The importance of ROI in sponsorship | beon. Worldwide (2024)

FAQs

Why is ROI important to a sponsor? ›

ROI guides strategic decisions, allowing a brand to evaluate the effectiveness of its investment and make informed decisions about future sponsorship opportunities.

For instance, if you spend $1,500 on a billboard for 30 days and the billboard nets you 500 new leads who end up earning your company $3,000, then your ROI was $1,500. It's easy to quantify your ROI in business, but in sponsorship programs, a lot of my clients struggle.

Sponsorship ROI is often measured by comparing the cost of the sponsorship with the revenue or value generated by it. Sponsorship ROI is usually expressed as a percentage or a ratio.

Corporate sponsors also enjoy benefits such as boosted visibility and increased brand recognition. By aligning themselves with an association, sponsors can reach a targeted and engaged audience, enhance their reputation, and demonstrate their commitment to industry or community causes.

ROI measures the amount of return on an investment related to that investment's costs. It is used as part of analytics and serves as a benchmark for shaping marketing strategies for the future. This enables you to determine what marketing tactics are working and what areas can be improved.

The benefits of calculating ROI include assessing the profitability and efficiency of investments, assisting in decision-making, prioritising resource allocation, identifying areas for improvement, measuring performance, luring investors, and ensuring a strategic approach to maximising returns on investments.

The list of what companies actually want in return for their sponsorship dollars is usually fairly simple: Companies want exposure. They want people to see their generosity in action. Companies want relevant recognition.

Let's look at a basic example to see how it works. Imagine you started a lemonade stand with $100 in supplies and ingredients. Through this investment, you sold 100 glasses of lemonade at $2 each for a revenue of $200 and a profit of $100. When you divide $100 (profit) by $100 (original cost), you get an ROI of 1.

Return on investment (ROI) is an approximate measure of an investment's profitability. ROI is calculated by subtracting the initial cost of the investment from its final value, then dividing this new number by the cost of the investment, and finally, multiplying it by 100.

How do you demonstrate ROI? ›

To do this, you should first estimate the net profit by attributing, measuring incrementality, and estimating lifetime value. Then, you should estimate the cost of your sponsorship by including direct and indirect costs such as the sponsorship fee, production cost, promotion cost, and staff cost.

A well-executed sponsorship strategy contributes to increased brand equity, customer loyalty, and positive word of mouth.

You'll get media attention, funding or help with your event, web traffic, and new leads. In exchange for their expertise, your sponsor company gets to feed off your audience.

One of the most effective ways to drive sponsorship revenue is to increase the value that you're providing to exhibitors. To do so, it's crucial to understand why they are exhibiting at your event in the first place. All too often, we assume the goals are to showcase their products and gain further leads.

A corporate sponsor is a business that gives either financial resources or tangible items for the specific purpose of underwriting the cost of an event. In most cases, corporate sponsors expect some form of recognition in return for their donations.

A high ROI means your campaigns are making more money than you spend on them, which is exactly what you want. Nobody likes wasted budget, especially when purse strings are getting tighter. Calculating your marketing ROI enables you to see which activities have the most impact.

ROI is far more than a single measure or number. Instead, ROI allows program staff to gather and analyze a wide range of important data. In addition to assessing a program's impact, an ROI analysis can reveal those factors which inhibit or promote success.

Return on investment (ROI) is a ratio that measures the profitability of an investment by comparing the gain or loss to its cost. It helps assess the potential return of investments on things like stocks or business ventures. ROI is usually presented as a percentage and can be calculated using a specific formula.