Sponsorship Deals: Picking the Right Partner

FC Barcelona and Nike look like they couldn’t be happier together, having signed a new sponsorship deal reportedly worth £120m p.a. and therefore breaking adidas and Manchester United’s previous £75m p.a. record.FIFA and the IOC may be in slightly rockier relationships. After all, a lot has changed since they reported record revenues of £2.1bn ($5.7bn) in 2014 and c.$850-1,600m from Toyota for eight years on their TOP programme.

Yet in both cases, friends have asked me the same question: “Who is the winner in this sponsorship deal?”

Unlike sport, sponsorship is not a game of Win and Lose. It’s time someone articulated why brands and rightsholders (and my mates!) need not see deal-making as a zero-sum game. So here goes…

Thinking Win/Win underpins any successful partnership. But, in sponsorship rightsholders and brands often enter discussions with a Win/Lose mindset, leading to no deal or a Lose/Lose outcome. It’s time the sponsorship articulated why deal-making need not be seen as a zero-sum game, and how rightsholders and sponsors can create Win/Win partnerships.

“Not a technique; a total philosophy of human interaction” is how Stephen Covey, author of best-seller The 7 Habits of Highly Effective People, defines Win/Win. To Covey, it means that in any deal “all parties feel good about the decision and feel committed to the action plan”. I find it surprising that many rightsholders and sponsors do not think the same way.

Many rightsholders focus on revenue and price rights without understanding their value to would-be sponsors. It’s like a first date spent pitching all the reasons you are a 10/10 without once stopping to ask what your potential partner about their passions.

What happens without win/win thinking?

Many rightsholders are out to maximize the price they get from sponsors at pretty much any cost, even if it means a bad deal for their partner. In a sense, this is not surprising if we consider their profit maximization problem:

Rightsholder Profit = Revenue from Sponsor – Cost of Providing Rights

(Rightsholder ROI = Revenue from Sponsor / Cost of Providing Rights)

Seemingly, the rightsholders’ profit will be maximized by bleeding the sponsor dry while incurring as few costs as possible. This can cause Win/Lose partnerships, as demonstrated when thinking from a sponsor perspective and their profit maximization problem:

Maximum Sponsor Profit = Incremental Value from Sponsorship Cost of Sponsorship

(Sponsor ROI = Incremental Sales from Sponsorship / Cost of Sponsorship)

As shown in our two equations, Revenue from Sponsor = Cost of Sponsorship. Looked at like this, taking the size of the pie as fixed, both parties could be forgiven for seeing any relationship as Win/Lose.

Except that the size of the pie is not fixed. We must recognize that Incremental Sales from Sponsorship are variable. More incremental sales can mean more value to be shared between both parties.

What would you rather have?

Fortunately, not all first dates are one-way pitches, and insightful rightsholders realize deals are not a zero-sum game. Instead, they search out and build Win/Win partnerships.

However, even for those with the right mindset – even for those daters who could be a perfect match – many still struggle to find the right words to make it show. In sponsorship, the debate and media coverage today is focused on revenue and cost. We know FIFA generated £2.1bn in revenue from 2011-14, but we collectively lack the language and metrics to understand how much is created for sponsors. The point here is that the sponsorship industry needs not only to think Win/Win, but also to talk through a Value lens. Put another way, sponsors care about value and ROI. Rightsholders must demonstrate their ability to deliver maximum value and ROI for sponsors.

They can do this by replacing the one-size fits all rights packages and proposals of today with value-based discussions with sponsors. Instead of metrics like # fans, demographic of fans, # followers and broadcast exposure, potential partners could discuss how to maximise value and ROI through the sponsorship Pathways to Value relevant to them. Consequently, the likelihood of creating a Win/Win partnership and sharing a bigger pie would be significantly higher.

If it becomes clear that a partnership is value-creating, as it appears to be for FC Barcelona and Nike, both parties can negotiate a price and go on to live happily ever after. Time will tell if their tale of romance continues. For now, as Stephen Covey suggests with another of his 7 Habits, let’s Put First Things First and start thinking Win/Win.


