{"id":238312,"date":"2020-11-09T14:33:00","date_gmt":"2020-11-09T13:33:00","guid":{"rendered":"https:\/\/rtrsports.com\/the-calculus-of-return-on-investment-in-sports-marketing\/"},"modified":"2026-09-22T19:14:13","modified_gmt":"2026-09-22T17:14:13","slug":"the-calculus-of-return-on-investment-in-sports-marketing","status":"publish","type":"post","link":"https:\/\/rtrsports.com\/en\/blog\/the-calculus-of-return-on-investment-in-sports-marketing\/","title":{"rendered":"Sponsorship ROI: how it is actually measured"},"content":{"rendered":"

Only 37% of companies that invest in sponsorship have a standardised process for measuring it. The figure comes from the ANA, the US advertisers’ association, and nobody has published a broader census since. The easy conclusion would be that sponsorship cannot be measured. The true conclusion is a different one: it measures perfectly well, but almost nobody buys the instruments to do it.<\/strong><\/p>\n

Updated September 2026.<\/em><\/p>\n

Commissioning, not a school report<\/h2>\n

I have used one image with industrial clients for years, and it is commissioning. When a plant is brought online, the instrumentation is installed before start-up, not after. You take readings with the plant idle, you take them under load, you compare them. No works manager would accept judging a production line by looking at it from a distance at year end.<\/p>\n

In sponsorship this is exactly what happens. You sign, you activate, and twelve months later you ask the agency for a report. By then there is no baseline, no control group, nothing that allows the effect of the contract to be isolated from everything else. What arrives is not a measurement, it is a school report written by the pupil who received the grade.<\/p>\n

What ROI is, and what it is not<\/h2>\n

ROI is a financial indicator and it remains what it has always been: the ratio between the margin an initiative generates and the cost of the initiative itself, expressed as a percentage. Incremental revenue minus total costs, divided by total costs, times one hundred. It contains no impressions, no views, no seconds of logo exposure in the broadcast.<\/p>\n

The sore point is the adjective: incremental<\/strong> revenue. Not the revenue of the period, but the revenue that would not have existed without the sponsorship. It is a distinction that sounds academic until you try to run the calculation, at which point it becomes the only thing that matters.<\/p>\n

It is worth being equally clear about what ROI is not. It is not advertising value equivalency, the notorious AVE, meaning what it would have cost to buy in advertising the space obtained for free in commentary and in the press. Industry bodies dismantled that metric more than fifteen years ago: the Barcelona Principles, the international standard for communications measurement promoted by AMEC, were created in 2010 and their fifth rule has always excluded AVEs. Version 4.0, presented in June 2025, is blunter still: invalid measures such as AVEs should not be used, and the contribution of communication is to be evaluated through its outcomes and its impact.<\/p>\n

And yet AVE keeps appearing in end-of-season reports, because it has two irresistible qualities: it is easy to produce and it always yields a big number. If somebody presents you with a sponsorship return expressed in equivalent advertising value, they are not measuring a result. They are measuring how much television you did.<\/p>\n

ROI and ROO: two instruments, not two opinions<\/h2>\n

Alongside ROI sits ROO, return on objectives. It is not a softer version of ROI for when the numbers do not add up: it is the right instrument for objectives that do not pass through the profit and loss account in the current year. Lowering the cost of hiring an engineer in a market where nobody knows you is an objective. Getting onto the approved supplier list of three manufacturers is an objective. Reducing churn among the industrial clients who attend your track events is an objective.<\/p>\n

The rule I apply is simple. ROO is declared before signing, with numerical thresholds and a date. ROI is calculated afterwards, on sales. A contract with neither written into it is a contract nobody will ever truly evaluate, and it duly gets renewed out of inertia or closed out of fatigue.<\/p>\n

The numbers worth remembering<\/h2>\n

Kearney, in a study published in July 2025, values the global sports market at $417 billion and expects it to pass $600 billion by 2030. Within that $417 billion, the segment covering media rights, sponsorship, in-venue advertising, merchandising and matchday is worth $154 billion, and sponsorship together with in-venue advertising accounts for $52 billion of it. That last figure is worth holding on to, because it is the real perimeter of the trade we are discussing.<\/p>\n

On the other side is the picture drawn by the ANA and MASB, published in July 2018 and referring to a North American market estimated by ESP Properties at $24.2 billion: only 37% of respondents have a standardised measurement process, only 40% write measurement expectations into their contracts with properties, and among those with a defined process 57% have a dedicated budget, which in most cases amounts to 5% or less of the rights value. Yet 78% declared a growing need for validated results.<\/p>\n

That this remains the most cited survey eight years on says, in my view, rather more than the figure itself.<\/p>\n

Five mistakes, in my view<\/h2>\n

The first: looking for ROI where it does not exist yet. A first-year sponsorship rarely produces measurable incremental revenue, because the first year is spent building the conditions. Demanding ROI at twelve months leads to closing programmes that were working.<\/p>\n

The second: not taking the baseline. Without a reading before signing, on awareness, consideration, pipeline and share in the markets involved, every subsequent number is an assertion with nothing to compare it against.<\/p>\n

The third: measuring only the easy markets. An international programme has to be measured with the same method in every country where it is live, otherwise the whole operation ends up judged on the domestic market, which is almost always the one least influenced by the sponsorship.<\/p>\n

