Navigate Research

Industry Insights

As the industry leader in evaluating and measuring marketing investments, Navigate has a wealth of knowledge in the sponsorship and marketing space. This blog shares our knowledge and insights on current events in the sports business, marketing and sponsorship worlds.

The Research Edge: Naming Rights & Music

Navigate Research - Wednesday, February 15, 2017
Introducing "The Research Edge: Naming Rights & Music” – the first in a series of one-page white papers Navigate will be releasing throughout the year to share industry trends and recommendations based on our research. 


Adding Efficiency to the Sponsorship Marketplace

Navigate Research - Wednesday, September 09, 2015

Written by Matt Balvanz

When buying and selling real estate, stock in a company, or automobiles, information is everywhere. Each of those industries involve transparent transactions where both parties can analyze exactly what is being sold in the marketplace and at what price. This allows for easy comparisons and relatively straightforward cost-benefit decisions. Buying and selling sponsorships tends to be a bit more challenging.

The costs and benefits of these transactions are typically not made public, aside from larger multi-year sponsorships, which are often misreported. This lack of information forces the market to make a lot of assumptions – or flat-out guesses – when it comes to which benefits to include in certain deals, and what price should be paid. It also makes comparisons challenge. If a buyer is looking at similar sponsorships with two teams in different markets (or even different sports), it’s often difficult to know which is priced more fairly.

To address this issue, Navigate has teamed up with the University of Iowa’s Sport and Recreation Management Program to create the first real attempt to estimate the fair market value of sponsorships across all major US sports leagues to provide both buyers and sellers with an independently produced pricing guide. We call this guide the Sponsorship Value Index (SVI). The SVI places a fair market value on the same bundle of sponsorship elements across every professional sports team. Those elements include:

  • Two (2) minutes of Digital Signage per game for a full season
  • One (1) Experiential Space per game for a full season
  • One (1) Giveaway per season
  • One (1) Video Board Promotion per game for a full season
  • One (1) Website Banner Ad for a full season
  • One (1) Print Program Ad per game for a full season
  • Two (2) Radio Ads per game for a full season
  • Two (2) TV Ads per game for a full season
  • One (1) Static Sign per game for a full season

The goal with selecting these elements for the SVI is to create a diversified mix of sponsorship elements that are consistently provided by professional sports teams. Having these fair market values at the team level allows for several helpful comparisons for sponsorship buyers and sellers that have been impossible until now. For example, here are the results for the Top 5 NFL teams, ranked by Index, if we include all of the elements above. Keep in mind, this mix includes two (2) TV ads per game for a full season, which currently isn’t offered by NFL clubs.

Chicago Bears

100

Dallas Cowboys

93

New York Giants

90

New York Jets

83

San Francisco 49ers

77

We’ve disguised the actual fair market values in this example, but the Index results show that the Chicago Bears have the highest SVI for the given sponsorship elements above, and the Dallas Cowboys have a SVI that is 93% of the Bears, with the New York Giants coming in third at 90%, and so on. This breakout shows the potential value of a team like the Chicago Bears, if local TV advertising would be made available during NFL broadcasts.

If, however, we remove the TV element from the SVI to be more reflective of actual NFL sponsorship packages, the new Top 5 NFL teams, ranked by Index, looks very different.

Dallas Cowboys

100

Chicago Bears

77

Green Bay Packers

75

Philadelphia Eagles

68

New England Patriots

67

Based on these Index values, the Dallas Cowboys have the highest SVI in the NFL, with the Chicago Bears in second at 77% of the value of the Cowboys. In this example, the gap between the first and second highest values is 23 percentage points, which is quite a bit higher than the 7 percentage point gap in the initial breakout above. In addition, teams in smaller markets, such as the Green Bay Packers, Philadelphia Eagles and New England Patriots provide a very high level of sponsor value due to strong local support. This type of flexibility in the analysis allows for easy customized comparisons across all teams and leagues by slightly adjusting the element mix.

One additional example of the flexibility of the SVI is to adjust the figures to reflect only sponsorship elements that can be viewed within your seat when attending games. These assets include Digital Signage, Static Signage and Video Board Promotions. The adjusted Index values below reveal a new Top 5 for the NFL.

Dallas Cowboys

100

New York Giants

89

Washington Redskins

83

New York Jets

82

New England Patriots

79

You’ll see that the Chicago Bears are no longer listed in this mix, but the Washington Redskins move into the Top 5 due to their strong in-stadium support and the premium value placed on the fans within the attractive Washington DC demographic area.

What are ways that a buyer can use this information?

For a quick example, let’s assume that a brand was given a $500,000 proposal from the Dallas Cowboys to be a sponsor, and the elements offered in their package aligned pretty well with the SVI when removing the TV elements (second example above). This analysis would predict that the same sponsorship with the Chicago Bears would cost $385,000 (77% of the Cowboys). If the brand believes that their money is better spent on a sponsorship in the Chicago market than the Dallas market, they will have a solid estimate of what they should be paying, and may want to reach out to the Bears to see if the inventory is available there. This insight, along with element specific breakouts and the same information for every team in every market, will give brands unprecedented fair market value insights to quickly and accurately compare their sponsorship options.

How can this information help a team?

