The New Age of #Olympics2014

Sponsorship has always been a key part of the Olympics experience. First of all, it helps athletes afford the expenses of non-stop travel. And, for big brands, it has always been a great way to gain brand recognition with consumers at home, glued to their TV’s for hours at a time.

And for the International Olympic Committee, it’s a great business. With a limit of 35 official exclusive sponsors in 2012, the top corporate sponsors paid over $100 million each to participate. The next tier paid $40 million each. But, while the sponsorship spend has been rocketing to record heights, technological progress has enabled even faster changes in both viewer habits and our ability to measure the results. So what are these trends and what do they portend for Olympic sponsorship in 2014 and beyond?

Viewership Changes

Over the past few years, the TV and cable industries have seen a rapid shift towards “anytime, anywhere” viewing, especially among the highly desired digitally savvy consumers.  A lot of viewers now consume programs (even sports) in a time-shifted manner, on mobile devices, with at least two active screens – and frequently, all of the above!    This year, NBC has decided to aggressively get ahead of the trends and dominate the shift to digital.  NBC Olympics, a division of the NBC Sports Group, made a digital bet that is paying off.  They are offering:

  • Exclusive live streaming: Coverage in the US offering over 1000+ hours of streaming. Not only has this given them total control of US digital streaming rights of the Olympics, but also the ability to control of what ads appears as you are watching the Olympic coverage online.
  • Two mobile apps: These are featured apps on the iPhone for over 2 weeks with over 1 million downloads in the iOS app store.

Measurable Engagement

Other huge benefits of the “anytime, anywhere” viewing are the increase and measurability of mobile social engagement.  According to Hashtracking, there are record social engagement numbers for key hashtags: #sochi2014 (3.3M tweets), #teamusa (472k tweets), #sochiproblems (371k tweets).  A large share of these are coming from mobile devices. And, brands are not merely measuring impressions. They are also measuring the experience and fan bases.

Sponsors are also asking athletes to use their social media accounts to promote their brand. The agents for US figure skaters Ashley Wagner and Gracie Gold both say sponsors draft some of their tweets, plugging their brands.

The trend of consumer engagement with content in a social and mobile environment is rapidly changing how brands conduct and measure their sponsorship.

Social Media in Sponsorships:
What’s Old is New Again

The first time I heard the word “sponsorship,” the very first thing that came to mind was sports events that I had attended where banners hung with logos of local companies, a.k.a. “sponsors.” If you’re anything like me, that’s pretty much where my knowledge of sponsorship started and ended.

Nowadays, those of us who work in the general sphere of sales, marketing and marketing research, and touch our customers in one way or another, are familiar with how major companies use sponsorships of events to move customer relationships from the beginning of the sales pipeline straight through to closing a new relationship.

Recently, there’s been a lot of talk about how this old, tried-and-true method of marketing can leverage the much newer world of social media to create even deeper relationships with customers and prospects. There’s also mounting pressure from marketers to justify their huge sponsorship budgets to their CEOs and Boards. For example, Pepsi spends nearly $340 million dollars per year on “activating” sponsorships such as the NFL and endorsing athletes and stars such as Beyonce.

Who at Pepsi is on the hook to prove that the $340 million dollars was actually worth it, year in and year out and how do they prove it? This is big business with high stakes.

The challenge is that sponsorships are rarely the most efficient way to purchase eyeballs but are often the best way to generate sales.  So, given this dilemma, what’s a marketer to do? How do you bridge the gap between the power of sponsorship to generate sales and measure the power of social media within a sponsorship activation to generate awareness and consideration for your brand?

Other forms of marketing (TV, Digital, etc.) have industry standard metrics and dashboards galore, to prove that the spending was worth it. Here are 3 suggestions that can be deployed:

  1. De-prioritize raw tallying of media values such as TV and digital that surround a sponsorship
  2. De-prioritize measuring awareness and consideration of your brand via expensive, time-consuming surveys alone
  3. Treat your sponsorship like a political campaign with a finite beginning, middle and end (pre-, during and post-sponsorship) and increase prioritization of measuring all of this in real-time

Analyzing Sponsorship ROI

In 2012, more than $50 billion was spent on sponsorships.

To put that in perspective, only $4.7 billion was spent on all social media advertising.

So, sponsorship is 10x larger than the entire social media industry. Furthermore, sponsorship is the fastest growing form of traditional marketing. The reason for such strong growth is that sponsorship is a forerunner of the future of all marketing — highly-appealing content sitting at the center of a cross-screen, cross-channel marketing effort.

However, the dirty little secret of this rapidly growing $50 billion market is that no one knows what value all of that spending actually drives.

The difficulty in measuring sponsorship ROI has been aggregating disparate data in order to get a good picture of sponsorship effectiveness. Further, much of these data types have been time consuming to gather via surveys – until now.

 photo SponsorshipROI_zpsc47ad7cc.png

Sponsorship ROI 1.0

For many years, sponsorship ROI analysis entailed a tallying of media values generated through the various activations of a given sponsorship. For example, a sponsorship might involve placing a billboard-style sign on the outfield fence of a baseball stadium. This sign will appear on TV and other media for a certain number of times during the course of a sponsorship contract. Each of the impressions generated has a certain value (often expressed in terms of CPM’s). A sponsorship might include dozens of various assets that offer such media value and, thus, the problem with pure media value analysis is two-fold: 1) It over-values TV sponsorships since the impressions are most easily tracked; and 2) All impressions are NOT created equal. Sponsorships are rarely the most efficient way to purchase eyeballs but are often the best way to generate sales.

Sponsorship ROI 2.0

After years of conducting sponsorship ROI analysis for advertisers, sponsorship agencies came up with important, tangible insights beyond media values – these include measuring leads-generated and social interactions. Furthermore, opinion and consideration lift were also measured via surveying and polling. Thus, adding these value points to the mix proved relatively easy. Sponsorship ROI analysis 2.0 essentially involves a tallying of BOTH media values and lead values while also reporting (in a very unstandardized way) “intangible” metrics. This method is more accurate than sponsorship measurement 1.0, but it lacks discipline and is easily gamed.

Sponsorship ROI Measurement 3.0

SponsorHub has pioneered a new approach to sponsorship measurement that builds upon the 2.0 version – we utilize real data science to turn “intangibles” into very tangible, measurable metrics. An important technological innovation that makes this possible is “SSNT.” Our SSNT technology interprets to conversations taking place across Search, Social, News and Topical sites. This removes the need to do rudimentary and expensive surveys while also allowing brands to optimize sponsorship and paired media campaigns in real-time. These data can then be coupled with traditional tangible values to form a full ROI picture. What was once a dark art – sponsorship ROI analysis – has now truly become a science that can be applied easily to all programs.


Sponsorship Negotiation Tricks: How to Maximize your 2013 Sponsor Dollars Webinar

There’s a lot of science that goes into securing a well-designed sponsorship. Much is at stake here- your brand, your time, your investment. We’re hosting a webinar on Thursday, December 6 11am PCT, 2pm EST where our SponsorHub co-founder and CTO Andrew Reid, will explain how to minimize risk, and make the most out of your sponsorship dollars in 2013.

Previously, Andrew was VP, Products at Kaleidoscope, a division of Interpublic Group (IPG), where he spearheaded the creation of IPG’s SponsorScience product, a platform for evaluating and managing major sponsorships for Fortune 500 companies.

You will learn:
- Sponsorship negotiation tricks and best practices
- How to effectively manage your sponsorships
- How to track and measure your sponsorship dollars to ensure high ROI

Don’t miss out, click here to register.