What is SPONTECH and how will it impact you?
$147B will be spent by brands on sports sponsorship and activation in 2018.
The sponsorship industry has been growing at the rate of 4% — 5% every year for the past 5 years and 70% of the total sponsorship spend by brands in 2018 is expected to be made in sports. With the sports sponsorship industry poised to grow exponentially each year, measuring a brand’s return on investment (ROI) or return on objectives (ROO) has become paramount today.
At SportsProLive 2018, Hookit CEO Scott Tilton talked about the impact of spontech — the revolutionary sponsorship technology that is creating a major impact on the sponsorship industry.
Sponsorship measurement today
Historically, measuring and quantifying the value generated from sponsorships has always been a challenge. Today, although sponsorships are being measured, only the ROI from traditional forms of media such as television or on-site ROI are being measured. However, with the bigger and wider influence of social and digital media on sports, this kind of measurement only provides a fraction of the total impact of sponsorship investments and has made proving sponsorship value challenging.
Also, the need for sponsors to prove their ROI is increasing with 80% of sponsors reporting a need to validate their sponsorship ROI. Despite this, 65% of sponsors don’t measure their sponsorship effectiveness at all and 31% of sponsors had no allocated budget to measure their sponsorship ROI. By not making an investment to measure their ROI, it will be difficult for sponsors to quantify the value generated by their properties or to adjust their sponsorship spend.
Spontech — Sponsorship Technology
Spontech is the convergence of sponsorship and technology that can help maximize sponsorship investments across the entire sports ecosystem with the help of cutting edge technologies such as machine learning, image recognition, and data driven insights.
Marketers are using technologies such as Adtech and Martech to not just prove their ROI but to improve and influence their spending decisions. However, the sponsorship market has many different players with varied technologies who only measure parts of a sponsorship, but a single technology or tool to actively track the lifecycle of sponsorship was not available until now.
Hookit, a pioneer in spontech, can measure the total impact of a sponsorship — from traditional, social, and digital media as well as value generated by influencers, fans, and the larger social ecosystem.
With the help of technology backed measurement, sponsorship decisions can be made with a high degree of precision. A sponsor can then take actions such as identifying the best athletes/events to sponsor, adjusting campaigns that drive higher ROI/ROO based on real time data and structure sponsorships that reward performance of sponsored properties that align with the sponsor’s goals.
The impact of spontech: Top 5 ways it will influence sponsorships
1. Evolution of data
Big Data — the term used to denote large amounts of structured and unstructured data is changing the way businesses are run today. Structured data has been used to drive decisions for a long time, but this kind of data was limited, relatively static and not updated frequently. But now, along with structured data there is a large amount of unstructured, qualitative data such as text, images, conversations on social media, etc. Unstructured data is updated frequently, sometimes in real time, is free-form and generated from multiple sources. This data is also rich in audience insights and sentiment which brands and sponsors can use to gauge the impact of their sponsorship efforts.
However, to extract the essential insights from big data, technologies such as artificial intelligence, and machine learning are necessary. Hookit is the market leader in unstructured data measurement, particularly from social and digital media. Using its advanced Hookit Valuation Model(HVM), a sponsor can learn the aggregate earned media value a sponsored property generated for them. This media value earned by the sponsor from social media will be a comprehensive value calculated from not just images or logos but from the total interactions on social media.
2. Evolution of sponsorship measurement
Historically and even now, the effect of sponsorship investments are measured retrospectively. This descriptive analysis has helped sponsors measure the impact and ROI of their sponsorship investments after the event has occurred. But now, with real time data measurement available, historical and real time data can be combined to provide insights into sponsorship investments.
With the availability of advanced machine learning technologies for analysis, the analytics of the future will be predictive and prescriptive. Sponsors will migrate to more proactive approaches such as predictive analysis (what is likely to happen and how a sponsor can use that to their advantage) and then to prescriptive analysis (what action can be taken to identify where opportunities lie and avoid potential pitfalls).
In short, sponsors will use advanced platforms like Hookit to help convert the data available to them into actionable insights, thereby making progressive and innovative sponsorship decisions and understand which properties they should sponsor to better achieve their sponsorship goals.
3. Evolution of Privacy
With the recent issues around how data from social media platforms are being accessed, responsible and ethical use of data is now crucial. Instagram recently announced changes in its API and placed checks and balances on the data that is shared with third parties. Similarly, other social platforms and data sources will work on developing and cultivating responsible use of personal data. Sponsors can still use data insights from social platforms to drive their sponsorship decisions by affiliating with trusted third-party platforms such as Hookit who follow best data practices. Read more about the data privacy situation here.
4. Evolution of sponsorship metrics
Social media is top of mind for most sponsors today and 98% of sponsors use social media platforms to activate their sponsorships. Also, the presence on a social or digital platform was the second most important benefit for a sponsor behind category exclusivity. Social media analytics are considered a valuable metric for sponsors and with billions of interactions on social platforms every minute, it becomes important to not just measure the impact of social media on sponsorships but to do it in real time.
Hookit’s live dashboards update social media stats every couple of minutes, which help sponsors to monitor and take decisions about their sponsored properties in real time. These real time data driven decisions enable sponsors to stay ahead of their competition and also help tweak sponsorship campaigns and sponsored athlete interactions during an event to drive maximum sponsorship value.
5. Rise of performance-based sponsorships
The eventual climax of the impact of spontech? Sponsors and brands will structure their sponsorships based on the performance of the sponsored property and how well it aligns with the sponsor’s objectives, all using data-driven metrics to track and report.
Recently Anheuser Busch, the second largest sponsorship spender in the US announced its decision to move towards sponsorships that reward performance based on metrics important to them. With changes in the way audiences consume sports, it has become important to measure the impact of a sponsorship across various channels and reward properties that put in more effort to drive higher value for a sponsor. Hookit already tracks the entire sports ecosystem and is helping sponsors identify which of their athletes/teams are overvalued or undervalued and which properties may help a sponsor maximize their sponsorship ROI.
Data backed by technology
Today, huge amounts of data are available, but that data by itself has no value without any applied technology or a trusted platform to process the data appropriately. Spontech platforms like Hookit provide actionable insights specifically geared towards the sports sponsorship industry. With the advent of performance-based sponsorships, rights holders and brands will look to spontech platforms to prove the value of their sponsorships.
Are you ready to put data insights and technology as the backbone of your sponsorship decisions? Learn more about the impact of spontech HERE.
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