In Sports Marketing

Motor sports sponsorship can be a powerful marketing tool for companies wishing to reach fans and enthusiasts and promote sales. However, determining the return on investment (ROI) of such operations can be difficult. In this post, we will simplify the ROI formula for motorsports sponsorships.

Identifying sales and marketing objectives and reading the data

The first step is to identify sales and marketing objectives. Do you want to increase brand awareness? Engage existing customers? Acquire new contacts? Open up new markets?

Your objectives will determine the types of activities and activation you will pursue on the basis of the partnership. For example, to increase brand awareness and get automatic coverage (that which comes from being part of the event) you need to place the logo on the car, on the driver’s overalls or on trackside signage, but if you are looking to generate leads, an on-site activation where fans provide their details (email/tel) in exchange for prizes may be more effective.

Once the objectives have been clarified, historical data on sponsorship performance should be examined. Examine metrics such as impressions, increased awareness and popularity, lead generation results, increased sales and share of voice from previous offers. These metrics allow you to estimate the expected ROI based on the size of the new sponsorship. Awareness increases of 5 % and lead generation increases of 15 % are common benchmarks.

The advertising equivalent value generated by the operation is another key input. How much would you have spent on digital, print, TV and outdoor advertising to achieve the same visibility? Working with an external agency to conduct an audit after the first tenders allows you to quantify the value of the media up to that point. When evaluating potential sponsorships, also consider the more tangible benefits, such as hospitality passes, social media promotions and experiential activations offered by the sports venue. It is important to take full advantage of all the resources of the sports property by utilising them in marketing activities.

Activation and amplification are where the rubber meets the road. Creative brand campaigns that complement sponsorship activities help increase awareness and engagement. For example, a food sponsor might offer free tickets linked to promotions for food purchases. Or an automotive brand might produce viral video content using the driver as a testimonial.

Calculating sponsorship ROI

Now the moment of truth: linking marketing results to business results. Surveys, sales data and other sources must try to establish this connection. The ROI formula gives you the chance. Increased purchase intention, liking and consideration of the product indicate that the sponsorship is relevant to the target audience. Increased sales online, on-site or through touch points as a result of promotional and PR activities signal that you are going in the right direction.

To recap:

  • Identify marketing and sales objectives
  • Verify expected results against benchmarks in advance
  • Economically evaluate the visibility produced by the sponsorship
  • Utilise all the assets owned by the sponsoring party in favour of the sponsor and its communication and commercial needs.
  • Amplify through creative activations
  • Link marketing metrics to business KPIs

Although imperfect, this approach allows sponsorship ROI to be estimated and measured. The key is to determine which metrics are most important to your brand. Going beyond impressions to link awareness and goodwill building with sales funnels takes some work, but generates actionable insights.

The percentage ROI formula that will allow you to assess the commercial effectiveness of your sponorisation is as follows

(Total Revenue – Total Costs)

_______________________ X100 = ROI%

Total Costs

So if, for example, you organise a promo or an event, you will be able to collect the necessary data and verify the return in commercial terms.

Particularly in the case of a hospitality business you can track the increase in frequency and volume of orders that your guests have placed in the following 4/6 months and you can, using the formula above, understand the ROI of the individual guest. You must, however, take care during the data collection period not to activate other operations on those customers so as not to ‘dirty’ the data.

Motorsports sponsorship remains a high-impact platform, given the enormous loyal and high-spending fan base that sponsors can reach. Although complex, breaking down the ROI formula into distinct steps facilitates measurement and optimisation. As with any other marketing activity, sponsorship requires brands to start with clear objectives, harness the capabilities of all involved, act creatively and use data to constantly monitor the operation and make necessary corrections.

If well executed, sports sponsorships guarantee a winning ROI.

Can we help you sign your best sponsorship deal?

Riccardo Tafà
Riccardo Tafà
Managing Director for RTR Sports, Riccardo graduated in law at the University of Bologna. He began his career in London in PR, then started working in two and four-wheelers. A brief move to Monaco followed before returning to Italy. There he founded RTR, first a consulting firm and then a sports marketing company which, eventually, he moved back to London.
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