If you want to chat Win/Win sponsorship deals or anything to do with sponsorship measurement and evaluation please do send me an email at and, if you haven’t already, take a look at how Synergy think about sponsorship value in our white paper here

Rightsholders’ Sponsorship Proposals: Counting What Counts

As everyone who works client-side in sponsorship knows, rightsholders’ sponsorship proposals tend to be very generic; all about the same old rights and outputs, rather than ideas and outcomes. As the saying goes, if you’ve read one, you’re read them all. Wouldn’t it be great if that changed, and focused on the things that matter to brands, especially the metrics?
Since Synergy’s Carsten Thode wrote ‘Rightsholders getting it right’ and the subsequent launch of Synergy Decisions we’ve been looking at potential fresh approaches by rightsholders to their proposals. In this blog, I’m going to highlight the top five most common sponsorship proposal problems and what better proposals could look like.

Think about the last sponsorship proposal you read. Chances are the content looked something like this:

Rightsholder Proposals Today ppt.jpg

While some initial proposals do genuinely address the objectives of a potential sponsors, and 2nd round proposals usually do a far better job of presenting content that matters, many make it a real challenge to extract the content that counts. Having talked to Synergy clients and colleagues, who have collectively reviewed literally thousands of sponsorship proposals, these are the top five problems commonly encountered:

1. Little or no attempt to understand the brand’s key business drivers and challenges
2. One size fits all rights
3. Too long
4. No view on how campaigns could help tell the brand story
5. Focus on outputs rather than  the value-based metrics that matter

Now imagine the dream sponsorship proposal you wish you could read. Chances are the content would look something like this:

Rightsholder Proposals Tomorrow ppt.jpg

Spot the difference?

That’s the change in approach that’s needed and we’re continually talking to rightsholders on new ways of thinking about the following:

•  Approaching sponsorship top-down from the campaign idea, instead of bottom-up from the rights (selling the meal, not the ingredients) and from the brand’s perspective
•  Rights having no intrinsic value (sponsorship value is entirely contextual)
•  Where and how their rightsholders’ offers could help create value for potential sponsors by identifying potentially suitable: a) industry categories; b) brands within those categories; c) key objectives and value drivers which matter most for those brands

Armed with this new way of thinking, rightsholders could go to potential sponsors with a different type of proposal. One which is:

1. based on upfront research by rightsholders about a brand’s key business drivers and challenges
2. tailored to consider the value-drivers of each specific target brand
3. targeted at what matters
4. tells the story of how a sponsorship rightsholder can help the brand tell their story
5. grounded in value-based thinking

If rightsholders adopted this approach brands would be far more inclined to pay attention to their proposals than they are to the generic, one size fits all decks that routinely hit their inbox. If not, a great deal of money and time will continue to be wasted.


If you want to chat about ROI in sponsorship or anything to do with sponsorship measurement and evaluation, please do send me an email at and, if you haven’t already, take a look at how Synergy think about sponsorship value in our white paper here.

Moving Social Media Measurement in Sponsorship from Vanity to Value

Closing the Telegraph’s Business of Sport article on ‘The importance of social media in sport’, Synergy CEO Tim Crow says rightsholders “need to focus less on selling price and impressions and much more on delivering engagement and value”.

He's right – value metrics are the future. And with more words set to be published on twitter in the next 2 years than in all books ever printed, the cost of getting social media measurement wrong – by using vanity metrics such as “likes” and “clicks” – is set to skyrocket. This blog aims to provide a quick guide to moving sponsorship towards better social media measurement.

social media channels

The majority of data points available in off-the-shelf analytics packages are what author of The Lean Startup, Eric Reis, calls Vanity Metrics – they might make you feel good, but don’t offer clear guidance on what actions to take. Put another way, they do not help make decisions on how to drive value. Since around 80% of companies use vanity metrics, it’s clear that sponsorship must move from vanity to value in social media ASAP.

“But how?” I hear you ask.

Social media is very different to other channels in terms of data accuracy, frequency and availability. Platforms such as Facebook, Instagram and Twitter can offer a wealth of data on user actions to the very second at which they took place, and the rise of real-time is set to transform the way we estimate and track value beyond what I can imagine. That means a move to value metrics in social media will have to leverage some of the most advanced measurement tools and techniques out there today.

