How To Value A Sponsorship Asset

How To Value A Sponsorship Asset – 6 Elements To Consider

October 7th, 2015 Posted by No Comment yet

It’s the age-old question, “What is my sponsorship property worth?”. It can be hard to sift through all of the opinions people have so here are 6 elements you need to consider that will help you put some science in the sizzle.

“What is my sponsorship property worth?” is a terrific question that you could write a novel answering or you could answer in six words, “Whatever the market is willing to pay”.

In my opinion this is what separates the masses from the experts. Most people will look at an asset and simply say something like, “Well, it has 100,000 people go through it so it must be worth a truck load of money!”.

However, the factors that go into making something ‘of significant value’ are much more than this simple assessment.

You have to love your assets

I remember sitting down with a senior executive and him challenging me about the fact that no one was interested in obtaining the naming rights to a well-known asset. To him, the equation was simple – the facility had 300,000 attendees each year and therefore should be worth at least $300,000.

To me, the facility was worth way less given the fact that it was in a very tired state because a renovation was about ten years overdue. That is a massive turn off for a brand. How can you expect someone to fall in love with your asset if it is clear you don’t give it the love and attention it deserves?

Renovate the facility and you might be a chance. Fair to say that the facility is still unrenovated and still sits without a sponsor.

How to value a sponsorship asset

So how do you actually figure out how to value a sponsorship asset? Here are 6 important elements to consider.

1. Numbers

There’s no escaping that numbers play a part in valuing an asset. Reach is the thing people look to first and most often. If you can combine reach with the other variables below you have a property of significant value.

2. Ability to provide meaningful engagement

This is crucial and ‘meaningful engagement’ can be many things. It can be interaction with the target audience (see below) or it can be something that allows the target audience to have an improved experience. It is where a sponsorship moves beyond simple branding to make a connection between the property (asset), the brand and the audience/consumer. In a perfect world this engagement would lead to a sale but many brands are seeking a return on other objectives that need to be considered such as awareness or building a database.

3. Target audience

If oils ain’t oils then audiences certainly ain’t audiences. Find out who your audience is and match them against a brand who is chasing a similar audience. Yes, this is a simple idea, but the fact is that if you can provide a property that is bang-on the target market for a brand, especially if it is a segment that is difficult to reach, you significantly increase its worth.

4. Uniqueness of opportunity

Similar to the above, if your property is a dime a dozen you will find the market harder to crack. A unique opportunity that allows a brand to differentiate itself in the market is a big value add.

5. Clutter

Does your property offer the brand the opportunity to stand out in the crowd? Or is it one of many that the audience will be bombarded with? Cut through provides a better return on investment for a brand as they seek to make all their marketing dollars work as hard as they can in today’s fragmented environment.

6. Your asset v alternatives

Last, but certainly not least, is to consider what you offer in the areas above against what the alternatives cost. If a simple advertising/marketing spend can meet objectives easier and cheaper than what you offer then the price will be driven down. Remember, you are not only competing against other sponsorship properties, but other marketing and advertising options.

Again, this list is by no means exhaustive. Overall, do your homework, understand your property and the market. With that knowledge, you will be in a much better position to head to market with some idea of what your sponsorship property is worth.

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