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You’re Thinking About the ROI of Sponsorships All Wrong. Here’s the Reality.

Vin Gaeta

VP of Marketing, 5+ Years of Development Experience, 12+ Years of Project Management Expertise

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You’re Thinking About the ROI of Sponsorships All Wrong. Here’s the Reality. Blog Feature

Published on September 24th, 2018

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Sponsorships can be an extremely beneficial initiative for your company, but let’s face it, it’s a scary thing.

Whether you’re sponsoring an event, webinar, podcast, content, or something else - there’s an element of unknown when it comes to the return on investment (ROI).

And that’s usually enough to stop people from jumping into them.  

However, if you keep a few things in mind, and set yourself up properly, sponsorships could potentially be one of the best things you do in the next year.

There are numerous misconceptions about the ROI of sponsorships, and I’m going to break those down for you.

Before we do that, though, I want to share some of my and our organization’s first-hand experience with return on investment from various sponsorships.

Our Experience with Sponsorship ROI

For the last 3 years, IMPACT has been an INBOUND sponsor. If you’re not familiar with INBOUND, it’s the annual conference held by HubSpot in Boston (and it’s awesome!).

But I’m not going to lie, for me, the first year was a bit scary.

We made a big investment to be there, both in actual booth cost and in “man-power” to staff the booth.

inbound-booth-2016Me at our INBOUND 2016 Booth

Going into the sponsorship, we had high hopes of generating a ton of leads and knew our booth had to be unique.  (You can check out some details on that in my previous article.)

The plan was to walk away from INBOUND with at least 200 leads and close a solid chunk of those within a week of the event.

That first year we actually walked away with closer to 150 leads (still not bad), but closing the business was a much longer process.

Some deals closed more immediately and others, more long-term. For instance, one of the unexpected returns led to a lead getting in touch with us a year after seeing us at INBOUND.

A YEAR!!! That’s nuts!

Ultimately, we were able to attribute enough revenue from the event over the long-term to conclude it was a success, but it definitely wasn’t the immediate increase to our bottom line we had hoped for.

That’s a potential reality of sponsorships - the real value may not be felt right away.

Which is why it’s important to create a unique offer and experience for your sponsorship.

By utilizing the Website Throwdown at our booth over the last few years, it’s created some buzz and helped to draw more folks to us - just because they’re curious as to what’s going on.

inbound-booth-2017IMPACT Customer Success Managers, Nick, Marc, and Melanie at Our INBOUND 2018 Booth

And it’s something that obviously sticks because that lead remembered us.

That being said, let’s dig into what a “typical” ROI looks like and then what your return could really look like.

 

What You Think Sponsorship ROI Should Look Like  

First - there’s no such thing as a “typical” ROI. Let’s get that out of the way ;)

There is what companies expect to see,  which is more often than not monetary value based on how much they spent initially.

If someone is going to be spending thousands of dollars to get in front of your audience, they absolutely are expecting business from it. It’d be silly to think otherwise.

So, what type of return is expected cash-wise?

According to Eventbrite, many brands want to see a “2:1, 3:1 or even 4:1” return on their event sponsorship investment.

That means, if you’re an even host, you really have to have a great experience and drive traffic to them.

If the booth price/value is $12,000, sponsors will be looking to generate $24,000 minimum in business just to be happy.

Not even be ecstatic, just content -- and that’s not the business most brands are in, now is it?

There are a bunch of ways to ensure your sponsorship is successful, and I’ll give you some tips at the end of this article, but the big one that worked extremely well for us - was to do something different.

If you’re just standing at your booth waiting to do demos or get business cards for a raffle, you may have a hard time generating ROI.

Think of something exciting and unique that you can do to draw a crowd - that makes more attendees feel like they need to be at your booth over others.

It’s also important to keep in mind that ROI may not be the same for all types of sponsorships. If you’re sponsoring a podcast or article, traffic and awareness may be more important to you than the immediate monetary return.

With all of that in your head, I want to dig into what other ways you can see ROI that have nothing to do with money. We’ve seen these ourselves after sponsoring INBOUND.

What Sponsorship ROI Really Looks Like

For me, sponsorship ROI can be broken down into 3 main buckets.

Brand uplift or awareness, lead generation, and sales (obviously).

1. Brand Uplift and Awareness

Brand awareness is how many people are aware of your company or logo; Making sure you’re improving awareness, and how people view your brand can be great, and ultimately draw in leads.

When you choose the right sponsor, with a large platform and a relevant audience, you have the opportunity to spread awareness of your brand to all those individuals.

Not only is it good exposure, but you’re also associated with a large platform that is already respected and known. This speaks well for your credibility. 

Even if you don’t have conversations at or directly following your sponsorship, many people will recognize your brand from the event or tradeshow floor.

Think about that lead I mentioned that popped up a year after seeing us at INBOUND. They didn’t convert or even visit back then; they just saw the logo in Club INBOUND.

That’s pretty crazy!

You can also get increased brand awareness and brand uplift out of a media sponsorship, such as a podcast - as your name is getting featured to a ton of listeners whom may or may not be able to immediately go to your website to convert.

2. Lead Generation

Sponsoring an event, or anything really is a great way to not only increase your brand awareness but get some new leads in your funnel that may not have otherwise found you.

The leads you can get, if you’ve selected the right type of sponsor partner will likely be high quality, extremely relevant, and hopefully ready to buy.

For us at IMPACT, the bulk of the leads we talk to on the floor of Club INBOUND are some of the more qualified leads we talk to.

There are definitely others that are just learning about us, but many people have real pain they need to solve for.

