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Sponsorship Valuation Essentials
Valuation Secrets Revealed!
By Chris Baylis of The Sponsorship Collective
Chris Baylis Sponsorship Expert
• Self proclaimed Sponsorship Geek
• President and CEO of The Sponsorship Collective
• Head Sponsorship Coach inside The Sponsorship Academy
• On a mission to help sponsorship seekers to develop best in class sponsorship programs
• Have helped properties across Canada and the US to raise millions of sponsorship dollars
I’m sorry…
Valuations can be boring but…you asked for this!
When I say “sponsor” I mean people in these areas…
• Brand management
• Business development
• Marketing
• Product placement
• Sales
• Sponsorship
• Communications
When I say “sponsor” I DO NOT mean people in these areas…
• Foundation
• Corporate Giving
• CSR
• Community Investment
• Online forms
Valuation is a Process
Property Identification
Inventory Building
Audience Identification
Tangible Values
Building Activation Ideas
Property Identification
What is a sponsorship property?
Sponsorship Property
• Sometimes refers to the organization selling sponsorship (I prefer “rights holder”)
• Events, programs, buildings, teams, parades etc. against which sponsorship is sold
• Rights holders can have many properties, each with their own assets and audiences
Property Examples
• Galas
• Marathons/Races
• Festivals
• Peer to Peer fundraising events
• Naming rights
Not Properties!
• Logo on website
• Eblasts
• Giveaways/samples
• Free product
…these are assets
Property Identification
• Outline all of your properties
• Decide whether or not to combine similar properties into one large property
• Properties need to have the same audience to be combined
• Write the name of each property on a giant post it and get ready for inventory building!
• Always do multiple properties
Inventory Building
Inventory Building Basics
Get your entire team together:
• List each property on its own page
• Add everything you can sell to sponsors
• List everything you give your audience, in kind sponsorship and buy for your property
Inventory Building Basics
Give your team a stack of post it notes and ask:
• Where can we put logos (5 minute timer)?
• What do our sponsors want more of and what do they hate?
• What does our audience want more of? • What can we do without ANY logos? • What do our sponsors want to achieve? • What actions do they want our audience
to take? • What do they want us to measure to
prove that we delivered?
Inventory Building Basics
• List every single idea you have, without exception
• Now look at your competitors and see what they offer to make sure you aren’t missing anything
• Reach out to at least 5 prospects and interview them
• Send a survey to your audience to find out what they want more of
• Aim for 50 – 150 assets per property • Hold onto this list…you’re going to
need it
Classify Your Assets Naming Rights (Name in Wordmark)
Presenting Rights (No Wordmark) Sampling Rights
Onsite Logo Placement Speaking Opportunities and Verbal Recognition
Logo Placement/Physical Advertising
Clothing
Webpage and Content Marketing
Database Marketing
Earned and Paid Media
Unique Experiences Employee Engagement
Audience Identification
Always This:
Property Audience Prospect
Never This
Property Audience Prospect
Always This:
Sponsorship Opportunity
Audience Prospect
• Cause • Team • Event
• 40 year old • High net worth • Mothers • Suburbs • 2+ kids • Prefer luxury cars
• Luxury car sales • Goal is to sell 25
cars this month
• The “general population” or “everyone” is code for “we don’t know our audience”
• Gen pop = lowest value possible
• Gen pop = requirement for a massive audience to extract value
Finding Your Audience
• Do you value an asset for the same amount if your audience is students vs physicians?
• B2B and VIP crowds are worth 200% - 1000% more than the general public (or more)
• 50 attendees who control corporate budgets are worth so much more than a room full of high net worth people
Why Audience Matters
“But we don’t have a big audience!”
“The rich is in the niches”
The solution is simple but counterintuitive: Stake out the smallest market you can imagine. This goes against everything you learned in capitalism school, but in fact, it's the simplest way to matter. When you have your eyes firmly focused on the minimum viable audience, you will double down on all the changes you seek to make. Your quality, your story and your impact will all get better.
