Navigate is a measurement organisation based in Chicago. They’ve measured the impact and ROI of hundreds of sponsorship deals and have valued billions of dollars in sponsorship transactions on behalf of brands, properties, universities and agencies. We spoke to Tom Vriens, their European Managing Director, about the market and how things are changing.
What is Navigate’s role within the sponsorship space?
We provide brands, properties, and agencies with business intelligence to inform strategy and decision making. We believe this industry doesn’t need another data provider, but is in desperate need of intelligent interpretation of data in relation to the challenges and business objectives unique to every organisation. Our agency is built to deliver best-in-class consultation based on the foundation of research. Custom market research, secondary research & valuation, and syndicated research are the main pillars we lean on.
We have assessed the fair market value of over €4 billion in sponsorship investments, conducted hundreds of sponsorship impact (ROI) studies, dozens of sponsorship portfolio assessments, and many custom assignments. Our clients range from brands like PepsiCo, Red Bull, Visa, and Enterprise; networks like ESPN, CBS, NBC, and FOX; properties like the LA Lakers, Madison Square Garden, Denver Broncos, and Chicago Bulls; to governing bodies like the NFL, NBA, NRL and IOC.
Media exposure numbers have always been the core perimeters in this industry. Is that changing?
Our business is different in that we try to establish fair market value; what it should actually sell for, not based on media equivalency or earned-media measures. We’ve always thought those measurements were going away over time and expected a shift towards measures of effectiveness and ROI. The reality is that most of the money is spent in media, so anything that reflects a media equivalency allows for an apples-to-apples comparison. Half of our business is still about assessing value, rather than impact.
Has the practice of sponsorship measurement improved over the last 5-10 years?
Certainly, the technology behind exposure tracking has come a long way and we’ve shifted from the quantification of exposure generated to a more advanced assessment of the value of exposure based on platform, audience, impact, messaging capability, etc. There is plenty of room for improvement. The majority of brands don’t have awareness problems, yet still spend the bulk of their marketing budget in the upfront market. If we as an industry can’t convince these brands to shift more money towards integrated sponsorship, then shame on us.
Social media – cure or curse?
Social media is one of the most inexpensive and highly effective sponsorship assets. Many rights holders struggle to properly value social media exposure and are therefore underselling these assets. The impact on brands’ key performance indicators, down the purchase funnel (consideration, purchase intent, etc.), is tremendous. We conducted a study which showed that fans who recall sponsors through social media channels are 164% more likely to purchase a product or service from the brand sponsor (www.thesocialmediascoreboard.com). Savvy brands are taking advantage and are loading up on underpriced social media sponsorship assets.
What current trend are you watching most closely right now?
The future of TV is what occupies a lot of our time. Sports will be the leading indicator and major disruption is inevitable. There’s a lot to gain for the ones that are at the forefront of this development; you can win the fans / consumers of today and tomorrow if you get it right. There’s also big potential for rights holders with a smaller reach, but a passionate fan base as an over-the-top distribution fits those organisations much better than the traditional TV programming that needs to appeal to the masses. The amount of high-quality content will keep growing and small avid fan bases will gladly pay a premium for it.
Any words of advice you can offer other ESA members?
Nearly ¾ of companies spend 1% or less to measure their sponsorship investments. We are seeing that number grow each year, but not fast enough. Sponsorship fees have grown exponentially over the last decade and brands can’t look at sponsorship as a charity donation any longer. As a legitimate marketing platform, a research budget of 1-3% of total sponsorship budget would be advisable and in line with what is currently being spent at brands to evaluate most other marketing investments.