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Tuesday / November 12.

How to Calculate Sponsorship Value

How to calculate sponsorship value

Sponsorship asset valuation and measuring its possible effect is definitely more difficult than doing the same thing when preparing a direct advertising message. However, with the right approach, sponsorship can effectively promote a company and a new event brand.

 

What is sponsorship value?

 

Sponsorship valuation provides opportunities that companies do not regularly have access to via general marketing or advertising. It directly involves the audience in a conversation rather than simply providing them with information. It provides goodwill to the company and essentially adds value to the overall brand.

 

Reasons to calculate sponsorship value

 

Sponsorship itself, of course, is not a universal tool and can only be effective when combined with other communication channels. However, in some cases, it can produce a “wow” effect if the audience is chosen correctly. Participation in particular projects allows sponsors to appeal to a clearly segmented audience as they are incorporated into the event and can form the necessary associations to increase the value (ROI) of the brand.

Sponsorship may also generate media coverage that may not have been otherwise available to your event, etc.

 

What do sponsors expect from events?

 

Sponsorship offerings should comply with the corporate culture and policies of sponsors and their goals and, of course, contribute to their brand awareness and profitability. Given an event sponsorship proposal and the propensity of consumers to associate sponsors with the event they promote, select events that are appropriate for your sponsors’ brand, product, or corporate image. Sponsors offer funding, products, and services to support your events, trade shows, teams, non-profits, or other organisations and expect a certain profit from it, albeit not always directly.

 

Categories of sponsorship value

 

Standard sponsorship packages that contain promotional offers from the organisers may change beyond recognition over the course of the negotiation process. A company that often plans to get more publicity offers its own options for obtaining advertising rewards. Nevertheless, these are the most popular categories:

 

On-premise value

 

This is the quantifiable value of any and all measurable benefits that you are providing to the sponsor from a given onsite event.

 

Off-premise value

 

Sold off premise means something is being sold for a certain amount over cost. This also reflects the qualitative value of being associated with the event. 

Intrinsic values

 

The intrinsic value of an event is its fundamental value, the value the event has “in itself” or “for its own sake.”

You may also measure total consumption, covering both on-premise and off-premise perspectives.

Elements of sponsorship value

 

There are seven key sections of your sponsorship proposal you should include when calculating sponsorship value.

1 – Sponsorship Opportunity

2 – Marketing Objectives

3 – Measures of Success

4 – Value to the Sponsor

5 – Unique Marketing Initiatives

6 – Terms and Conditions

7 – Call to Action

Show the value of your event to the sponsors, and build credibility with them so they trust your future event organisation endeavours.

 

Create a unique offer and experience for your sponsorship

 

The target audience is one of the most important criteria when choosing an object for unique sponsorship offers. Sponsorship offerings should comply with the corporate culture and policy of sponsors and their goals and contribute to their brand awareness and profitability.  In many respects, companies engage in sponsorships based on individual characteristics when deciding where and how much to send in terms of funds (for sports, culture, science, social spheres, support for information projects, etc.). A great deal of success depends on how well a company manages to guess the mood of its target audience and choose the right sponsorship niche while also knowing how to measure sponsorship value in the end.

 

Sponsorship value calculation with examples

 

When you’re sponsoring an event, there’s an element of uncertainty when it comes to the return on investment (ROI) calculation. For effective calculation, you will need a sponsorship valuation formula.

On average, if the asset price/value is $12,000, sponsors will be looking to get at least $24,000 minimum from a business just to be happy.

First, you should calculate the cost per attendee. Next, you’ll calculate the cost per attendee of each sponsorship asset. This allows you to compare the prices of sponsorship across events of different sizes. If you’re using a spreadsheet to determine this, simply create a formula to divide the value of the “price” column by the “attendance” column.

Here are some examples of sponsorship valuations:

Tips for calculating

 

  1. Calculate your total audience size.

The first step in the sponsorship pricing model is to calculate your total audience size. You can do this by adding together the following figures:

  • Total social media followers
  • Unique return visitors to your website over a 12-month period (You can get this figure from Google Analytics.)
  • Subscribers (email, podcast, publications, etc.)
  • Registered members
  • Event attendees

Add up all these numbers and divide by three to establish your total audience size. 

 

  • Calculate the price per conversion.

 

Recap the information you’ve gathered. For example:

  • Total audience size = 22,333
  • Customer acquisition cost = $666.67 per customer

 

We need three more figures before we can begin an accurate price calculation:

  • Sponsor conversion rate
  • Activation effort
  • Price per conversion

 

  • Calculate the starting price.

 

To calculate the starting price, you first need to divide your audience into the engagement segments. 

 

  • Prepare your final price.

 

Lastly, once you have the starting price calculated, you’ll be ready to prepare the final price.

 

Conclusion

 

Do you struggle to define the ROI for sponsors who you are asking to invest in you? Now you can have at least a general idea of what to consider as value representation for sponsorship and what to do while setting your fees and measuring ROI from your events to report to sponsors. Use our tips, and feel free to contact us for more in-depth help. Good luck!

 

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