Why sponsorship needs an effectiveness revolution

When Lidl made the eye-catching leap into top-tier sports sponsorship last year, becoming an official partner of UEFA Euro 2024, it was transformative for the brand. The retailer increased salience with hundreds of millions of football fans across 31 European markets, smashing its target of 1 million new app users and securing the highest recognition of all the tournament’s sponsors, according to YouGov.

Most marketers could probably reel off a handful of sponsorship deals that have stuck in the consumer consciousness over the years, but the truth is that very few could match Lidl by presenting hard evidence of their success. That’s because brands, agencies and rights holders often overlook the need to prove sponsorship’s effectiveness, seeing reach for the brand as an end in itself. And that leaves it saddled with outdated associations – as the ‘Chairman’s whim’, where the principal ROI is corporate hospitality at the Open every year.

Sponsorship is one of the fastest-growing areas of marketing – especially since live sport is now one of a handful of media moments where we can still guarantee lots of eyeballs looking at the same thing, at the same time. Across Europe, spending on sport sponsorship grew by 6.6% to €32.91bn (£26.34bn) in 2024, according to Nielsen Sports, marking three consecutive years of growth since the Covid-19 pandemic. This means sponsorship needs better answers to questions about its effectiveness to convince CFOs and media planners of its role in creating growth. Yet it lags far behind advertising when it comes to a thorough understanding of its effects.

While advertising has built a robust evidence base over the last decade – through bodies such as WARC and the IPA Effectiveness Databank – sponsorship remains a blind spot. When the pioneering work of Les Binet and Peter Field mentions ‘sponsorship’, it refers to TV sponsorship. Very little research has been done into some of the unique aspects of sponsorship more widely: it is not a channel so much as a platform that enables multichannel activation; there are two brands at play, not one.

Meanwhile in the sponsorship sector, there are no shared standards, few rigorous case studies, and too much reliance on vanity metrics such as social media sentiment and engagement.

The upshot is that media agencies are disincentivised to take sponsorship seriously because it’s seen as a ‘soft’ channel; one which delivers reach but whose commercial effects are unquantifiable.

In short, the industry needs an effectiveness revolution

Econometrics: Sponsorship’s holy grail

One of the key barriers is the complexity of measuring sponsorship within econometric models.

Whereas TV, radio, print or digital media buys can provide relatively reliable reach and frequency figures, sponsorship is trickier to measure. Logos are on screen for milliseconds at a time and are then reproduced in editorial photography the next day. Experiential activations at events might be captured and shared on social by fans at the ground. The brand itself will often support the sponsorship with a multichannel media campaign.

Gathering all that data together can be onerous, with a low perceived cost-benefit ratio. But advances in AI are making it faster and more cost-efficient. At Sid Lee Sport, we’ve partnered with sports data consultancy GSIQ to incorporate sponsorship exposure data into the econometric platform of our sister media agency Kepler. Our pilot project is underway, with encouraging results showing we can isolate the impact of sponsorship in achieving business objectives.

Sponsorship needs better answers to questions about its effectiveness to convince CFOs and media planners of its role in creating growth.

We know, anecdotally, that we aren’t the first to do this. But this points to the other key barrier that particularly impacts the world of sport: a culture of guarded secrecy.

The body of research in advertising effectiveness has been built on a culture of distributing easy-to-access research, leading to some broadly accepted key principles. The sponsorship sector (and particularly sport) has no such evidence base, with deals and results kept tightly under wraps. This prevents a culture of knowledge-sharing about what works and what doesn’t.

As a result, most rights holders continue to articulate the value of sponsorship in terms of advertising value equivalent (AVE) and social reach. That’s not good enough to make a persuasive business case – and, worse still, it underplays the value sponsorship delivers.

The need for the Sponsorship Effectiveness Forum

That’s what the Sponsorship Effectiveness Forum (SEF) is aiming to change. It’s an independent cross-sector group that I’ve launched alongside Charlie Dundas of GSIQ, Sarah Kendall from The Football Association and Rebecca Martin, director at Barclays and the European Sponsorship Association. Our vision is to do for sponsorship what the likes of the IPA and WARC have done for advertising: establish agreed standards for measurement and recognised benchmarks for success.

We want to build an evidence base of case studies grounded in similarly rigorous data. Ultimately, we intend to showcase the best of these examples in an awards programme that equals the IPA Effectiveness Awards and the Effies for its level of analysis.

The implications are profound – for brands, agencies and rights holders alike. Fully demonstrating the results already being achieved today means we can calculate more accurate valuations for sponsorship assets. And that has further knock-on effects for the industry. It enables cast-iron justification for the significant investment involved in sponsoring mass-reach properties, and helps communicate the untapped opportunities among a whole raft of smaller ones.

It also makes the case for investment in creative output that goes way beyond the bland ‘category wallpaper’ that plagues sponsorship activation campaigns – boring, stale content that we at Sid Lee Sport call ‘sponsorship tumbleweed’.

Pushing for better measurement

We don’t expect this to be the work of a moment. The launch of the Sponsorship Effectiveness Forum opens the door for future collaboration, benchmarking and debate. But, crucially, that debate will be informed by hard data. Ultimately, it will give marketers the tools to demand better measurement frameworks, push rights holders for transparency and treat sponsorship as a serious growth driver.

In turn, this should put sponsorship more firmly on the map when it comes to hard-headed commercial decisions. It will give media agencies stronger incentives to push sponsorship as a growth-driving channel on a par with advertising. And it will give CMOs – and CFOs – the confidence to invest in properties that will define their brand’s cultural resonance and profitability for years to come.

The outcomes Lidl achieved at Euro 2024 were not just isolated to that event. After the final whistle blew to mark Spain’s victory over England in Berlin, Lidl had a business case for continued investment in European football. That meant the brand was also there in front of a record 12 million British TV viewers when England’s Lionesses retained the UEFA Women’s Euro championship this summer – as well as sponsoring the men’s Europa League and Conference League for the past two seasons.

So, what’s stopping other brands from following Lidl’s lead? With the advent of the Sponsorship Effectiveness Forum, not as much as you might expect.

Our initial research shows that sponsorship activations that start with a business objective are significantly more effective than those without. Sponsors need to measure uplifts in revenue, profit and market share, and rights holders need a greater understanding of how to deliver that. The whole category deserves the evidence to demonstrate the commercial growth that sponsorship can deliver.

That requires a change in attitude from all involved, moving from competitive secrecy to collaborative knowledge-sharing. Far from giving away the family jewels, this will enable the industry to correct the historic undervaluation of sponsorship. And as a result, we can realise the opportunity to elevate sponsorship to the heart of the marketing mix.

Rory Natkiel is chief strategy officer at Sid Lee Sport.