6-1 Chapter 6 Pre-event Evaluation: The Assessment of Sponsorship Opportunities Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

6-1

Chapter 6Chapter 6

Pre-event Evaluation:Pre-event Evaluation:

The Assessment ofThe Assessment of

Sponsorship Sponsorship OpportunitiesOpportunities

Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

6-2

Pre-event EvaluationPre-event Evaluation

• An Effort to Evaluate Sponsorship Opportunities with the Goal of Identifying the Best Opportunities for Investment While Rejecting Those that Are Unlikely to Produce an Adequate Return on the Sponsorship Investment

• Recall Earlier Premise that Sponsorship Motives Have Evolved to Focus on ROI

6-3

Reasons for Increased Reasons for Increased Emphasis on Pre-event EvaluationEmphasis on Pre-event Evaluation

• Mass (Untargeted) Solicitations for Sponsors

• Increased Emphasis on ROI

• Increased Cost of Sponsorship

• Increased Number of Sponsorship Opportunities

• Increased Opportunities Beyond Sports

• Better Descriptions of Sponsor/Sponsee Target Markets

6-4

Mass (Untargeted) Solicitations Mass (Untargeted) Solicitations for Sponsorsfor Sponsors

• More Sponsees Using Less Selective Methods to Contact Prospective Sponsors

• No Real Effort to Match the Two Entities

• Risk– Rejecting a good opportunity out-of-hand– Investing in a poorly conceived opportunity

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Increased Emphasis on ROIIncreased Emphasis on ROI

• Prospective Sponsors Will Weigh the Cost of Sponsorship Against the Benefits

• Specific Marketing Objectives Associated with the Sponsorship Investment

• Pre-event Evaluation Represents an Effort to Estimate the Value of the Anticipated Results before Investing in a Sponsorship

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Increased Cost of SponsorshipIncreased Cost of Sponsorship

• Rights Fees for Major Events Have Experience an Upward Trend

• World Cup of Soccer Sponsorship: $17.5 Million in 1994; $100 - $125 Million in 2010

• Also Need to Consider Cost of Leveraging

6-7

Increased Number Increased Number of Sponsorship Opportunitiesof Sponsorship Opportunities

• Properties Increasing Their Number of Sponsors

• Properties Adding New Sponsorship Levels

• Properties Seeking Sponsors for First Time

• New Events Seeking Sponsors

• Sponsors Seeking International Opportunities

6-8

Increased Number of Opportunities Increased Number of Opportunities Beyond SportsBeyond Sports

• Causes– McDonald’s & Muscular Dystrophy Association

• Entertainment, Tours & Attractions– American Express & the Eagles Concert

• Festivals, Fairs & Annual Events– J2O & the London Comedy Festival

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Increased Number of Opportunities Increased Number of Opportunities Beyond SportsBeyond Sports

• Arts– Boeing & the Seattle Art Museum

• Associations & Membership Organizations– J.D. Power and Associates & Detroit Chapter

of the American Marketing Association

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Better Descriptions of Sponsee’s and Better Descriptions of Sponsee’s and Sponsor’s Target MarketsSponsor’s Target Markets

• More Information Available

• Better Defined Small Target Markets

• Better Targeting Available When Prospect Engages in Pre-event Evaluation

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When Are Pre-event When Are Pre-event Evaluations Needed?Evaluations Needed?

• When Existing Contracts Expire

• When New Opportunities Emerge– Property Initiates Sponsorship Program– Existing Sponsors of Property Drop Out– Property Increases Number of Sponsors– New Property Emerges and Seeks Sponsors

• When a Marketer Decides to Seek Sponsorship Opportunity for First Time

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Evaluation by theEvaluation by thePotential SponsorPotential Sponsor

• Identify Corporate Marketing Objectives

• Delineate & Prioritize Specific Sponsorship-based Objectives

• Identify Set of Evaluation Criteria

• Assign Weight to Each Criterion in Model

• Rate Each Criterion (for Each Alternative)

• Select/Reject Opportunities Based on the Systematic Evaluation of Each Alternative

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Identify Corporate Identify Corporate Marketing ObjectivesMarketing Objectives

• What Do We Want to Achieve with Our Marketing Strategy?

• Examples:– Increase Awareness– Enhanced Consumer Perception– Strengthen Brand Loyalty– Increase Sales– Attain Positive Public Relations & Publicity

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Delineate & Prioritize Delineate & Prioritize Specific Sponsorship ObjectivesSpecific Sponsorship Objectives

• What Do We Want to Achieve with Our Sponsorship Strategy? What Priorities?