Future Dashboards

We can understand value creation through Social Media with a simple framework for understanding social media value:

Reach – the number of unique impressions (organic & paid) made on the audience. Put another way, it’s the number of people who actually see an ad pop up in their newsfeed on Facebook or Twitter, or the pinboard of Pinterest users.

Engagement – directly purchasing a promoted product or interacting with and sharing brand content. Fundamentally, it’s the people who “like”, “share”, or “comment” on Facebook, Twitter or Instagram.

Advocacy – sentiment of the users who engage with the ad. In other words, the degree to which they are positive, neutral or negative towards the ad.

Purchase – the number of users who see the ad who, are converted to sale. In simple terms, it’s the people who have, one way or another, seen the ad and parted with their cash because of it.

Sales – Cost = Return on Investment (ROI)

Job done!

Or not, as it turns out. Analytics experts reading the above (I’m sure there are many…) will have noted the “simple” approach above is perhaps a bit too simple. Reach and Engagement are indeed hard to measure. There is, in fact, a relationship between impressions and interactions: the greater the Engagement level, the more users interact, the larger the resulting Reach. Put another way, albeit making an inference about causality, more engagement can drive more impressions – social media users who engage with and share brand ads are growing the number of people ‘impressed’.

Analysis has shown the correlation coefficient between impressions and engaged users to be +0.83

Transitioning to an approach like the one outlined above, and addressing the interaction across stages, would be represent a significant step forward for the sponsorship industry.

Learning from Social Media

While data frequency in more traditional channels such as live-event, TV or Radio broadcast may never reach the levels seen in social media – it does not need to – brands should push for the same level of data accuracy and availability. The key is to transform their respective vanity metrics, like branded mentions and views, into value metrics.

Further lessons lie in the dashboards and user-interfaces used to visualize social media metrics today. In an age of big-data, it is easy to get lost in a sea of information without getting to insight. Social media platforms like Facebook – and behind-the-scenes Facebook Insights – are a step ahead of other sponsorship channels in tracking user data pre-, during- and post-campaign. We must learn from them.

So what next?

With only 1% of companies currently being “socially native” – meaning (among other things) they have measurement to match business objectives – the sponsorship industry has a long way to go. But a journey of a thousand miles begins with a single step. I hope this blog will help the industry take it.


If you need a nudge or some guidance on social media measurement please do send me an email at and, if you haven’t already, take a look at how Synergy think about sponsorship value in our Synergy Decisions white paper here.

Valuing Rugby World Cup 2015 Sponsorship: A 5-Step Guide to Sponsorship Event Measurement

It's not long now until Rugby World Cup 2015 kicks-off and sponsors start to see a significant return on investment...

…at least that's what they hope.

If you already know whether their event sponsorship endeavors will be likened to a World Cup win or group-stage knockout then you can stop reading now. Otherwise, this 5-step guide to sponsorship event measurement should help you understand how to deliver, measure and evaluate a high-ROI event sponsorship of any scale.

RWC Image 2

So, using Rugby World Cup 2015 as a case study, let’s outline an approach which could help…

RWC Partners Image

By the way, this guide brings to bear much of the thinking already shared in the Synergy Decisions white paper.

Step 1: Understand the Pathways to Value

In the context of event sponsorship and Rugby World Cup 2015, this means understanding that the event could deliver value through different Pathways. Brands like Canterbury and Heineken will have similar rights, but will be using them to deliver different objectives. The rights will drive different levels of value accordingly.

That said, let’s consider some of the Pathways through which Heineken could drive value:

  1. B2C Brand Awareness (e.g.pitch-side branding to reach a global audience via extensive TV coverage)
  2. B2B Hospitality (e.g. hosting and building relationships with trade contacts to increase listings in the on and off trade)
  3. Data Capture (e.g. recording fan contact details through at-event activations)
  4. Experiential (e.g. campaigns to connect with fans at the stadium)
  5. Pouring rights (e.g. increased sales at all 48 matches at the expense of competitors such as Guinness)

Heineken Experience

Step 2: Identify the Value Drivers for Each Pathway

This is crucial. Rugby World Cup 2015 sponsors must know which metrics influence how much value is being created within each specific pathway. Sponsors should ask whether their value drivers are, for example:

