Marketing Procurement

Unlocking Value in Sports Sponsorship: A Procurement Professional’s Guide

Understand the Real Cost of Ownership

Beyond sponsorship fees, brands must understand and plan the lifetime of activation costs. “Activation costs are vital for maximizing the impact of sponsorship. Brands should budget properly to ensure full leverage of the partnership.” says Andrew Brember of Turnstile

With over 15 years of experience in Marketing Procurement, I’ve had the privilege of working closely with marketing and sponsorship teams, especially in the dynamic field of sports sponsorship.

If you’re navigating the complexities of this field, here are some insights that can help you maximize your investments and help your stakeholders achieve their strategic goals.

Context

In the 1990s, with fewer media channels and platforms available, sponsoring sports provided a concentrated and highly effective way to reach large audiences. While logo placement still matters today, sponsors prioritise deeper engagement over mere visibility, aiming to create meaningful interactions with fans.

The sports sponsorship industry has grown nearly 10-fold in the last 30 years – the USA market alone is now valued at $97.35 billion – transitioning from traditional, logo-based sponsorships to complex, multi-platform partnerships that include digital, social, and experiential marketing.

By 2030, the global sports sponsorship industry is expected to surpass $150 billion, driven by further technological innovations, expansion into new global markets and new sports, and increasing competition for audience attention.

Why? Brands’ main reasons for investing in sponsorships include:

• Audience reach and brand awareness
• Improving image and credibility
• Appearing more culturally relevant and trendy

Uncharted Procurement Territory?

A classic Procurement complaint is one of late involvement in projects, and (oh boy) sponsorship is no exception; in fact, you may be either completely avoided or involved at a point so late in the process that the potential for any commercial leverage is negligible.

Additionally, Procurement professionals can find sports sponsorship challenging when many decisions are driven by the emotions of high-level stakeholders (such as the CMO, Sales Director or CEO). With the inherent lack of RFP or competitive bidding, any resulting negotiation can be a high-risk, high-pressure situation.

Despite all this, sports sponsorship can be an exciting and highly rewarding area of investment for Procurement people to get involved, and I highly recommend taking the opportunity if you get it.

Identifying the Right Fit

It’s important to understand what your stakeholder wants to achieve in any procurement situation; for sponsorship the goal is either short-term improvements in brand visibility and/or long-term improvements in brand affinity; for this you should spend time understanding the brand’s consumers and how they are currently being reached with other forms of marketing.

Third-party measures to assess brand awareness and perception are invaluable and help sponsors gauge the effectiveness of their investments. One example is how often your brand is mentioned or viewed in traditional and social media in relation to the team, tournament, match or event. These can be provided either by the property owner or by an agency you appoint.

But cold performance metrics aren’t the full story in assessing if you and your partner match; ethical considerations are vital in sports sponsorship. The behaviour of team owners and players can impact your brand’s reputation. Ensure that the sponsored entity’s values align with your brand’s ethics, and that your contract reflects this too.

As Andrew Brember from Turnstile (sponsorship valuation experts) notes, “The biggest pitfall for brands is misjudging the true value of a sponsorship opportunity. Brands often fixate on metrics like media equivalency, ignoring crucial factors such as brand alignment and emotional resonance.”

Maximizing Activation Strategy

Sponsorship value extends far beyond logo placement; brands today activate partnership through digital and social media campaigns, combined promotional activities (like on-pack promotions), on-site fan experience, PR events, community and grassroots programmes, consumer offers and competitions and tailor-made media campaigns provide excellent value and showcase a successful brand partnership.

Brember adds, “It’s common for sponsors to provide in-kind services, expertise, or reach. For instance, an FMCG brand can promote a sports property in retail spaces, reaching beyond the core fanbase”

Conversely, poorly executed integration into broader marketing initiatives can result in a disconnected sponsorship effort.

”Simply sticking your logo on something is not enough, the sponsorship has to be supported and activated. The real power of any sponsorship is unlocked by engaging with the fanbase and establishing a base of trust from which the brand can then start a dialogue” says Andrew.

Marketplace Clutter

While the allure of a glamorous collaboration can be great, it’s worth taking the time to assess the impact your patronage will truly achieve with consumers. Major sports properties often have multiple sponsors, making it difficult for a brand to stand out.

Achieving meaningful differentiation from competitors in an overcrowded space requires creativity and strong partnerships. Do some research into the space being looked at in comparison to other owners and properties.

