By Cosmos Sports | September 9, 2020Reading Time: 45 minutes
In a 10 part episode series, our experts discuss the different tools and tactics to acquiring sponsorship. Episode 2 is all about what your sponsorship is worth.
What’s Your Sponsorship Worth?
“Good afternoon, everybody. Welcome to Episode Two of our corporate sponsorship webinar series. My name is Evan, this is Cary who’s president of Cosmos Sports and Entertainment. So again just before we get started, just a couple housekeeping items, very big thanks to Central Counties Tourism and Sport Durham for hosting the webinar series and giving us the opportunity to put on this workshop. So thank you very much to both of them. Again, if the slides are a little bit difficult to see we’re going to make all the slides available to anybody who’s registered for the webinar afterwards. So if there’s anything that you can’t really see on the on the slides or if you want to just listen and not worry about taking notes you’ll get all the slides afterwards as well. QA, so we’re going to spend the last few minutes of the presentation doing some QA, please feel free to submit questions at any point throughout the presentation. If you’re looking on the YouTube page in the top right corner there’s a live chat box that you can submit questions to Rebecca our colleague is here and she’s keeping an eye on all the questions and and we’ll try to address all of those at the end of the, at the end of the webinar. If for whatever reason a question comes to mind after the webinar is done, something that didn’t really make sense or that you’d like to, that you’d like to clarify with us please feel free to to send us an email, if you go to cosmossports.com and look at our staff page, Cary’s email’s there, my email’s there, or you can email firstname.lastname@example.org. Happy to answer any questions or clarify anything from today’s presentation. So with that, we’ll get into episode number two.
So, episode number one a couple weeks ago, we started off the webinar series talking about what sponsors want and really trying to understand exactly what their objectives are, how to understand when they say things like awareness, what does that actually mean? And how can we as properties in organizations that are selling sponsorship, how can we deliver to the level of service that they’re looking for? So the next kind of natural question once we’ve answered that question of what sponsors want is what do we have to offer them and that’s really what we’re going to get into today is how to identify all the opportunities that your organization has from a sponsorship standpoint, and how to get a ballpark anyways, at least of what’s that worth, and how much should I be charging for this?
So Cary, just I guess, just as a kind of a start, I mean, this is a question that were asked quite commonly and I can say, you know, even for myself starting out in working in sponsorship, and a lot of our staff that start out working in sponsorship, this is just a real question that people don’t necessarily have a very straightforward answer to. So why do you think it’s such a common question?”
“Well, I think it’s confusing. I think for people who haven’t been in sponsorship, it’s and it really is just like advertising. You know, somebody could say, well, what’s it worth to buy a quarter page ad in a newspaper? What’s it worth to buy a space on a Facebook page? What’s it worth to, but that’s a tricky thing, especially for people who haven’t done it. So really, there’s a, it’s an important exercise to figure out like, what what do we have? What is the available inventory? And I think it can be at first it’s kind of intimidating, which is, well, how would I know what a sponsorship package or somebody buying a sign in our arena, how do I know what that’s worth and I guess what I says everything’s priced like that. How do you know what a coffees worth? Right? You know, it’s sometimes can be a little easier when you buy something for $2, and you think, okay, I bought it for $2, I could sell it for $4. If you didn’t pay the $2, and you’re trying to determine what to sell something for, which is a service and you haven’t gone through that exercise it it can be hard sometimes or it’s a product, but it doesn’t have a hard intrinsic value.
So anyway, just say it is important for those who think it’s confusing or tricky, or they haven’t done it. I think you’re not alone. I think it’s it’s an important part of the process. But it’s not always straightforward.”
“For sure. So with the the appreciation that it you know, it’s a tricky question for a lot of people to answer and we’re going to go through, we’re going to discuss kind of both sides of how to value sponsorship from a little bit more of an objective standpoint and then trying to get a little bit more of an understanding the subjective and really what drives the value of sponsorship, because as Cary said, it’s not as simple as what the cost was to produce it and then, you know, putting in a healthy margin, it’s a little bit more abstract than that. So some of the hopeful takeaways that we want everybody to take away from today’s webinar. First, is we’re going to go through a fairly step by step process on how to identify the assets that your organization has, and how to at least get an initial ballpark value of what of what you could price tag that you can put on those on those assets, we’re gonna, again, we’re going to look at it from an objective and subjective standpoint, trying to understand, you know, from from a subjective standpoint, what drives the value and how that value changes based on who you’re selling to. And lastly, we’re going to talk about just how to articulate that value to a sponsor. So touching on the topic that we’re going to be addressing later on in the webinar series. But once you’ve understood all the assets that you have, how do you articulate that to a sponsor to really show them the value of those lessons.
So to start off for just before we get too far, and we just wanted to clarify some language that you’ll hear us kind of using and want to make sure we’re all talking the same language. So we’ve, we have an example here of a client of ours, the Brampton Beast Hockey Club. So there’s different terms that you’re going to hear us use and we wanted to clarify those here. So first, you know, organization, I mean, very straightforward, just your company, or in this case, in our example, here, the team itself, the Brampton Beast are the organization. But looking at it from a sponsorship standpoint, we break down that organization into different properties. In the case of the Brampton Beast, there’s the in arena assets where the pro hockey team actually plays, so there’s things like rink boards, backlit signage, and there’s video board. So there’s all those assets that happened in the arena. So we put those as one property, there’s the team’s website, and the team’s social media, and the team’s app, and things like that. And we lump those together into a digital and web property. And then third, and in our case, teams lucky to have the rights to the community rinks at the Powerade Center as well. So an additional three ice pads with their own set of assets and so we categorize that as its own third property.”