1 - Talking to business customers – If so, how many do we need in our hospitality suite at each match? Of the business clients who join, what share do we want to be “high” value? Of those who are “high” value, how many do we need to convert into sales?
2 - Data capture – If so, how many details do we need to collect at each match? How many are attending each match? What is the likelihood that a new contact converts to a sale? What is the value of that sale? How quickly do we need to follow up?
3 - Maximizing at-event sales – If so, how many sales do we need to make? Where can we sell at the ground and how many sales staff can we deploy? At what cost?
4 - Etc. … (In the interest of time I’ll refrain from listing the 30+ different Value Drivers we’ve worked on at Synergy over the last year, but you get the idea!)
The earlier brands map out these questions, the easier it’ll be to:

• find where and how value could be created pre-campaign
• change course and track progress during-campaign
• evaluate performance post-campaign

Step 3: Build a Model

Having successfully navigated Step 2, it’s time to enter Excel and use the value drivers to create a model which helps us understand the value created within each Pathway. Let’s say that Heineken, for example, is trying to understand the Data Capture Pathway. The global beer brand’s model could be structured to make calculations using inputs like:

• # matches at which we have experiential rights
• # attendees (by match)
• % attendees engaged in experiential
• % attendees engaged who share data / contact details
• % post-match contacts converted to sale
• £ lifetime value of average contact converted to sale

Step 4: Find the Best Possible Inputs and Assumptions

With a strong Step 1, Step 2 and Step 3 in support, finding and measuring the metrics that matter should feel less like a scrum and more like a kick from under the posts. Whether it be through consumer surveys, brand trackers, data records on the ground, web analytics, or a combination of all of the above, the key to sponsorship measurement is inputs and assumptions you can adjust but believe in.

Dan Carter

With our Heineken / Data Capture example in mind, imagine that they have one pop-up activation per match. Heineken could then track performance through, for example, conducting consumer surveys at each of the 48 Rugby World Cup 2015 matches.

Step 5: Interrogate the Model

Once the detail is done and dusted, better decisions can be made more easily with the help of a user-friendly dashboard, which could look something like:


As any Rugby World Cup-winning team will tell you, most of the hard work is done before the main event. Tough questions are asked, different tactics tested and weights lifted before the Final event itself.

Likewise, sponsorship event measurement must be grounded in strategic analysis ahead of time, and a commitment made to analyse and gather the necessary data to find scenarios, sensitivities and breakeven points. With a clear sense of how to drive maximum value, CMOs and Sponsorship Managers alike can send staff out onto the marketing field-of-play confident their team will perform.


I hope you’ve enjoyed this quick guide on how to take a more structured approach to understanding the value of event sponsorship. If you’d like to talk in more detail feel free to email me at

Sponsorship Valuation: Standing up for the Sponsors  

Sponsorship valuation is driven by rightsholders. The simple fact is that they tend to be the ones paying for the analysis, and whoever pays the piper calls the tune.

It makes complete sense for the rightsholders to be leading this particular charge. They have sponsorship properties to create and sell. They not only need to know where to price them but also need to be able to justify that price during the sales process.

A whole industry has grown around this proposition. In fact, just yesterday ESP Properties, a new “super-agency” born out of IEG, GroupM and Two Circles was formed to focus on exactly this. They will be taking the fight to IMG, CAA, Wasserman, Repucom and the many others who all have their sights trained firmly on this space.

There is no doubt that these are all great agencies doing some pretty sophisticated things to help rightsholders better understand and maximise the amount of money they can command for their sponsorship properties on the open market. Because, at the end of the day, the value of a sponsorship property from the rightsholder’s perspective is the same as the value of a house: it is worth what someone is willing to pay for it…and you only need one party to be willing to pay that. Effectively that means that rightsholder consultants are like estate agents, helping the rightsholders determine the “list price” based on market benchmarks and the property’s features (rights) and helping them find a buyer.

Estate agents boards offer property in Brighton

But in this rush to help the rightsholders monetise their properties, who is helping brands understand the value of their sponsorship, independently and without any conflicts of interest?

This is particularly important, because, as we argued in our Synergy Decisions White Paper, a sponsorship does have a real, economic value to the sponsor: the increase in the company’s value as a result of increased revenue or decrease costs.  But this value is entirely contextual of the sponsor and their activation campaign.

