spot from soup to nuts — that’s the variable. Five or seven years ago, the death knell for someone trying to sell sponsorship was a meeting with the media agency. It’s the toughest job in town to equate sport’s intangible value with CPMs. Sports sponsorship has been the poor cousin to media for 30-40 years. It just can’t be measured the same way a 30-second spot can. It’s an emotional connection, and can be as dependent as much on activation as anything.

MASTER: Sports are lean-forward programming with strong emotional ties. We see that 2 percent of linear TV programming is sports, but sports generates more than half the social media conversation. We still chat with people at brands that think they can just buy the [supporting] media, but so many things tell us that sports are different. Lots of brands still don’t realize that.

If so much of social media is about sports, where are we there as far as measurement?

SOMMER: Certainly a lot of people are interested in insights based on social media, so we made an acquisition in that space recently. It’s still the Wild West out there in the social media space. You have large players like us and Nielsen, and you have people in lofts down in SoHo. A lot of the tools are complimentary in social media; we probably need to narrow it down to three or four providers.

MASTER: We’re all trying to get to cross-platform measures. But it shouldn’t be ignored that for sports, linear TV is as strong as it has ever been. So much of it is simultaneous use now. About 86 percent of people at one point during a month have a second device in hand at the same time. That’s a huge opportunity for advertisers, so we need to find a way there.

Said the Big East's Ann Crandall: “The challenge is that so many buyers or prospective buyers want to buy (rights) for a year and test it out. That’s not fair.” Photo by: Marc Bryan-Brown

Ann, how interested are your sponsors in tapping into your social media?

CRANDALL: Some are, some aren’t. We use social media to tap into a different audience. I have three 20-year-olds working for me and normally, they won’t watch a whole game on FS1, but they are going to follow our games on Twitter and monitor what people are saying about them. So far for us, it’s a marketing platform, not an income opportunity. In that we’re a new conference, in a lot of ways, I’m using it to find out as much about our fan base as we can.

SMITH: Properties have watched as social media platforms have absolutely minted cash off of sport. Certainly every meeting we have, someone asks, “What about social?” We deliver a media equivalency [measurement] for linear media and now for social. Rights holders are less able to use that social media measure. They still haven’t figured out how to make money from social.

Since we’re into measurement, what’s the most undervalued sports property?

MARSHALL: E-sports, that’s the future. One of our clients is Google/YouTube, where there are amazing levels of engagement. These [e-sports] athletes, if you want to call them that, are among the most-followed people on Twitter. However, most of the people at the top of corporations making marketing decisions don’t play video games — that’s the disconnect.

SMITH: The conundrum of e-sports is how the fans and players react to sponsorship. They can become very cynical, very quickly. We’ve seen how the X Games has worked hard to stay on the right side of the authenticity issue: what’s cool and what’s not. It’s more than sustainable, but from a brand perspective, the question is how it can grow into a commercial platform. Whether brands can play a legitimate role within e-sports is a question I’d love to see answered.

What measurement trend or story will you be following most closely over the next year?

MARSHALL: Experiential activation. More and more money is not going into sports, but into lifestyle activation efforts. We’ve worked with Samsung for years and they were the classic big sports event sponsor. Now, they are all about the Oscars, the Fallon show, Sundance and touching people directly. That’s a huge change.

SCOTT: It’s about moving to a systematic approach that can validate the impact activation has on leveraging those intangible sponsorship assets.

SOMMER: Moving to cross-platform measurement and using that data to buy and sell sponsorships. A lot of these assets were not measurable in one number. Now you have two large organizations [comScore and Nielsen] hell bent on providing that solution, so it will be interesting to see how the marketplace reacts.

SMITH: Governance of sport, athlete behavior and the pressure that’s going to be put on brands and when brands decide to walk. The reality is that with the power of social media today, there’s no way to hide; you’re exposed.

CRANDALL: As my TV viewership grows older, it’s about keeping them engaged, while getting the younger people in. College sports doesn’t have a lot of marketing money. There’s the ethics question as Paul said, and the student/athlete question in college sports.

MASTER: For any of us, it has to be moving toward measuring total audience — any device. If there’s a piece of content, we should be tracking those eyeballs. We’ve done some work with MLB on out-of-home, for example, during the World Series and the 18- to 34-year-old group showed a 45 percent lift for the Saturday night game. We looked at the NFL on Fox and saw a 20 percent lift in the same group. They may not have a traditional TV package, but they’re still watching sports on linear TV.

MAESTAS: The future of TV is what we’re putting all of our time and effort into. Sports will be the leading indicator, and there’s the impact of over-the-top to be accounted for. As far as measurement, we need to do a better job with our effectiveness story. We have great evidence on how effective sponsorships are when they are done right. They are dogs when they are done wrong. We just haven’t made a great argument yet about that efficiency versus traditional media dollars.