“And just what I would say, this applies, you know, I think some of the examples, you can look and say, well, we’re not a hockey team, I was a supply I think, in general, there you have in facility, you have properties related to your entity itself. So if you’re having a festival or an event, there’s the properties attached, or the assets attached to the event itself. There’s the online corollary assets, what’s the digital and online and then the third element, which we put community here is, are there any tertiary assets that are in addition to the event itself? Maybe the facility. So maybe if you’re running an event facility, you could look and say, okay, the festival assets, but are there any facility assets are above and beyond that, so really, it’s saying your entity itself, your online component, the people that aren’t physically there? And then the third one is service or anything can you go above and beyond that, is there anything tertiary additional that makes sense?”
“Yeah, and this is, again, the way of breaking down organizations into properties, again, it is very organization specific. So, each one’s going to have a slightly different breakdown and it really is based on preference. In this case, with this example, we wanted to share these three, but could look very different for your organization. So for each of the properties, each property has its own set of assets, and there could be some crossover. So, you know, the community rinks and the in arena and our example here, both have rink boards as an asset. So the assets are all the all the things within that property that you can leverage for sponsorship. So just right off the bat, we just wanted to clarify that language, because you’re going to hear us using the words assets and properties throughout the whole presentation.
So if you’d like to, and you may find it easier to do so with the recording of this webinar. But again, as I mentioned at the beginning, we’re going to go through a step by step process of how to identify and value assets and we’re going to be using a spreadsheet to build out what our final product is, which is a populated spreadsheet with all the assets divided into properties with benchmark values, and reach and descriptions and all that kind of thing. So, if you want to follow along and do the steps as we go feel free, you may find it easier to do that afterwards. The reason that we do this, in this kind of being part of that objective process of valuing assets, is one, it helps keep the team organized so you’ll know what inventory is available, what’s what’s been sold, you’ve done the homework of kind of what’s it worth, and particularly in situations where you might have more than one person who’s actually selling assets, having a listing of assets with kind of rate card values to them, helps make sure that similar assets are not sold for vastly different amounts. So it kind of keeps pricing a little bit more consistent.
Right so the first step when it comes to identifying opportunities, and identifying assets is actually kind of a fun activity, and gives you and your team an opportunity to be really creative. And it’s really, you know, whether it’s a whiteboard or flip chart or something, it’s pulling the team together, and trying to think of all the places that are related to your organization and your properties where a sponsor could be recognized. So a kind of an easy way to kind of think about it is, you know, where can we put a logo, or where can we recognize the sponsor, and really just listing all of those out, and you want to involve a lot of people from, you know, if you’re in a bigger organization, you may want to involve people from different departments, if you’re, you know, in a smaller organization, really, you know, it can be fun to involve the whole team and, come up with all the different places where sponsors can be recognized. You may find it easier to list out the assets first and then looking at your list of assets, you may find, okay, there’s natural groupings for properties, you may want to identify those properties first, and then build out the assets from there, it’s really, really a preference thing. But you want to build out this initial list anyways, everything, all the ideas that you can think of, and get them out onto paper or whiteboards.
Now, this example here, you know, not by any means meant to be exhaustive, or anything like that it’s, and there really is no end to the number of assets you can list and so you don’t want to get hung up on getting them all down on paper right off the bat, you want to be flexible, and leave some room for creativity to create some new assets. So Cary, I know you’ve had some, some examples of where even in a meeting, you know, maybe an asset wasn’t identified but in the meeting, you know, an idea comes up from when chatting with a sponsor and all of a sudden, you have a new piece of it.”
“Yeah, and I think we talked about one of the themes that you’ll get for those who are at the in person presentation or online is that it really is about the customer. So in the sense when you’re, you know, I’ve been in a situation I think the one that I like is, if any of you work with waste management, or there’s company called Miller waste, or 1-800 junk and I was in a meeting one time looking at, you know, an arena was actually a tour of the arena looking at all kinds of different assets and discussion came out about the garbage cans. Now, you don’t think in an arena the garbage cans as an asset. Well, if any of you are on this call, and you’re talking to 1-800 junk, for instance, my guess is they’re gonna be more interested in the garbage cans and anything else you have in the building. So can they sponsor that? And that’s sort of a discussion that asked, you know, but you really have to get to understand the company. If you’re really listening, if you’re an active listener and understanding what’s interest, you know, of interest to them, you’ll different forms of inventory. I’ve seen railings on escalators as part of inventory, or floor space or stairs or we do something in Kitchener where the Pita Pit sponsors the penalty box, because it’s a pit and it relates to their name and if you don’t think of that, they probably wouldn’t be sponsoring the team at all if they weren’t sponsoring the penalty box. Well, that’s not a defined asset it’s not even the signage, it’s in the, It’s the penalty box itself. So really go back to listening and, you know, a lot of times inventory could be created on the fly. But don’t don’t expect Pita Pits going to come up with the penalty box that’s on you, the person who is listening, that’s your responsibility. Be creative. Don’t expect that 1-800 junk is going to come up with the garbage cans I did. They’re not in the sponsorship business. That’s not their job to come up with creative forms of inventory. But by listening, Swiss Chalet sponsors the chicken dance, I’ve talked about Brampton Beast, at Brampton Beast hockey games, it’s not random that they’re doing they’re not sponsoring, you know, another song. So I think and they’re, you know, they’re willing, they can relate to that, and you’re willing to invest money in that type of inventory.