Again, let’s assume a hypothetical example where the New England Patriots are trying to sell a $300,000 sponsorship to a brand that is trying to decide whether to do a similar sponsorship with the Green Bay Packers instead. The Patriots could use the SVI in the second example above to explain that the Bears deal would likely cost the brand $338,000, or an incremental $38,000 per year. The Patriots could also use the full SVI database to compare the fair market values of specific elements, or even compare similar packages across other teams in the New England market that the brand may be considering, such as the Boston Celtics or the Boston Bruins.

Of course, a large caveat here is that sports sponsorships are not yet purchased and sold in an efficient marketplace, and the supply is not aligned with the demand, so the information concluded from analyzing our SVI database will not always be directly actionable. But, the results and the process should add clarity and direction to a marketplace that has proven to be extremely difficult on both sides.

For more information about Navigate’s Sponsorship Valuation Index, please contact Navigate Research by calling 312-762-7474, or via e-mail at info@navigateresearch.com

Ad Overkill: Is Too Much...Too Much?

Navigate Research - Wednesday, August 12, 2015

AdWeek recently released "3 Ad Campaigns That Got So Big, They Annoyed the Hell Out of Consumers.” Journalist Marty Swant picked a bone with the advertising industry in asking “how much is too much?” The goal of advertising is to create awareness and draw attention to a certain product, service or event. But what happens when consumers start to resent a brand or product due to ad overkill? AdWeek ranked the top three ad campaigns that beat the dead promo horse:

      1. Minions

The minions took over more than the box office. AdWeek exposed their dominance over “your bananas. Your deliveries. Your burgers. Your very breath.” The backlash ensued on many social media platforms including Twitter. 


2. Anchorman 2: The Legend Continues

Leading up to the premiere of the movie, Ron Burgundy didn’t seem to stay too classy when it came to ad overload. From overpitched Dodge commercials to Scotchy Scotch Scotch Ben & Jerry’s ice cream, Burgundy seemed to be everywhere. Jonny Rose, head of content for the London-based content strategy agency Idio said, “the campaign was initially effective, and then veered toward being too saturated. [It] seemed to overcompensate for the actual film, which didn't win over as many fans as the first” (Adweek).

3. Game of War 

If you don’t recall, Game of War is the mobile game that somehow mustered supermodel Kate Upton as the eye-catching face of the ad campaign. It’s hard believe that the idolized supermodel would turn superfluous, but Game of War ads on Youtube, TV and Snapchat seemed to get a bit stale to users after a while. 

Image from dorkly.com

Rose says that “campaigns need to be looking not just at how creative they can be, but also at the data before, after and especially during a campaign to see which strategies are bothering an audience and which are well received” (AdWeek).

However, is there really such thing as bad publicity? According to PR News, negativity captures users' attention over 30% better than positive messages. The Game of War app is now one of the top-grossing mobile games in the world and the Minion takeover has assembled a 32 million Facebook following as well as a close to first opening-weekend box office record. So maybe the remarkably overdone ad campaigns are effective marketing strategies. After all, in the words of the lyrical Oscar Wilde, “the only thing worse than being talked about is not being talked about.” 


Image from PRNewser.com

University Business – “The Tempo of Change”

Navigate Research - Wednesday, August 05, 2015

Written by Jackie Schetter

Last week was the annual meeting for NACUBO, the National Association for College and University Business Officers.  “The Tempo of Change” was a very fitting title considering the number of challenges and changes on the horizon within higher education.  The keynote and opening speaker was Dan Heath, author of ‘Made to Stick’ and Senior Fellow at Duke University’s Case Center. 

Heath addressed the theme of change by acknowledging how change can be difficult to handle on a university campus.  Universities have been responsible for revolutionary innovations such as the polio vaccine, seat belts, rocket fuel, and pace makers. Yet, when it comes to making business decisions or institutional changes, the status quo remains in the comfort zone. 

Heath’s advised to broach change by breaking it up into three manageable steps: 

1) Identifying a problem and a plan of action to address it

This is actually the easiest step.  Administrators are fully capable of creating dynamic, well-thought out and well-presented plans.  For example, the University determined the need to reduce energy expenditures and identified a variety of cost-cutting alternatives.  Many schools may do this every day and no one knows about it. 

 2) Finding an emotional connection between the problem and the solution

This is the missing link.  The emotional response is what creates the motivation that will be the difference maker in pushing a plan into action.  At the University of California, Berkeley, the schools energy problem was met with a solution that had an emotional motivator.  Cal partnered with a solar energy company that made a long term commitment to help identify opportunities for change, while also donating hundreds of thousands of dollars to the University. The donations went toward enhancing the student experience through educational programming and scholarship opportunities, prompting the University to invest in solar. Something that may have taken years to pull the trigger on is now in put into action.

3) Providing a clear path to success

Health’s final step was to provide a clear path to success after the decision is made to move forward with change.  Other NACUBO topics from a variety of industry experts included the concept of creating a $10,000 degree option, in order to keep up with the changing climate and availability of alternative forms of higher education.  Additionally, outsourcing services that are not a proficiency of the University or part of its core mission are good approaches, such as maintenance, landscaping, and food service.

Overall it was an informative and interesting week. There were many opportunities to share insights with several expert administrators who unanimously agreed on one thing: change is needed. And if you are not ahead, you are behind.