Sponsorship in sports is a major revenue generating opportunity. In 2013, sports sponsorships grew to $20 billion, about one-third of US TV advertising and about half of digital sponsorship. As you can see, there are some massive amounts of money spent on sports sponsorships, but are teams measuring their ROI correctly?

Recently, McKinsey & Company explored what teams and companies should be doing to make sure these sponsorships are effective and a good return on investment. The first metric that McKinsey suggests is to measure cost per reach. Cost per reach is the number of people exposed to the sponsorship in person as well as through various media, including mobile, print, television etc.

Another metric that McKinsey suggests using is unaided awareness per reach. This metric involves examining how much money is spent on actual activation of sponsorships versus how much is spent on just getting the rights to them. Increasing activation can increase unaided awareness and lead to higher brand recall amongst fans and consumers.

A third metric that McKinsey suggests using is sales/margin dollars spent. This measures how sponsorship spending can impact sales efforts. This can be often difficult to measure, however there are some effective approaches to doing so, including using econometrics and tying spending on sponsorships to key qualitative marketing measures and then tracking the impact of each variable on short- and long-term sales.

Long-term brand attributes are also important in determining your sponsorship ROI. Brand strength can contribute 60 to 80 percent of overall sales, making it incredibly important for teams. Sponsorships have the potential to reach beyond short-term sales to build a brand’s identity and strength, which can be a good measure of ROI for sponsorships.

Indirect benefits can also be a good measure of ROI from sponsorships according to McKinsey. Sponsorships can stimulate things like indirect sales, which can become important for teams and companies. Many people can often overlook these things, however, they should be included when determining ROI from sponsorships and remain important because of this.

Much of what McKinsey discusses can be measured and improved by having a great mobile app with a strong ad inventory. Cost per reach can be improved by having more people exposed to sponsorships through an app, unaided awareness is improved through activating sponsorships on mobile, using sponsorships to aid sales of merchandise and tickets through the app, and building your team’s brand through the app. To find out more, please contact us for a demo today!

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