So I think, again, it’s have some fun with it, but also be open to creative inventory that matches specifically with the company than the mistake on a lot of these asset valuations is they’re too generic, gold, silver, bronze ABC, the company doesn’t generally care about that. So it’s a starting point and I think that’s part of what taking inventory is about, it’s a starting point, it’s a benchmark, but it’s very rarely the ending point and I think that you can get caught up in, so maybe another, build a gold package, but don’t expect anybody to buy it. So I don’t know for anyone listening, that’s a pretty important point, don’t expect anybody to buy it as written, it’s not, you know, be flexible, that you have to have it, and you have to build it, but, you know, people are going to take something from package a, and something for package b, and something down here, something that wasn’t even on your menu. And that’s typically what good partnerships are all about.”
“So really keeping in mind, you know, tying it back to their objectives and you know, making sure that it really does align with what their objectives are, can’t go a little bit crazy with, with the inventory and, you know, listing things that really don’t accomplish their goals, right.
So at this stage, if you’re following along with the spreadsheet, you wanted to kind of look something like this. So formatting, so the orange bar at the top, just your organization name, pretty straightforward, you know, yellow, your kind of sub dividing your spreadsheet into your different properties that you’ve identified. And then quite simply, here, you’re just listing out all the assets that you and your team have identified, and providing a little bit of a description for each one, just so you know, for future reference, kind of what it is. Great.
So now that you have a full list of all your assets, and you’ve divided them into properties. Now comes kind of the fun part of trying to understand a little bit of what each of those assets is worth. So we’ve, as a starting point, we’ve provided a bit of a guideline that you can use just for more so for quick math kind of purposes. So not over, not getting overly in depth into valuing each of the the assets but really, if you’re just trying to figure out quick math, am I even in the right ballpark?
So the first at the top there any paid media, so you may have cases where the local newspaper, you either purchase media from them, or they donate it in kind to your event. So they’ve already kind of done the work for you in that case. So you want to use the kind of the retail rate that they’ve set for their media. So if you’re promoting your events, and you are attaching a sponsor to that, that newspaper ad is $500, for one sponsor to be recognized on that newspaper ad is $500. So pretty straightforward there. And then if you’re going to include multiple sponsors, for each sponsor, the value goes down slightly, because they’re not as exclusive anymore. So, you know, quite simply, if it was $500 for one sponsor, and you have two sponsors $250 each is kind of a good place to start anyways. With your owned media, so the things that you are in direct control of, so things that are at your event, whether it’s signage or pa announcements, your website, things like that, a good guideline to start from is about a penny per impression. So we talk here in terms of a per impression and we’ll touch on it a little bit later as well, but, you know, CPM is another term that you that you may hear and quite simply all CPM is just cost per thousand and that’s a very common term and advertising and sponsorship depending on your organization and the size of your audience and your reach you may find it easier to figure out a per impression rate if you’re talking about thousands and thousands of people you might find it easier to talk in terms of a CPM for math purposes but a good place place to start…”
And the M by the way is a thousand in Roman numerals. Some people, it sounds obvious but it’s always people saying why CPM and not CPT.”
“So a good place to start anyways, is that is that penny per impression. So I know when I first heard this, it seemed a little low to me and I think for a lot of people that hear at first, you know, a penny might seem a little low to them as well, you know, we don’t even use pennies anymore. So what are your thoughts on that Cary it just?”
“Well, I mean, it’s an impression, you know, impressions of very loose, you know, I don’t think it’s too I don’t think it’s low. I think if, you know, I think it’s where it should be, I’d probably, if I had to pick one, I’d probably say it’s high. But I wouldn’t say it’s low. I think that, you know, when you see these numbers, you know, Facebook numbers and, or website numbers, and we had 623,000 impressions, you got to realize what an impression is, it’s literally there’s no activity, there’s so it, you know, I think the next steps of it are people views, clicks, opens, there’s other elements, you know, how many people are engaged and looking and, you know, there’s, there’s more far more advanced analytics, the average, what’s the average person a time, you know, time someone’s looking at an ad, or on a website, or, to me, I think the number’s right because you’ve got to get, you know, it’s the beginning of, it’s a very beginning of a process, you’ve got to get a lot of impressions to get somebody to actually make a buying decision, right.”
“And one thing to clarify at kind of at this point before we kind of get too far is that this initial evaluation process is really about the media value, we’re going to get into what kind of differentiates your media versus buying a Facebook ad, or buying display ads through Google or things like that. So right now, we’re really just kind of talking about how to value that the media
Just to provide a couple kind of examples of some really common inventory or assets that a lot of people that are on this call will probably have with their events, website, you know, first and foremost, websites, in general, you know, can range anywhere from you know, less than a penny per impression to 13 cents per impression is kind of an industry standard. Again, you know, might be a little bit tricky to see on the slides here but we’re going to be sending this out afterwards and so you can use it for reference purposes. But the thing to keep in mind with, you know, with website in particular, is that it’s not so much about what’s your total traffic to your site, it’s how much traffic and unique users are coming to a page in particular that you’re sponsoring. So if you’re going to sell a native ad on your homepage to a particular sponsor, you want to look at how many unique users are you getting to your homepage, not necessarily what the total web traffic is going coming to your site.
So pa announcements or another really common one, again, you know, a range of somewhere from less than a penny up to seven cents per impression is an industry standard for pa announcements, keep in mind, again, trying to value that based on how many people actually are likely to hear the pa announcement, as opposed to what the total traffic through through an event is.
Product sampling is another very common one with events and festivals and, you know, properties that are selling 10 by 10 spaces, things like that. So those tend to range anywhere from 5 to 20 cents per sample again, as an industry standard, you know, on the higher end, if it’s a little bit more targeted on the lower end, if it’s, you know, something like a an exit sample where everybody that’s leaving the event is getting the sample.
So property publication, a lot of properties will have a program or something like that, where they recognize a lot of their sponsors, very common. So again, that one’s going to range anywhere from kind of less than a penny to seven cents per per impression.
