Let’s Take a Beat Before Declaring a Sponsorship Measurement Tipping Point
A JohnWallStreet article last week noted that big companies including PepsiCo and AB InBev are working with sports sponsorship measurement firm FanAI to help determine their ROI from the hundreds of millions of dollars they pour into partnerships each year.
The article also notes that FanAI raised $3 million in Series A funding in November—an extension of its $8 million Series A round in November 2019—stating, “Industry insiders view the development as the latest indication that sports marketing and sponsorship is in the midst of a fundamental shift toward the same type of outcome-based performance-measurement approach that has transformed media buying—a change that could influence brand spending and will alter the way team and league deals are structured moving forward.”
As someone who has championed taking a true data-driven approach to sponsorship evaluation for decades, I would be thrilled if the industry is indeed experiencing this shift. But a bit more evidence is required beyond a single firm’s fundraising and new business success.
With major marketers such as Pepsi and AB, along with Coca-Cola, Dunkin’ Brands and others using its platform, FanAI clearly is offering a valuable product. However, the following declaration from JWS is simply untrue: “Until FanAI emerged in 2020, sports marketing and sponsorship professionals lacked the ability to connect real world transactions (i.e. not just those that take place in the stadium) to actual consumers.”
That ability has existed for decades—as long as marketing science has applied econometric analysis and predictive modeling to measure traditional media and marketing campaigns. What is true is that very few sponsors have taken advantage of those tools.
Having been part of a concerted effort to introduce a marketing-science based measurement service for B2C sponsors 10 years ago, I can attest that interest was almost exclusively limited to companies that were at the top of the list of sponsorship spenders, including AB and Pepsi.
To date, that situation hasn’t changed. The “fundamental shift” will occur when companies that don’t spend nine figures annually on sports sponsorships adopt the data-driven performance measurement methods that the big brands have long been interested in.
For that to happen, marketing science measurement solutions must make financial sense for smaller spenders, i.e., no company is going to spend $200,000 measuring a $2 million sponsorship. That is where tech-driven solutions such as FanAI can make a difference. Technology has made data capture and analytics more flexible and accessible than ever before.
Because of that, I’m optimistic that we finally may be on the verge of the sponsorship measurement tipping point that many of us have pursued for quite some time, but it’s too early to declare “mission accomplished.”