Romeo and Juliet, John Lennon and Yoko Ono, Ben and Jerry.
Ah, yes. The perfect partnerships where the stars are aligned and the heavens part, and in some cases where your names combine. Sports teams and sponsors are often in search of a similar union — a harmonious alignment of brand and team that reflects the team’s values, a brand that their audience adores and a brand that they know their audience will want to consume.
So how can sports teams use data to help strengthen their partnership with sponsors?
Finding sponsors based on data, not feelings
According to IEG’s annual spending analysis, the number of companies spending over $15 million on sports sponsorships grew from four to 107 in 2014 and remains steady in 2015. However, many of these partnerships are approached with ambiguous terms. Decisions are often made on a “gut feeling” or sports teams simply align with brands that have the largest marketing budgets or brands associate themselves to a team or player based on cool factor. Typically, there are few metrics in place to back up these investments, like TV logo exposure and sales activity.
Large brands continue to generously drop millions of dollars on these “blanket” sports sponsorships. And now with the advent of mobile apps, social media, in-stadium wi-fi, the opportunity to reach these fans has become more sophisticated. This makes sports sponsorships more nuanced, and therefore more competitive and expensive for brands — even without a strong sense of ROI.
Despite the hefty price tag, a recent analysis by the association of National Advertisers revealed that only 35% of marketers consistently measure the impact and effectiveness of their sponsorship activities, and 80% of them reported that the need to measure sponsorship ROI has significantly increased in the last couple of years.
So why isn’t anyone paying attention to the data that is likely available to them?
Sports sponsorships offer brands a unique opportunity
Sports teams offer a unique value proposition to sponsors. To put it into perspective, the NFL accounted for the top 45 out of 50 TV shows in 2014, bringing in 17.6 million viewers per game. Where else can brands have direct access to such a high concentration of captive fans and guarantee a recurring audience?
To prove this loyalty even further, Wall Street Journal recently published an article confirming that NFL sponsorships revenues will rise by 15% this year, despite highly controversial scandals by football players like Ray Rice. The same goes for FIFA. Even though there is a clear display of highly unethical behavior, brands are still in favor of associating themselves for the sake of reaching unwavering sports fans. Sports fans aren’t going anywhere and brands can find solace in knowing that their message is received by a sizable population.
So basically, we know that brands will spend money, but why aren’t they optimizing the money that they are spending by using data?
Sports sponsorship data is overwhelming
With all of the fragmented data sources, getting data and personas aligned has proven to be overwhelming and cumbersome for most marketers. Most teams have relied on traditional methods, such as using Scarborough (Nielsen) to try and measure metrics like cost per reach, unaided awareness per reach, sales/margin per dollar spent, long-term brand attributes and indirect benefits to help evaluate if the investment is worth it. However, there is a wealth of first-party data that has become available through email, social media, gated wi-fi and more where companies can now have a truly holistic view of their fans and run highly targeted sponsorship campaigns. Having data in so many disparate places with inconsistent metrics makes capturing ROI incredibly difficult for sports teams.
Putting data science behind sports sponsorships
In order to understand if sponsorships are truly being optimized there are several teams that are pioneering new ways of using data to please sponsors. The Panthers were able to sign, retain and upsell sponsors by capitalizing on customer demographics and brand affinities data. They were able to collect this data through social authentication, gated wi-fi and gated content on their fan newsletters.
Another team that is leading a sponsorship revolution are the Indiana Pacers. By collecting and unifying first and third party data, they have been able to show change in audience affinity over time. For example, if a beer brand sponsors a portion of the stadium, they are able to use first party data to show the difference an increase or decrease the affinity for the beer.
So while sports teams and brands have a long way to go before they start combining their names, unifying customer data is certainly a good first step.