The fourth: leaving activation costs out of the denominator. ROI is calculated on total investment, not on the rights fee alone. A programme with \u20ac500,000 of rights and \u20ac400,000 of activation has a denominator of \u20ac900,000, and anyone who forgets that is telling themselves a return that does not exist.<\/p>\n

The fifth: not counting the B2B. In motorsport, the share of value that comes through commercial relationships between sponsors, through supply contracts born in hospitality, through presentations made in the paddock to clients who would never have received you at the office, is often the most profitable part of the entire programme. It is also the only part nobody puts on the books, because it arrives as orders that look as though they came from somewhere else.<\/p>\n

The method, in five steps<\/h2>\n

One, write the objectives into the contract, with numbers and deadlines. Not “increase awareness”, but “take aided awareness from 12% to 20% in the German market within twenty-four months”.<\/p>\n

Two, take the baseline before signing, on the same indicators and with the same instrument you will use afterwards. It is the line clients cut first and the one that makes everything else possible.<\/p>\n

Three, isolate the effect. Where you can, use a control market, a comparable country in which the sponsorship is not activated, and measure the difference between the two. It is the closest thing to proof this trade allows.<\/p>\n

Four, track the three value streams separately: incremental sales, the value of the commercial relationships generated, and the savings on other marketing lines that the sponsorship made unnecessary. That last one is almost always forgotten and almost always material.<\/p>\n

Five, review at the midpoint. Not to renegotiate the fee, but to move the activation budget to where the numbers say it is working. A multi-year programme that still has its first-year activation plan at the end of year two is a programme nobody is watching.<\/p>\n

What measurement costs<\/h2>\n

Between 3% and 5% of the rights value, if the measurement is serious and covers several markets. It is the same order of magnitude the ANA recorded back in 2018 as the ceiling among companies with a dedicated budget, which suggests that those who measure know what it costs and those who do not have never asked.<\/p>\n

In my view that percentage is also the floor below which there is no point going. A \u20ac1 million programme with \u20ac20,000 of measurement produces a report, not a measurement. And a report that cannot say no is worth nothing, because the value of a measuring instrument lies entirely in its ability to prove you wrong.<\/p>\n

Anyone working in motorsport sponsorship<\/a> knows this well: it is the sector where direct commercial return is easiest to isolate, because the paddock is a closed environment in which relationships can be counted one by one. And anyone still deciding whether to enter would do well to start from the corporate factors that actually drive the decision<\/a>, before the calculation itself.<\/p>\n

Measuring a sponsorship is not difficult. It is simply something that has to be decided in advance. Always.<\/strong><\/p>\n

Sources:<\/strong> ANA and MASB, study on sponsorship measurement<\/a>; AMEC, why AVEs are invalid<\/a>; Kearney, the global sports market heading for $600 billion<\/a>; Kearney, From passion to profit<\/a>.<\/p>\n

\r\n\r\n

Frequently asked questions about sponsorship ROI<\/b><\/h2>\r\n \r\n
\n
\r\n\r\n

\r\n How is sponsorship ROI calculated?<\/b>\r\n <\/h3>\r\n\r\n
\r\n
\r\n

Subtract total costs from the incremental revenue generated by the sponsorship, divide by total costs and multiply by one hundred. Total costs include the rights value and every activation expense, not just the fee paid to the property. Revenue must be incremental, meaning revenue that would not have existed without the contract.<\/p>\n <\/div>\r\n <\/div>\r\n\r\n <\/div>\r\n
\n

\r\n\r\n

\r\n What is the difference between ROI and ROO?<\/b>\r\n <\/h3>\r\n\r\n
\r\n
\r\n

ROI is a financial indicator measuring margin against investment. ROO, return on objectives, measures the achievement of goals that do not pass through the profit and loss account immediately, such as awareness in a new market, entry onto an approved supplier list or a lower cost of hiring. The two coexist: ROO is declared before signing, ROI is calculated afterwards.<\/p>\n <\/div>\r\n <\/div>\r\n\r\n <\/div>\r\n
\n

\r\n\r\n

\r\n Is AVE a valid measure of sponsorship return?<\/b>\r\n <\/h3>\r\n\r\n
\r\n
\r\n

No. Advertising value equivalency estimates what it would have cost to buy the same space in advertising, but says nothing about what that exposure caused. The Barcelona Principles, the international standard for communications measurement created in 2010 and now at version 4.0, state that invalid measures such as AVEs should not be used.<\/p>\n <\/div>\r\n <\/div>\r\n\r\n <\/div>\r\n
\n

\r\n\r\n

\r\n What does it cost to measure a sponsorship?<\/b>\r\n <\/h3>\r\n\r\n
\r\n
\r\n

Between 3% and 5% of the rights value for a serious programme across several markets. The 2018 ANA study found that most companies with a measurement process allocated 5% or less of the rights value to it.<\/p>\n <\/div>\r\n <\/div>\r\n\r\n <\/div>\r\n
\n

\r\n\r\n

\r\n How long before a return can be measured?<\/b>\r\n <\/h3>\r\n\r\n
\r\n
\r\n

It depends on the objective. Perception indicators move within the first twelve months if activation is substantial, incremental revenue rarely before the second year, and the value of commercial relationships born in hospitality emerges across the whole life of the contract. Demanding financial ROI at twelve months leads to closing programmes that were working.<\/p>\n <\/div>\r\n <\/div>\r\n\r\n <\/div>\r\n
\n\r\n <\/div>\r\n \n","protected":false},"excerpt":{"rendered":"

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