The SponsorPulse Guide to Sponsorship Valuation
- October 20, 2022
- SponsorPulse Staff
Each week, it seems like key players are making landmark deals with notable names. From Lebron James becoming the first NBA athlete to earn $1B while still in the league, to Crypto.com signing the Staples Centre for over $700M, the sponsorship space can read as an expensive industry to navigate.
The reality is that while flashy partnerships make alluring headlines, there’s so much more that goes into a sponsorship deal beyond the glitz and glamor of dollar signs. In fact, due to the public emphasis on big names and bigger deals, inflated pricing is now commonplace, leaving many professionals adrift in their understanding of market value.
So the million, or multi-million dollar question is: What's a sponsorship worth?
At SponsorPulse, transparency is our north star. Our Opportunity Value feature empowers our community to drown out the noise and establish fair market value to build sponsorship deals. The best part? It’s entirely consumer driven.
Here’s our 3-step guide to fair market value:
Step #1: Identify Engagement & Momentum
Who’s engaged with XYZ property? How many of them will remain interested next year? How many more will become interested based on the property’s momentum? These questions live top of mind for many marketers in the sponsorship space.
Luckily, we’ve got answers. The first step towards establishing a fair market value for your sponsorship initiatives is to identify engagement and momentum metrics. Housed in our robust database of consumer insights, these key metrics empower you to understand the current reach of a property, while forecasting how many (if any) new people you’ll be able to reach over the coming years through sponsorship.
Step #2: Establish Sponsor Awareness & Impact Targets
Is your portfolio performing at a high level? 69% of sponsorship professionals believe that demonstrating the value of sponsorship is the greatest challenge for brands. That’s why we help you quantify your efforts by setting awareness and impact targets for your sponsorship initiatives.
Our Impact Reports allow brands to measure and communicate their efforts to ensure they have a clear picture of how their sponsorship investments are performing. Properties, on the other hand, leverage findings to deliver value to partners by optimizing their asset mix, maximizing retention in the process. The database of benchmarks we’ve cultivated from our Impact Reports identify what the target sponsor awareness should be based on the type of assets that a brand is getting. For instance, if your brand is putting your name on a building, our benchmarks confirm that this selection will be more beneficial than if you’ve purchased a rinkboard placement alongside a slew of other brands.
Once we’ve projected the number of people who will become aware of a sponsorship, we leverage our consumer database to provide context on what percent of those people we can reasonably expect to be impacted. Of course, if you activate meaningfully, the result could be greater. If you don’t activate at all, it will certainly be lower. Leveraging an impact benchmark, directly from the consumer, gives us a realistic and fact-based anchor.
In a burgeoning market, it’s never been more important to lead negotiations by establishing a baseline of mutually agreed upon impact targets using standardized metrics that can be trended. This ensures that all parties are enthusiastic about where the partnership is heading.
Step #3 Determine Target Spend per Person Impacted
Nobody wants to underestimate their value, and nobody wants to be overcharged. At SponsorPulse, our Opportunity Value tool provides unbiased and consumer-based valuations. By leveraging our deal database of more than a thousand sponsorships to help identify the approximate cost per person impacted, Opportunity Value provides a general range of what a brand should expect to spend.
After familiarizing yourself with the data, you’ll stand prepared to defend your investment requests, enabling you to forge powerful new partnerships, or glide right through renewal season with the grounds to ask for what you’re worth.
The next step is looking at what specific assets are worth, which our partners at Turnstile are all over.
Reach out to our team today to get started!