On site signage, very similar, I assume pretty well, every event that’s on the call here probably has a signage as an asset and an inventory. So again, somewhere in that kind of less than a penny to seven cents per impression is the industry standard anyways, so.
So using kind of those industry standards, using your penny per impression as a bit of a benchmark, you can start to develop a bit of a rate per impression, or CPM for your different assets and that really is kind of the first variable in the equation of trying to understand what all your assets are worth. The second is the reach and how many people is that is that particular asset reaching and that obviously, that’s going to have a big influence on what a particular asset is worth. But in the previous slides, we were talking a lot about, you know, different ranges for values on different assets so, obviously, you know, the people that are on this call want to, they want to try to generate as much value out of their their sponsorship assets as they can what sort of factors do you think kind of can influence that value so that they can get on a little bit higher end of that that range as opposed to, you know, on the lower end, where you’re kind of talking less than a penny or so.”
“You’re saying from a subjective or objective standpoint?”
“Well, both I guess.”
“I think, subjectively I think that the question is, what is an impression really, what is the value that people are getting from it, I mean, I don’t know, if I know what you’re going to talk a little bit about the concept of loyalty, I think that sometimes being a smaller event, and, you know, I know a lot of people on the call may say, hey, we’re a smaller event, it’s just me, it’s just two people, you have a big advantage, you may think you have a disadvantage, you have a big advantage. And the advantage is by having less sponsors, or less people being inclined to be involved and also potentially being able to get more out of it, there’s a tendency to have a high level of loyalty and loyalty makes each of those impressions more valuable, if people are going to be at, you know, a fair that you have, and there’s only two companies that are there, people are going to feel pretty good about the fact that a business has stepped up and got involved in that library initiative, or entrepreneurship event, or whatever that would be. So I think loyalty is a factor, I also think duration’s a factors. So, you know, is an impression, what’s the length of time an impression is? Is an impression one minute or one hour? And they’re very different. So if somebody you know, is it’s sustainable. A sign at a basketball game that somebody’s looking at, for two hours, that’s a pretty powerful impression, as opposed to something that, you know, you may turn by, in a news literally, in an old school newspaper, scroll on your iPhone and see it for a second, so says a lot of apples and oranges there. So I think, you know, sustained, duration, loyalty are a couple of factors that definitely played, right.”
“So with the reach, you know, some assets are going to be a lot easier to measure the reach and we talked about the website before, very easy to know exactly how many people are coming to a website and seeing a particular page, you know, things like signage, a lot trickier. So in those cases, you know, an educated guess, I guess it’s probably best to determine kind of what the reaches.”
“Yeah, you know that’s a really good point, like, people are very sort of terrified of making educated guesses, you know, terrified of the concept of projections, and you do it all the time it’s predicting a score in the Super Bowl, people aren’t afraid to say, what’s your prediction, I predict it’s going to be 30-23, they don’t panic, don’t say, well, that’s crazy. I don’t know what the score is going to be. It’s a stupid question. You can’t ask me. I’m not going to answer. Well, what’s your projected attendance at a festival? Well, I have no idea, how can I project? Well, you had 20,000 people last year. Well, but it could range, it could. But you have a bunch of factors that predict that and use the word approximate or estimate. So you can make all kinds of estimates, you know, what’s the value of my sign or what are the impressions? Well, it’s approximately, approximate’s a great word, approximate has a lot of range to it. Estimate, I predict, I project, it’s approximate. You’re on solid ground but I think one of the problems a lot of people have, and seeing a lot of people on the call here is by being afraid to answer the question sponsors aren’t interested, if you want to know a really quick way for companies to walk away when you say, how many people are you going to have, you guys are doing a new event how many people are you going to have there? And the question will be asked that way, how many are you going to have? Tendency is to say, I don’t know, I’m not sure, or give a very vague range, oh, we could have any amount, it’s the first time we’re doing. Terrible answer. The answer should be, we’re gonna have approximately 12,000 people, so or 6000 or 2000, whatever the number you think, but that’s the right answer. You want to be definitive and concise. But leave yourself room and not exaggerate, but leave yourself room to say, or if things go well, we’ll have 12,000 people, or, you know, based on past, you know, use those other words, but I just think people are very fearful of projections and predictions and it costs you money. By not projecting or predicting results, a lot of your corporate partners are going to say, no interest, you guys can’t even, you’re not even comfortable saying what you expect is going to happen here. And I think people are very again, reluctant to do it, it’s similar to a budgeting process, it’s an exercise, you know, just go do it, right. So…”
“I know on the digital front as well, in some cases, you know, branded content on Facebook and things like that are, are identified as assets nowadays, and sold and in one way, very similarly, you can kind of go about doing that is looking at similar posts that you’ve had in the past, and kind of what the reach was of those those posts. And then if the if the sponsorship includes 10 posts that are tied with that sponsor and, and around that program, then you can just kind of multiply out and use that as a bit of a projection. So again, as Cary mentioned, there’s ways to make an educated guess. But it’s really important to, you know, progress the sponsorship process, otherwise, you kind of get stuck at…”
“Yeah, and it’s an educated guess it’s not a guess, it’s educated. You guys speaking, you know, they’re here have a huge education on your own property and event. So when you make a prediction, it’s educated, but make a prediction. And sometimes you’re going to be way off, so that, so be it. But, you know, you’re more likely than not going to be relatively accurate and, again, companies are looking for decisiveness they’re all looking for some for indecisive or vague and again, I hear that a lot, I hear a lot of companies, a lot of events and organizations are are terrified to come up with predictions and productions. And it’s to their own detriment, right.”