Source: sethgodin.typepad.com
Don’t Take My Word For It…
40 year old, high net worth moms, who live in suburban Chicago, with 2 or more kids who play baseball
Now THIS is an Audience
40 year old, high net worth moms, who live in suburban Chicago, with 2 or more kids who play baseball
55 year old, partner track, corporate lawyers, who are responsible for bringing in new business and making purchasing decisions for their law firm
Now THIS is an Audience
40 year old, high net worth moms, who live in suburban Chicago, with 2 or more kids who play baseball
55 year old, partner track, corporate lawyers, who are responsible for bringing in new business and making purchasing decisions for their law firm
University of X grads, who studied X program, who in 5 years tend to work on Bay St in Toronto, making X salary, who buy houses in York Region and commute 2 hours daily
Now THIS is an Audience
40 year old, high net worth moms, who live in suburban Chicago, with 2 or more kids who play baseball
55 year old, partner track, corporate lawyers, who are responsible for bringing in new business and making purchasing decisions for their law firm
University of X grads, who studied X program, who in 5 years tend to work on Bay St in Toronto, making X salary, who buy houses in York Region and commute 2 hours daily
Newly minted tradespeople who are trying to buy a house, work in X trade, need professional insurance, plan to spend $5000 on new tools
Now THIS is an Audience
• 51% are aged 55 and older
• 69% are female
• 22% have participated in your event in the past 3 years
• 27% make more than $150K/year
• 76% have no children living at home (under the age of 18)
• 21% bank with Royal Bank, 19% with TD, 17% with CIBC
• 21% drive Toyota, 20% Ford, 18% Honda, 17% Chevrolet
• 34% use Rogers, 23% Bell, 21% TELUS
• 61% take 3 or more vacations per year (62% US, 30% Europe, 22% Caribbean, 61% Canada)
• Respondents were most comfortable with pharma, retail and financial services as sponsors
Now THIS is an Audience
In the Next 18 Months…
• 36% will buy a new vehicle
• 12% will switch banks
• 10% will apply for a mortgage
• 54% will renovate their home
• 80% will stay in a hotel
• 81% will buy airline tickets
• 56% will buy insurance
• 82% will book a vacation
When you know your audience…
• Test drive a truck, free lift ticket
• Tagged in sponsor’s database
• 23 sales directly from this event
• 23 X $30,000 = $690,000 in sales
• Sponsor has no interest in “everyone” only their target customers
Case Study Alert!
• Teaching students financial literacy
• Do you think the big banks would be interested?
Case Study Alert!
• $25,000 • Took a year to close • A dozen meetings and
applications • Impact reporting and follow
up • One year at a time • And then…
Then We found our REAL audience!
Our Volunteers!
• Up and coming professionals • Controlled small budgets • Highly mobile, of interest to
recruiters • Partner track, being groomed for
leadership • 125 volunteers vs 10,000 students • Do you think the big banks were
interested?
The Rich is in the Niches!
• $30,000 (multi year!) • One phone call • No proposal, no application • Sponsor activated, which paid for
hard program costs (volunteer recruiting, our second biggest challenge)
• Fulfillment report required
How do you get this information?
What We Do
• Pro survey monkey account ($350/year)
• Two eblasts to the database
• A chance to win one of three $25 gift cards
• 30+ data points with 95% confidence interval, 5% margin of error
What does this have to do with valuation?
• There is no independent value of a logo in the absence of audience data
• Every audience and every organization has its own value for every asset
• No audience data? No value!
Tangible Values
• Group your assets into categories on the left side of your spreadsheet
• Across the top, add columns for the following:
• Traffic/Views
• Cost per view
• Units
• Total
• Hard costs
• Brand value (more on this later)
• Do this for each audience
Tangible Values
Something Like This…
Asset Cost per
view Total views Units Value Hard Costs
Naming Rights (Name in Wordmark)
Naming Rights for Property $0.0063
50,000 1 $313.04
Naming rights for Wine Sponsorship $0.0047
10,000 1 $46.96
…Don’t worry, you’re getting a template!
Sample Assets Branding and Logo Placement Social Media Physical Communications
Website (single) Twitter Letter
Website (multiple) Facebook newsletter
Print program (single) LinkedIn Magazine ad
Print program (multiple) Guest/sponsored blog post Earned/Paid media
Signage at event entrance Instagram Print
Sign with multiple logos Radio
Sign with corporate tagline Digital Communications TV
Signage along paths/walkways eblast with logo
Branded welcome banner Logo in newsletter Misc.
Signage on promo posters Article in Newsletter Breakfast sponsor
Mention from mic Lunch sponsor
Logo on jacket/vehicle/exhibit Wine sponsor
Product placement Speaking opportunities
Sample at table Address the crowd opening reception Naming Rights, includes
Sample given out directly by sponsor Address the crowd after the session Title sponsor on all outgoing comms
Sample in delegate bag Host breakout session Naming of event
What assets are missing?
• Hard costs must be added to your valuation!