Hospitality v. Branding

Hospitality can be a huge upside on a personal level for C-Suite staff as well as those wishing to woo corporate clients. But we shouldn’t confuse the brand activation with job perks. Hospitality has its own value, but we should recognise it for what it is.

Indeed they should ideally be paid from separate budgets and cost centres. This may be controversial for some but it’s important in understanding property, price and RoI separately; this will make it clearer which parts of the sponsorship are not core to your acquisition and activation strategy and to challenge add-ons for what they are, even if you’re getting them ‘below list price’.

Navigating the Negotiation Process

• List aspects of the package on offer that don’t deliver the desired ROI and negotiate for trade-offs. As part of the deal, the sponsorship owner will normally segment and list the properties you will receive. These could include shirt sponsorship, perimeter boards, video screens, venue food and drink sales, player kits, branded areas, playing field logos, merchandise sales, announcements and (of course) hospitality suites.

Beyond the venue, things like media exposure, athlete endorsements, merchandising and tournament naming rights can all bring your brand to new audiences in completely new contexts. Featuring athletes in your marketing efforts not only boosts visibility but also adds authenticity to your campaigns.

• Formalising the above intellectual property rights will ensure legal use of assets and prevent unauthorized exploitation by third parties. These should never be left on the table, as they represent the principal benefit of the sponsorship.

Trademark use, copyrights, image rights, domain name rights, merchandising rights and event naming rights should be explicitly covered, preferably with the help of a lawyer experienced in this area.

• In sports sponsorship negotiations, understanding your own brand’s value is crucial. Articulate your strengths and benefits clearly, ensuring terms align with strategic objectives.

A good partner should be clear to both sides what these are, and you should not be shy in reminding your prospective partner the advantages of working with you beyond the money invested; quantify and value this as much as possible.

Include and emphasise the importance of your brand helping activate the partnership by finding new consumers in situations the rights owner could not reach without great expense.

Brember says: “It is very common to see a sponsor providing in-kind services based on their area of specialism, and/or expertise that they may have within their organisation. Cross promotion and reach are other key benefits that sponsor brands can contribute.”

An FMCG brand for example offers the potential for a rights holder to have their name and logo in prominent positions online and in shops all over the country, reaching far beyond the existing core fanbase of the property.

• A strong bidding strategy is essential. Set clear criteria (the parts of the property you want and contract terms) and limits (how much you’re prepared to pay), and always have an alternative option in place.

This approach ensures you maintain leverage in negotiations and avoid overcommitting. Using a BATNA model is an excellent idea, but you may find the ‘worst case’ options acceptable to your stakeholders slowly melt away when the price tag stays high. Cohesion is essential to a negotiation team’s success.

• Get Help: industry advisors and third-party experts bring peace of mind, trusted connections and objective benchmarks into your negotiation arsenal. Leveraging their expertise can open new doors and increase your return on investment.

Understand the Real Cost of Ownership

Beyond sponsorship fees, brands must understand and plan the lifetime of activation costs. As Brember notes, “Activation costs are vital for maximizing the impact of sponsorship. Brands should budget properly to ensure full leverage of the partnership.”

Clients may make disappointment an inevitability if they fail to leverage the deal into a maximised consumer experience, and under-budgeting is a common contributor here.

Data-Driven ROI

Today, brands have access to sophisticated analytics tools that allow them to track the effectiveness of their sponsorships in real-time. Social media engagement metrics, website traffic, and sales conversions can be directly linked to specific sponsorship activations.

Sponsors now use KPIs like fan engagement, content shares, lead generation, and conversion rates to evaluate the success of their investments. Analyse and track these regularly with property owners beyond implementation of a deal and discuss ongoing improvement.

Performance and Duration

How has the ‘sponsee’ performed in the past and how well will they perform in the future? A world champion might not win again in four years. Make sure you understand how long you’re locked in for and consider if fees are worth it when results wane.

Cancellations

Event Uncertainty: sponsoring live events involves the risk of cancellations or unforeseen changes (e.g., weather delays, pandemics), which can undermine the sponsorship’s effectiveness. Understand that these are part of the industry and work to mitigate any roadblocks.

Conclusion

Sponsorship is a long-term investment in your brand’s image, engagement, and growth. By carefully aligning with the right properties, activating sponsorships creatively, and negotiating confidently, you can unlock the full value of your sponsorship investments.

About the author

David Little has over 20 years’ experience in procurement. David has worked on several areas in Marketing, including Media, Creative, Influencers and Sponsorships. He is based in Stockholm, Sweden.