“So up to this point, you know, we’ve talked about developing a bit of a CPM, we talked about trying to define kind of what the reach potential is. So your spreadsheet is now starting to look a little bit like this, it’s populated with your benchmark rates, your assets, your descriptions, and you’d fill in the next column there with with your reach. So that’s really that’s two of the variables that go into determining what the value of a particular sponsorship asset is.
The next, and this is really kind of the full equation here, the third one that we haven’t talked about is brand value. And that’s the third variable and the one that’s a little bit, it’s more unique to sponsorship than advertising. Advertising is primarily built on CPM’s and reach and if you think of things like Google display ads or outdoor ads, you’re buying them because you’re reaching a large audience, you’re not necessarily buying them, there’s not really as much loyalty to a particular brand. Buying outdoor advertising through Pattison versus Astral not really a big difference when it comes to sponsorships. The more unique part to it is that there’s that brand value of the property that you’re sponsoring.
So the first two, you know, first two variables, a little bit more objective you know, you can look at things like benchmarks and industry standards. You can do your best educated guesses on reach and things like that but brand value really gets into that more subjective and how I mean how do you try to determine what’s our brand worth and how is that elevating the value of our sponsorship assets.”
“l think loyalty’s you know, again we talked about earlier, loyalty, you know NASCAR’s sort of known for this, if Jeff Gordon drives a Tide car, his fans use Tide, they won’t use Cheer. Now you think, well, that’s ridiculous, how would they use Tide? What if they don’t think it’s a good product? They don’t care if it’s a good product. They’ll assume that if Jeff Gordon’s using and it’s a pretty good product and most products in general are pretty good. But there’s a real what’s the, there’s a real brand value to NASCAR that it has a direct return on investment for people that are tied into it and the same thing, two different levels of extending, It’s your point, someone’s not going to invest in a company because they bought an ad on a particular Billboard. It doesn’t even make sense to say, Oh, well, I’m gonna go to that restaurant because I like Pattison and they bought a Pattison billboard, it doesn’t make sense. But because we’re in, you know, the entertainment business, there’s people that have an affinity or get attached to your brand and ultimately they’re gonna, that’s going to impact decisions. And there’s activations on site and there are certain giveaways and there’s sampling and there’s booths and there’s all kinds of things that allow connectivity, an ability for companies to showcase that. So there’s lots of things that you can do an event event with sustained period of time and people are there that sort of help define what that brand value is. And it is something different. It really is hard to say that again, radio or newspaper and it’s why sometimes on radio, you’ll have a, some of the most effective ads or you’ll get celebrities that are speaking, you know, Matthew McConaughey he does car ads, Derek Jeter did until Gillette ads for a while, they do that, you know why are these companies, why is Tim Hortons spending millions of dollars to have Sidney Crosby. They’re not doing it for their health, they’re doing it because the belief is that if Sydney, if Tim Hortons, if I likes Sidney Crosby and Sidney Crosby likes Tim Hortons therefore I should like Tim Hortons and there’s long history of proof that that works. So again, there is you know, and if you don’t have access to Sidney Crosby at your festival, the fact that people love the Winona Peach Festival, that can be enough, that if I love the Winona Peach Festival, and there is a company that is selling, you know, Telus is sponsoring Winona Peach Festival, well, maybe I should like Telus and plus you’re in a good frame of mind when you’re at that event, you’re having fun, you’re doing a lot of other things that may be conducive to buying a new cell phone.
So and I know I kind of answered it in five different ways there but I think that it’s important that you guys understand, and I’m biased. But I think there’s a lot more brand value and the things we’re talking about. I’m a big believer that sponsorship is generally a really good investment. If you guys as events make sure you deliver as opposed to some static advertising. And by the way, including online I generally think sponsorship and a lot of ways is better than advertising on Facebook because Facebook is no different than advertising in the Toronto Star in the sense it’s not loyalty very few people are going to say well I love Facebook and I saw an ad on Facebook therefore I’m going to buy those cosmetics it doesn’t tend to go that way but again you become a fan of a team or an event there’s a direct connection so I think in this area that brand value’s really important it’s real, it actually has, affects buyer behaviour.”
“Another one we were talking about before we came on was targeted and niche and I know you were mentioning example with the Toronto Rush and how you know, because it was so niche and targeted that you know brands could see the real value.”
“Yeah so we work with, we helped start Ultimate Frisbee. So I know some of you guys may play Ultimate Frisbee and we were involved about five years ago in starting the ultimate frisbee league throughout North America and Toronto Rush, one of the marquee teams and so from day one very few sponsors and then Telus came on in a big way and people that played ultimate talked about how cool it was that Telus was associated with Ultimate Frisbee and they felt really good about it and that translated into behaviour. They weren’t talking about tell us being a better provider than Bell, it wasn’t in the discussion, so the person that switched to Telus didn’t, so if they’re the same, now Telus is worse and if they’re similar and Telus supports ultimate and I’ve been playing Ultimate Frisbee my whole life and it’s an emerging sport, why would I not buy Telus, you almost have to find me a reason to not use Telus and again a lot of you guys have very interesting niches and there’s people that are passionate about those niches so I think what you have to do is convey to the sponsor convinced the Telus’ of the world that this is real, that if you do engage and you are a part of this, it’s going to have a real business effect. So it’s good on its own but Telus isn’t a charity and again I think we talked about this or you know, we will throughout the series is one fundamental mistake and municipalities are as bad as anybody is saying, Hey, can you do us a favour and support us, that’s a terrible mindset, it’s a very poor approach, Telus doesn’t want to do you a favour and if they do do you a favour, it’s not sustainable. So that’s not a healthy way to have a partnership. Partnership is is good for both parties and again, what’s exciting is what you guys have to offer that there’s, you know, you’re all, many of you are Ultimate Frisbee examples. You’re not, we’re not dealing with Maple Leaf Sports Entertainment on this call or big monstrosities. We’re dealing with organizations that target smaller groups and segments and again, it’s exciting. But you know, you guys are listening, you have to believe in if you feel like, Hey, we don’t have a sponsor, and this company is doing us a favour, or we need to bring in more sponsorship money and let’s get people to help us out, I think I said for those who are in, there’s way better charities. So I would say if any of you guys are asking that sort of shame on you guys let people support the hospital. Like there’s a lot better charities, if it’s a charity to be investment, it shouldn’t be an event or municipality or sports. If it’s a business investment, that’s a whole different thing.”