• Possible Sponsorship Priorities– (3) Increase Awareness– (4) Enhanced Consumer Perception– (2) Strengthen Brand Loyalty– (1) Increase Sales– (5) Attain Positive Public Relations & Publicity

6-15

Identify Set of Evaluation CriteriaIdentify Set of Evaluation Criteria

• Identify A Broad Set of Evaluation Criteria

Drop Box 6.2 in Here

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Identify Set of Evaluation CriteriaIdentify Set of Evaluation Criteria

• Break Each Criterion Down into More Specific Evaluation Criteria; For Example:

• Budget Considerations– Affordability– Cost Effectiveness– Tax Benefits

6-17

Assign Weight to Each Assign Weight to Each Broad Criterion in ModelBroad Criterion in Model

• Weights Should Reflect the Relative Level of Importance of All Criteria to Be Used in the Evaluation Process

• Common to Use 100 Point Basis for Allocation Purposes

• Other Basis Can Be Used if Desired

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Assign Weight to Each Assign Weight to Each Broad Criterion in ModelBroad Criterion in Model

• Consider the Following 3-Criteria Model Using a 100 Point Basis

– Target Market Considerations (60)– Budget Considerations (30)– Event Management (10)

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Reallocate Weights to Each Reallocate Weights to Each Specific Criterion in the ModelSpecific Criterion in the Model

• For Each Broad Criterion, One or More Specific Criteria Will Be Used in the Evaluation Process

• Each Specific Criterion Will Be Assigned a Weight that Reflects Its Importance in the Assessment of the Broad Criterion in Which It Is Listed

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Reallocate Weights to Each Reallocate Weights to Each Specific Criterion in ModelSpecific Criterion in Model

• Instead of a 100 Point Basis, the Basis Is the Number of Points Assigned to Each Broad Category

• In the Previous Hypothetical Model, the Points Were Allocated As Follows:– Target Market Considerations (60)– Budget Considerations (30)– Event Management (10)

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Reallocate Weights to Each Reallocate Weights to Each Specific Criterion in ModelSpecific Criterion in Model

• In This Hypothetical Model, Assume that the 60 Points Allocated to Target Market Considerations Are Reallocated As Below:

• Target Market Considerations (60)– Geographic Media Coverage 10– International Coverage 2– National Coverage 8– Demographic Fit 30– Size (Reach) 10

6-22

Rate Each CriterionRate Each Criterion

• Using An Appropriate Measurement Scale, Each Criterion Is Rated on Its Merits

• Most Scales Use Between 5 and 9 Points in Order to Allow Adequate Discrimination

• Generally, a Negative Evaluation Is Assigned a Lower Number; a Positive Evaluation Is Assigned a Number at the High End of Scale

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Rate Each CriterionRate Each Criterion

• Consider a 9-Point Scale Where -4 Is a Poor Rating and +4 Is an Excellent Rating; the Scale Has a Midpoint of Zero.

• Each Criterion Can Now Be Rated on the 9-Point Scale

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Rate Each CriterionRate Each Criterion

• Consider an Example Where Coca-Cola Is Considering Renewal of Its Sponsorship with FIFA and the World Cup of Soccer

• Criterion Weight Rating • Target Market Considerations (60)

– Geographic Media Coverage 10 +4– International Coverage 2 +4– National Coverage 8 +1– Demographic Fit 30 +3– Size (Reach) 10 +4

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Complete the Ratings ProcessComplete the Ratings Process

• Multiply Each Rating by the Weight for the Corresponding Criterion

• Criterion Weight Rating W*R• Target Market Considerations (60)

– Geographic Media Coverage 10 +4 40– International Coverage 2 +4 8– National Coverage 8 +1 8– Demographic Fit 30 +3

90– Size (Reach) 10 +4 40

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Sum Results for All CriteriaSum Results for All Criteria

• Result Will Be a Single Grand Total

• Maximum Possible Points for Any Model Equals the Aggregate Weight Total Times the Best Rating for Each Criterion

• In this Example: 100 * 4 = 400

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Applying the ResultsApplying the Results

• Use the Same Model to Compare Each Alternative Sponsorship Being Considered

• Can Compare the Results of One Alternative to Another

• Can Compare the Results to an Established Benchmark

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Applying the ResultsApplying the Results

• Drop in Table 6.4 Here

6-29

Overview of the ProcessOverview of the Process

• Drop in Figure 6.1 Here

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Sponsee ApplicationsSponsee Applications

• Allows the Sponsee to Evaluate Its Own Proposal from the Prospective Sponsor’s Perspective

• Understand Prospect’s Priorities

• Can Help Sponsee Decide Which Components to Offer in Its Proposal

6-31

Closing CapsuleClosing Capsule

• Prospects Have Many Opportunities from Which They Can Choose

• The Increase in Opportunities and a Major Focus on ROI by Prospective Sponsors Have Led to Greater Emphasis on Pre-event Evaluation

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Closing CapsuleClosing Capsule

• Systematic Pre-event Evaluation Should Increase the Likelihood that the Sponsorship Will Achieve the Objectives Sought by the Sponsor

• More Independent Consultants that Can Help the Prospect with Pre-event Evaluation– Sponsorium - http://www.sponsor.com/home.jsf

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Closing CapsuleClosing Capsule

• Fewer Sponsorships Should Fail

• Fewer Failures = Higher Renewal Rates