Tom DiScipio, IMPACT’s CRO and Partner, said, “We’ve found that a vast majority of people that make the substantial financial and time commitment to be at an event like INBOUND (or any event for that matter) are typically more committed to learning, and therefore are more educated - and more educated buyers are more qualified buyers, regardless of where they are in their buying journey.”

Those are pretty high remarks about the value of our sponsorship, and that’s partly due to how amazing the team for INBOUND is.

They help make sure that our booth is set up for success, and that we’re positioned in the best light possible - shout out to Doug Stone!

Pro tip: If you’re sponsoring a podcast, article, or webinar, providing the company with a tracking URL and special discount code will help entice users to convert - and give you something to track in regards to ROI. If you’re attending an event, having an event specific landing page for them to fill out works in the same way.

There are also other types of leads that most companies don’t even think about:

Potential Team Members

Many audiences have folks that are looking for their next career opportunity, and by sponsoring and getting your brand out there, you could potentially find your next rockstar employee.

Partnerships

Another lead type rarely considered are the draws for potential business partnerships. When you’re a sponsor, you meet and speak to a lot of people who could open other doors for your organization.

Perhaps you’ll find someone who wants to co-brand some content or even team up on referrals, advocacy, or a partner program. There are so many opportunities.

Co-Marketing

Finding the right co-marketing relationship isn’t an easy task, but we usually get at least 5-10 co-marketing requests while on the floor of INBOUND and has definitely helped us start some new friendships.

If you consider all of those types of leads, the ways you could actually generate ROI are pretty vast!

3. Sales

As great as the other benefits are, at the end of the day, you want to see monetary return on your sponsorship. That’s a given.

But the one thing to always keep in mind is the revenue you can actually realize is ultimately up to your sales team.

The responsibility of the event, podcast, or media you sponsor is to simply serve you up the most relevant, quality leads they can for your investment.

Your team needs to be prepped to actually close them.

It’s a great idea for all of your sales folks to understand the “thing” you’re sponsoring, so they can have contextual information to use during their conversations.

If it was an event like INBOUND, find out what their favorite session was. Podcast? Ask them how long they’ve been a subscriber and why they listen.

When they can contextually talk to the leads that come through, it makes the lead understand that you care - and can strengthen the relationship that will ultimately lead to the sale.

And your ROI ;)

How to Track Your Sponsorship ROI Easily

Understanding exactly what you expect to get out of a sponsorship initiative is critical, and that also sounds like common sense.

But common sense isn’t always common.

This is where understanding your sales funnel and acquisition process is especially important.

Now, brace yourself.  I’m going to go through some simple math coming up - and don’t roll your eyes, I know you just did.

Stay with me, I promise it’ll be worth it.

If each customer spends $100 with you, and the sponsorship costs $1,000, you know you need 10 sales to break even. Assuming you close leads at a 50% rate, that means 20 leads from your sponsorship.

So, to get your 2x minimum ROI, you’ll look to generate 40 leads from the sponsor initiative to close 20 customers and generate $2,000.

Simple.

Now you know what the goal should be, and you can work with who is managing your sponsorship to ensure you get that return on investment.  From there, to better track your efforts, make sure you have ways to actually log your leads from the sponsorship.

Optimized landing pages are great ways to gather leads at a booth, versus grabbing business cards. If the event offers RFID scanning or badge scanning and lead retrieval, such as atEvent, your life will be even easier since you can scan the lead in seconds - with little to no effort.

As mentioned above, for non-traditional sponsorships such as podcasts or webinars, providing a tracking URL, custom promo code, and dedicated landing page will help ensure you capture all of the great leads you’re getting in front of.

Tips for Generating Sponsorship ROI

There are a few things that we’ve seen to be successful to help get that ROI you’re looking for.

Having a “no-brainer” offer that will make leads immediately want to sign up is extremely important. Obviously, this shouldn’t break the bank or your budget, but a solid discount or special package can seriously boost your sign-ups and ROI.

After all, while the brand you’re sponsoring is going to get the leads in front of you - it’s still your job to convert them.

Another great way to generate the ROI you’re looking for is to make the offer time sensitive. Have the offer expire by the end of the event you’re at, or by the end of the month if you want to give some buffer.

Media sponsorships are a bit tougher to put time constraints on, as users may find a podcast or article weeks after it was published - so experiment to see what works best for you!

While it may not immediately generate ROI, gamifying your booth/experience could have a big effect on the return. Neil Patel talks about gamification in his article, as well as other ways to measure event ROI.

Consider partnering with a few other sponsors to start a scavenger hunt, throw a party, or try a photo contest - all with the attendees submitting their information to you (and other sponsors) so you can follow up and nurture them.

If You’re Thinking of Selling Sponsorships ...


1. Understand your sponsors intimately. What is the cost of activating a lead? How much does the product actually cost the user?

This information is so critical for you to track, as you’ll understand how many leads you need to drive to a given sponsor for them to be able to generate the ROI they want.

2. Directly ask your sponsors what the ROI they’re expecting is.

You may be surprised and find they’re simply sponsoring for brand lift and awareness - at that point, ANY leads they generate are “brownie points” for you! More often than not, the sponsor wants to see a 2-4x ROI as I mentioned above.

That means you have clear expectations to work towards and ensure they’ve had a remarkable experience and get the return on investment they want to generate

Conclusion

Sponsorships can be an incredibly valuable tool in your arsenal with the right planning and expectation setting. They definitely take work and a good amount of strategy to stand out from the crowd, but in our experience, it’s been fun and rewarding.

If you have questions on sponsorships, want to brainstorm, or are looking to sponsor IMPACT Live or one of our media offerings - let's chat!

Talk to Vin!
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