• Wine sponsorship includes all hard costs plus all tangible benefits to find the value
Tangible Values
Valuation is a Process
• Start with the question “How would my sponsor get this exposure without me?”
Valuation is a Process
• Start with the question “How would my sponsor get this exposure without me?”
• Logo placement = “awareness” look to small ads in publications targeting your audience
Valuation is a Process
• Start with the question “How would my sponsor get this exposure without me?”
• Logo placement = “awareness” via small ads in publications targeting your audience
• Newspapers, magazines, Google Ads, Twitter Ads etc.
Valuation is a Process
• Start with the question “How would my sponsor get this exposure without me?”
• Logo placement = “awareness” via small ads in publications targeting your audience
• Newspapers, magazines, Google Ads, Twitter Ads etc.
• Sponsor wants an email address? How much will it cost them to get an email address without you?
Valuation is a Process
• Start with the question “How would my sponsor get this exposure without me?”
• Logo placement = “awareness” via small ads in publications targeting your audience
• Newspapers, magazines, Google Ads, Twitter Ads etc.
• Sponsor wants an email address? How much will it cost them to get an email address without you?
• Sampling? Look to events attracting the same audience as a starting point
Valuation is a Process
• Start with the question “How would my sponsor get this exposure without me?”
• Logo placement = “awareness” via small ads in publications targeting your audience
• Newspapers, magazines, Google Ads, Twitter Ads etc.
• Sponsor wants an email address? How much will it cost them to get an email address without you?
• Sampling? Look to events attracting the same audience as a starting point
Before we Look at Values!
• These are broad ranges that most clients fall within
• These are not YOUR values! • Offered as a guide to give you a sense of
your value • You must still go through the process
discussed today to find your value
Sample Values From the Field
Source Demographics Cost per view Digital (CPM) The Province (Vancouver) Av age 25-54, 54% 75K/yr 1.1 Cents $20/1000
Montreal Gazette Av age 25-54, 41% 75K/yr 1.3 Cents $20/1000
LA Times 51% Male, 2.2M $100k/yr 1.4 Cents $10/1000
New York Times 58.2% Male, 64.1% aged 35 +, 20.8% $250K/yr 4.3 Cents NA
Macleans Print: Av age 48, 90K/yr. Digital:Av age 25-54, 64% M, 94K/yr 1 Cent
$18/1000, video: $32.40
What did you notice?
• Pennies per view…for an ad! Logo placement would be far less
• None of these newspapers claim “gen pop” as their audience because a cross section of the population is not valuable
• Simple branding requires a tremendous level of traffic and your sponsors can bypass you and go direct to source
• Would you rather a logo on a charity website for 10K or a video sent out through Macleans for the same price?
• Digital ads are averaging 2 cents per view
Did you know?
That a sponsor can run a social media campaign right now, targeting your followers and audience, without paying you a thing?
Cool Social Media Tricks
• The “ads” or “insights” section of social media gives you TONS of audience data!
• You can run a campaign targeting your audience to see exactly what a sponsor would pay
Cool Social Media Tricks
Cool Social Media Tricks
Cool Social Media Tricks
Values by Social Media
Social Media Broad B2B
Twitter $3.50 CPM per message $5.00 CPM per message
Facebook $0.59 CPM per message $1.00 CPM per message
LinkedIn $2.00 CPM per message $7.50 CPM per message
Guest/sponsored blog post 0.05 0.1 $0.25 $0.50
Values by Audience Grouping and Asset
Broad B2B
Asset CPU Low CPU High B2B CPU
Low B2B CPU
High
Branding and Logo Placement
Website $0.003 $0.05 $0.05 $0.25
Print program $0.003 $0.05 $0.05 $0.25
Signage at event entrance $0.003 $0.05 $0.05 $0.10
Signage along paths/walkways $0.001 $0.003 $0.003 $0.005
Signage on stage $0.03 $0.05 $0.05 $0.50
Signage on promo posters $0.003 $0.05 $0.05 $0.10
Mention from mic $0.02 $0.04 $0.04 $1.00
Values by Audience Grouping and Asset
Broad B2B
Communications CPU Low CPU High B2B CPU
Low B2B CPU
High
eblast with logo $0.003 $0.05 $0.05 $10.00
Logo in newsletter $0.003 $0.05 $0.05 $5.00
Article in Newsletter $0.05 $0.08 $0.10 $5.00
Letter $0.10 $0.25 $0.25 $1.00
Earned/Paid media
Print Rate card of media 5% 15%
Radio Rate card of media 5% 15%
TV Rate card of media 5% 15%
Magazine ad Rate card of media 5% 15%
Values by Audience Grouping and Asset
Broad B2B
Product placement CPU Low CPU High B2B CPU
Low B2B CPU High
Sample at table 0.07 0.12 $0.25 $1.00
Sample given out directly by sponsor 0.1 0.2 $0.50 $1.50
Sample in delegate bag 0.05 0.09 $0.10 $0.25
Values by Audience Grouping and Asset
Broad B2B
Speaking opportunities CPU Low CPU High B2B CPU
Low B2B CPU High
Address the crowd opening reception $.05 $3 $5.00 $25
Address the crowd after the session $0.5 $1.5 $1.50 $3.00
Misc.