To put it bluntly, the exact same sponsorship property with the same basic rights would have a completely different value to Coca-Cola, McDonald's, P&G, Samsung, Panasonic, Visa, Toyota, Bridgestone, Omega, GE, Dow, Atos.  That’s because each of those companies has different business models, audiences, products, routes-to-market, marketing channels, purchase drivers and competitive environments.

Further, the exact same property would be worth a different amount to the same brand depending on how effectively they activated it. For example, I don’t think it’s too controversial to say that the London Cycle Hire scheme could have been worth far more to Barclays (and no doubt will be worth far more to Santander) had they done more with it.

The challenge for brands is to determine the economic value their sponsorship does or could create. And this requires a completely different approach to the one that rightsholders use – one like Synergy Decisions.

adidas & Manchester United: Will It Be Worth It?

Since Manchester United confirmed the record-breaking £750m adidas kit deal in July, are we really any clearer on whether the 10 year deal is good value for the German sportswear giant?

On the face of it, the wave of commentary post-announcement has given sports fans across the world a comprehensive account of the costs and benefits. If we believe the benefits outweigh the costs – as adidas and many fans do – then the deal would represent value for money. The key considerations look something like this:

• Costs: £750m rights fee over 10 years, products supplied and outfit of all the club’s teams
• Benefits: increased brand awareness, enhanced favourability vs. Nike, direct revenue from shirts and dual branded merchandise

However, something is missing.

Do we know the £ value adidas expect from increased awareness? Do we know the £ value adidas expect from increased shirts sales? Do we know the £ value adidas expect to return to shareholders? Nike decided against extending the contract (2013 value £38m), claiming the terms “did not represent good value for Nike’s shareholders“, so if we really want to understand adidas’ record-breaking deal we need to understand how it’ll make them money. Put another way, we need to understand the pathways through which adidas will generate value and what they are worth.

Pathway #1: Brand awareness

adidas chief executive Herbert Hainer is right when he says “[the deal] will help us to further strengthen our position in key markets around the world“. Manchester United is one of the most popular teams in the world with a claimed global community of 659m followers, and is increasingly prominent in the Far East and US.

So what is this worth?

Outside in, we cannot demonstrate Synergy’s tailored approach to measurement. What we can do, is apply some logic against a hypothetical scenario. So, if we imagine that 2% of United followers are unaware of the adidas brand, adidas is reaching over 13m more people because of the sponsorship. If we assume 20% of those are open to buying United / adidas branded merchandise and that 20% of those actually do, then adidas have 520,000 new customers (13.2m x 20% x 20%). If we assume each of them generates £50 profit for adidas per year, the total 10-year value created is £260m.

Pathway #2: Brand Favourability

Among those already aware of the adidas brand, the deal increases relative conversion rates down the sales funnel. Put another way, some of the 659m United followers will move away from Nike towards their new team sponsor, especially if Manchester United can turn followers into addressable individuals for their sponsors. Doing so would add further weight to the not unrealistic assumption that, given the size of the Manchester United fan base, the deal will give adidas a significant competitive over Nike.

So what is this worth?

As before, with a few inputs and assumptions we can estimate Pathway £ value. From the outside in it’s tough to determine – so we’ll leave this as a thought exercise for now – but some simple logic can go a long way.

Pathway #3: Direct revenue

As part of the agreement, adidas will supply product to Manchester United and outfit all of the club’s teams. In addition, adidas will have the exclusive right to distribute dual-branded merchandising products worldwide.

So what is this worth?

If we take Mr Hainer’s estimates as accurate, we expect “total sales to reach £1.5bn during the duration of our partnership”. Remember, however, that revenue is not the same as value. The value each of the c.1.5m annual shirt sales from 2009/10 – 2013/14, for example, has a profit margin. The higher that margin the more valuable the “direct revenue” pathway to adidas.

Only when we consider the £ value created by all pathways can we truly know whether adidas’ £750m expense will create value for shareholders. Sports fans don’t need a rigorous cost-benefit analysis to debate deal value – most will understand the dent in adidas’ wallet comes with huge potential upside. But for brands and rightsholders worldwide, understanding of £ value created across Pathways to Value should be a pre-requisite to any sponsorship deal.

Only with time and effective measurement will we know whether adidas have created value for their shareholders.