“The brand value, i guess, is really where organizations can compete because we know we talked about the reach, you know, if you start trying to get into competing on reaching, you’re going to lose to Google or Pattison or these organizations that have tremendous reach. But it’s really, if you’re able to articulate that value, like I said, that’s where the CPM’s go up, that where the brand value can go up. And that’s where…”
“That’s where you guys have a competitive advantage, you guys have a huge advantage. The other the other forms of advertising can’t compete on brand value. So you guys have a big advantage. So, you know, but not everybody uses.”
“So we talked a fair bit about, you know, this objective versus subjective thing and I know this is kind of another example, you know, we talked about a fair bit that it’s not necessarily about being the best product and we also talked about at the beginning, you know, it’s not necessarily about how much how much it costs to produce. So you know, the example being you know, Bic razors versus Gillette razors, cost to produce probably pretty similar and the quality of the shave that’s going to going to give you is probably pretty similar maybe Gillette’s maybe marginally better but prices 10 times more expensive, you know, same thing with Toyota and Lexus, most people buy a car to get them from from A to B. Toyota and Lexus are probably gonna do pretty well the same job of getting you to A to B, but some people opt to buy the Lexus so that’s really kind of that subjective value, I guess in play.”
“Yeah and it works. People become attached to their brands. They believe that Molson beer is better than, Molson Canadian is better than Pabst Blue Ribbon when they really don’t know what they’re talking about but they’re tied to Hey, I’ll get a Canadian, you know, give me a Coors Light, it’s give me a or i’ll go to Tim Hortons or like you said on Gillette razors because Derek Jeter used them so I’m saying it’s effective. People have their favorites. They have their passions, they have products that they believe in. And you know, one thing I would say, you know, if you guys that are sitting right now you’re sitting listening to this look, or, you know, you may think, well, my office doesn’t have logos all over it and I would challenge you, I say you have logos all over here. So when you turn on your computer, there is a Microsoft logo that comes up. When you look at your computer, I’m looking at an HP logo right in front of me and turn your phone on. There’s an Apple logo that comes on. When you go to your search engine there’s a Google logo that comes on. When you stand up you have Levi’s on your pants and Under Armour on your shirt and Tommy Hilfiger on your under shirt, and whatever Nike on your shoes. And Toyota, when you get in your car, you have Toyota in the car. And you have a brand name. So what I’m saying is, it’s inundated. So anybody who doesn’t think in the pen you’re holding as a staples logo on it, and it doesn’t stop. So I think people somehow think that they’re unattached to brands. And that because we’re not walking around, and there’s a big McDonald’s logo on my wall that somehow I’m unaffected, whereas you probably where you’re sitting right now, you can probably see 100 logos, 50 logos. So people are really attached to brands, it has an impact and it’s not coincidental that when you turn your phone on Apple, make sure you see an apple, they don’t have to have an Apple, they could have a blank screen. Why do they do that? Why would they possibly have an Apple? It’s not, why do they do that it can be a blank white screen, it could be a landscape shot, or they do that they do that because they want that to be in your head that you associate and you have a certain affinity to that brand.”
“Another subjective point about, you know, increasing the value on the subjective is, you know, the results of those sponsorship might vary quite differently, you know, amongst different companies. So, you know, if Tim Hortons acquires one customer one time, that might only be worth a few dollars. If Toyota gets a customer, Lexus gets a Toyota that could be thousands, thousands of dollars just from one customer. So part of that subjective value also comes from what’s the the actual results of this sponsorship worth to that company?”
“Well, it’s also I think, there’s a big and again, I probably straying off topic a little bit here. But there’s a big misconception and someone says, Well, you know, $10,000 is a lot of money for Swiss Chalet to spend on sponsorship, or for Toyota. Well, you’re not Toyota. In other words, $10,000, people tend to think of themselves as if $10,000 would be a lot of money for you, the person that we’re talking to, right now, why is $10,000 a lot of money. It is if you can’t measure a return, but if you feel like you can sell a car, as you say, or sell two cars, or sell three cars, it’s a very small amount of money, and you just have to demonstrate that you can do that, that you have an ability to sell cars as a result of sponsorship, but I think people can tend to get caught up on kind of, as you said, what’s a lot of money to an individual company, or, you know, can we really price it at that, I think it really, you’ve got to make sure the values there.”
“So just just wanted to kind of quickly go back to our equation here. So, a brand value, you know, as as abstract of a concept, and as tough as it can be, to really define in the purposes of our equation here is expressed as a multiplier. So, it might be a 1.5 times kind of the value of what that traditional media might be worth or it might be five times in some cases. So that’s really the exercise that you guys have to do as experts of your organization’s, your properties and assets, is trying to determine what that brand value multiplier is.