Breakfast sponsor Hard costs plus all other related assets
Lunch sponsor Hard costs plus all other related assets
Wine sponsor Hard costs plus all other related assets
Tickets Face value cost of tickets
• Add all of the views for tangible assets
• Multiply by the cost per view
• Multiply by the brand value
• Do this for all of your opportunities:
• Title sponsor
• Naming rights
• Wine sponsor
• Photo booth
Sample Value Ranges
When You’re Done, It Will Look Something Like This….
…But much much bigger!
Too Many Words for One Slide!
From the Mouth of Sponsors!
I’ve worked in sponsorship sales and now I work with a brand. The one constant I’ve learned is that asset values are never the same between properties. As a brand manager I can put a unique value to an impression, therefore I can give an asset a value. For ex: If I value one (1) impression at $0.10 and there is a sign asset visible by all attendees, then I can multiply $0.10 x # of impressions/attendees to get a value for that sign. Let’s say that over a season, there are 500,000 attendees. That prominent sign is valued at $50,000. But that’s not the end of the story, because as a brand, I’m not going to pay $50,000 for a sign valued at $50,000! The ROI is $0. Our brand strategy calls for a 3 to 1 ROI ratio to justify the buy. In this case, I’d value that sign at $16,666.66. But that’s also not the end of the story. It’s my job to get the highest ROI possible, so spending $16,666.66 on a $50,000 sign is average job performance, the standard. I don’t want to be average, so I’m going to value that sign lower. Just because I’m not willing to pay more than my 3 to 1 / 4 to 1 ROI, doesn’t mean there’s not another brand that values that asset higher. Now you have to find them.
“spending $16,666.66 on a $50,000 sign is average job performance, the standard. I don’t want to be average”
See for yourself: http://sponsorshipcollective.com/sponsorship-valuation-best-practices/
A Note About ROI
• Sponsors don’t want to pay 1 for 1 market rate for your assets
• Therefore, to raise $100K, best practice calls for $200 - $300K worth of assets
• This is why valuations, and brand value in particular, are so important
• Be ready to provide a fulfillment report proving the ROI to sponsors
Building Activation Ideas
How to Uncover Activation Opportunities
1. Identify an audience niche or specific target market
2. Ask your audience: • What about their experience is positive? • What did they not enjoy? • What do they want more of? Less of? • Why are they involved with your property?
3. Brainstorm ideas that improve audience experience based on that feedback
Simple in concept, complex in practice
CIBC Activations It’s all about convenience and audience…
High Net Worth Female Golfers
• Very small, local health care charity
• Discovered 30% of their database was high net worth women, golfers, with kids, who regularly go to the spa, 96% would consider support of the cause in buying decisions
• Built an activation with a high end home builder for a contest for a day of golf and spas at the most exclusive clubs in the city
Why did these ideas work?
• Based on audience experience and feedback
• Logo placement was a small part of the package
• Very low cost (which is paid for by sponsors) but sold for a premium sponsorship fee
• Left a lasting positive impression on attendees and sponsors
• Easy for sponsors to see the value and easy for the property to report on impact, ROI and delivery
• All three parties win: audience, sponsor and property
Activation Costs
• Things like signage, shirts, photo booth, gift bags, wine/food etc. are all considered activation costs
• For some, 100% of these costs are passed on to your sponsors
• Your sponsors also need to account for activation costs (product, travel, giveaways etc.)
• You are NOT on the hook for activation costs…unless something goes wrong (or you didn’t do a valuation!)
Valuation is a Process, Not a List of Numbers
Property Identification
Inventory Building
Audience Identification
Tangible Values
Building Activation Ideas
Resources Coming Your Way
• Copy of the presentation • Valuation calculator
template
Questions?