So that kind of, so now that we have that, we’ve got our CPM, we’ve got a reach, we’ve got a brand value multiplier. Now, that’s going to give us kind of what the value of the asset is. So it’s important to keep in mind that there’s, this again, this is there’s an art and a science to this, it’s not, there’s no universally accepted way to value assets, it’s not completely 100% objective, we’ve tried to, you know, throughout this presentation, kind of show the, the art and the science, the objective and the subjective. But it really is a mix of both. And when setting kind of values and when determining, you know, what to include them in a proposal or something like that, you know, we also tend to, you know, to aim a little bit on the high side as well, because just kind of baked into the sponsorship process is negotiation and discounting, and that just tends to kind of come with the territory, it’s also very, if you, if you kind of go too low off the bat, it’s very hard to increase, it’s always, you always have that option to come down in the negotiation. So as much as you know, we’ve shown kind of ranges on the low end of the high end for different inventory and coming up with the brand value, probably safer to the game a little bit higher than contain well.
So up to this point now, we’ve now kind of talked about what sponsors wants and how to understand what they want. We’ve also talked about what do we have to offer them. So that kind of the natural question is, okay, well, how do we, how do we articulate that to sponsors. So Cary talked a lot about, you know, having to confidently articulate that value as being really the only way to convince a sponsor that a partnership is the right thing for their business.
So, how to articulate that so we’ve kind of, at least as an introduction, we’re going to talk about this in a future episode, but at least as a starting point, you want to think of it in these kind of questions in starting with why, and then your first meeting with a sponsor is really talking to them about their business and doing a bit of that needs analysis, what has worked for them in the past, what objectives are they trying to achieve? So the first question you want to try to answer is, why should they even continue the conversation? Why do you see an initial fit for a partnership, and why should they continue to listen.
The second is who so really important to that particular sponso is they want to know that somewhere in the audience, that your property or event represents, there lies some of their potential customers, so they want to know who’s at your event, they want to know as much as you know about them, they want to know how many people are at your event, how many people they’re going to reach. So the more you know about the people that are coming to your event, the demographics, but also, you know, the psychographics, and the behavioural kind of stuff, the better, you’re going to be able to articulate to that sponsor that your potential customers are here. So a partnership makes a lot of sense.
So the other ones, when and where, we talked about that being, you know, a bit of a difference between advertising and sponsorship is the when. So in outdoor advertising with billboards, you might be reaching people, when they’re sitting in their car, they’re on their way home from work, or they’re hungry, you know, sitting in traffic, maybe not the best frame of mind to be in, but when you’re at a hockey game, for example, or a basketball game, they’re reaching people for a pretty good duration. But you’re also reaching them when they’re in a really good mood. So that has to be worth something to.”
“Yeah, and I just touch on, we only got, I think, 10 minutes or so to go here. So I don’t want to get into length, you could do a whole hour on that topic. But I think people are in a good frame of mind when they’re at your events, typically. And I think that has a value, hard to define, you know, and this is where, again, people say, Well, what is that worth? Something significant, and it depends on your event and what it is, but I think there’s nothing wrong with saying that one of the advantages of partnerships with us is the frame of mind people are in when they come to our events, I think that has an impact onto itself.”
“So along the same lines, as the, where are the people when you’re reaching them, you know, in the case of most of the people on this call, it’s probably you’re reaching people when they’re on their leisure time, you’re reaching them when they’re with their friends or family out of their home. So that has to be worth something, as opposed to being interrupted and disturbing them while they’re listening to the radio, or TV or at home, or things like that. So, the when and the where are both important.
So you’ll see, the next one being what, tends to be, you know, people kind of jump the gun a lot and jump to the what right off the bat and say, here’s our gold package, these are the assets that are included and that’s really the what, the what is the inventory that we’re going to use to help activate your brand to our audience. So you want to keep that for a little bit later and once you’ve answered all those initial questions first, but then you do want to say, you know, these are the assets that we think align with your objectives and this is how they’re going to reach your potential customers in our audience.
And then the last one being, how, how are we going to define success? So in the initial meeting with a potential sponsor, you’re trying to understand what their objectives are, and what would a successful partnership look like to them, and you want to kind of close out, articulating that value to them saying, this is how we’re going to define success through this partnership.
Great. So that kind of brings us to the end of the presentation for today. So hopefully, you know, the takeaways are that, you know, there’s, there’s an objective way to kind of go about valuing sponsorship assets. But a lot of it is more of an art and trying to understand that abstract concept of brand value and what your brand is worth compared to buying just traditional advertising. So hopefully, some good takeaways coming from today.
So with that, we’re going to move into some Q&A for the last few minutes here. So Rebecca, any questions?”
“Yes, so we had a comment from our live chat actually just touching on the potential reach that your event could have and they mentioned that it’s much easier for indoor events to predict crowd size as compared to outdoor events when weather can really mess things up. So do either of you have any comments and thoughts on that?”
“Yeah, I think my comment is, make predictions. So I hear that, but you have to predict based on, you know, typical what the weather would be, and there’s a range and if the, you know, the other thing too, and you make predictions, you can make predictions based, they can be optimistic projections, you know, to say that we predict that we’re going to have 20,000 people at our event, people understand that it’s weather permitting and that’s going to have an effect if it’s and, you know, if you have 20,000 one year and you have 8000 the next year because of the weather, I think people understand that. So, again, I think that the mistake to me is to either not predict or to be overly cautious and say, well, we’re gonna have 2000 people because we’re basing this on a thunderstorm for the whole day. Okay, that’s the wrong prediction. Yeah, I could happen but the prediction is that in four out of five years, there won’t be rain. So if in four to five years there won’t be rain, that means there’s an 80% chance there won’t be rain, that means that’s your prediction. So I say that’s the answer. So to me, I guess the short is easy to you know, I think any event that you have even if it’s a first time event, they’re easy to predict, as far as traffic just don’t get caught up on that. I think there’s, it’s something you have to sort of get yourself past.”
“So our second question, this individual wanted to know, if I readjust my evaluation that I’ve used in years past, should I grandfather the pricing to current partners or negotiate?”
“Really good question. I think case by case, I think there are, grandfathering is a good concept. Oftentimes, where you have companies that have spent, you know, you may look at it and I think what that allows you to do is comfortably change prices. So let’s say you have a sponsor and they’ve come in for $500 and you feel like they’ve way underpaid. Your value’s $5,000 but you don’t want to lose Home Hardware because they’ve come in at $500. And they’ve been doing it for 10 years. And I think it’s a way that people can appreciate. So if you reprice it at $5,000 and Harvey’s comes in and they find out that a company was paying less in theory, I think people can appreciate well, that was a grandfathered rate. That’s only for companies that started prior to 2018. So I think it’s an advantage to do that and I think it’s a good way so, because the argument is, don’t be afraid to raise your prices and if you feel like there are certain organizations that should be grandfathered to help you do that, I’d say absolutely. Go ahead. Do it’s a great question because it’s often one that’s misunderstood or somebody would say, well, we have to raise our prices for everybody I think there is some remember too that company may have paid you $500 for 10 years which is $5,000 and they’ve done a lot of other things when other companies wouldn’t have so I think there’s it can often be warranted.”
“So another question for our chat, what time of year is best to approach potential sponsors? This individual says they’ve heard everything from too early, too late, what are kind of your thoughts on that?”
“It’s never too early or too late. I think December is the only time it’s probably not great. So you’ve got the good news is you pretty much got 11 months in a year where, so anywhere from the beginning of January to the beginning of December, I think again December you know, December’s unique probably, even though just the last two and a half, three weeks of December, but any other time is good. And if you’re, you know, you say too early. So let’s say you go and approach RBC and you have an event coming up in June and they say, our budgets are set, well, then talk about next year, don’t leave the meeting. So they say, well, our budgets are set for this year. Say great, what about the 2019 event? Why don’t we talk about that, if that’s the case. So and, you know, they’ll tell you if you’re too early. So if you go talk call somebody now in January, and it’s a company that makes decisions 60 days before let them tell you that I think part of the important thing out of that is that companies are all different, they have different fiscal years, some plan well in advance, some do last minute again, you sort of have to, for lack of better word, get it out of your own way. And don’t worry about as much about being too early or too late. It’s just move forward and let, companies will tell you that they’ll say, well, you too early or too late. And if you’re too early, there’s a time. That’s right. And if you’re too late, the good thing in most cases here, you guys have multiple years and multiple events, I guess if it’s a one off event, it could be too late for that event. But maybe something else.”
“So another question we had was, who should pay for the signage and activation at an event myself or the sponsor? And how does that factor into evaluation assessment?”
“Great question, always the sponsor. So two things are additional costs. The two additional things are tax HST, and production installation. So the cost should be if you get somebody to spend two thousand dollars, and then it ends up costing you 1500 dollars to put the signs up and build the signs, It’s really a $500 sponsorship. And then good news just like like taxes, people are used to paying for production, but make it really clear, you know, the cost of this is $1,000 plus production and make sure that’s up front. That’s again, a good question, because people tend to be confused on that. But to me, it’s a really clear answer. I mean, once in a blue moon, there’ll be a company that says, I need to know the all in price, including production and when they do make sure that that price goes up, evaluate, say, okay, it’ll cost 1500 dollars to produce this. So I’m going to raise the full value of 1500 dollars. But those cases are you really want to be in the mindset that production and taxes are extra, and that you can net the amount so if it’s $1,000, that you can clear $1,000.”
“And then kind of our last one from the chat, someone indicated that from their experience, certain sponsors only want local representation, they don’t want countrywide representation. What are some..”
“I guess, just from a sponsorship standpoint.”
“Presence? I think if I mean, not sure if I understand the question exactly. But I think if it’s saying to talk to somebody local, I think what I would say on that is you always want to start locally. So for instance, I think the mistake is to take some of these big brands and say, and this, by the way, is very, you know, good for most of you guys listening this. So if you’re in Oshawa, and you may think, I don’t know, Canadian Tire, I have to call somebody in Calgary, you don’t, the person that’s going to make the decision is in Oshawa, it’s the manager of the Canadian Tire in Oshawa or maybe the group manager, the regional manager, they’re not going to make head office decisions are not going to be made or things going on in Oshawa. So the tendency is start locally and don’t stress yourself out about hey, I’m not in you know, sending an email or filling out a form to Canadian Tire in Calgary is not going to get the person that’s going to sell that package is the person that runs the two local Canadian tires that are in your city.”
“So that’s actually a great segue into our next episode, which coming up February 21, 2pm, we’re going to talk about who to reach out to for sponsorship and just talk about the prospecting process. So that’s coming up. But that kind of wraps up our episode for today. So thanks very much again, to Central Counties Tourism and Sport Durham for giving us the opportunity to host this webinar series. And we welcome you feedback from everybody. And again, if you have any questions, didn’t get a chance to get a question to the live chat. Go to cosmossports.com and you can find our emails there and happy to clarify or answer any questions there. Otherwise, we will see everybody February 21st.”
“I would just sorry just to add one thing before we go. I mean, the other thing too, is if anybody I mean, a lot of this comes in, you know, it’s pretty general and generic. I mean, if anybody wants to specifically talk to us about their specific situation, you know, we welcome that. So, you know, reach out to Evan or Rebecca or myself to say, look, we have, you know, this wasn’t addressed on the webinar, or we have specific things we do on our end, or, or maybe we could use some help in some other areas. So, again, the webinars are going to hopefully be very helpful, but they’re not perfect, and they’re not all encompassing, and we’re talking to a lot of people at once. So I think if, again, anybody wants to talk to us individually about their situation, we’re easy to find.”
“Thanks very much, everybody.”