Once upon a time, the sports marketing and sponsorship industry was thought to be recession-proof. At the Sponsorship Symposium in New York only a few months ago, industry experts proclaimed calm waters ahead – and some even foresaw growth.

Unfortunately for all, it was the naysayers in the room who were proven correct. Team passions and loyalties may remain strong among fans, but sponsorship spending has been severely hit by the downturn. Well, maybe “hit” isn’t the right word. Try “decimated.”

In recent weeks, the sports industry has seen reversal after reversal of sponsorships. Brands that previously agreed to march forward with sponsorship commitments, renewals or extensions were suddenly re-examining their decisions. Sponsorships that properties and brands both thought would continue well into 2009 were eliminated as budgets fell victim to austerity mandates.

As the tough news of program cuts was made known, marketers found themselves in no position to challenge management with retention arguments, since they lacked prior success metrics. Where was the evidence? Where were the metrics to define and defend the power of sponsorships? This lack of metrics represents the industry’s greatest challenge – and quite possibly our greatest opportunity.

As an industry, sports marketing has enjoyed substantial year after year growth. The onus is now on those in sports marketing to improve the metrics used to measure the impact of sponsorships. It starts with the brands becoming more demanding of their agencies. They need to actively collaborate on enhancing their current processes, setting benchmarks and milestones, and communicating exactly what success looks like. They must emphasize the importance of strengthening the bridge that links strategic business objectives to their sponsorship assets, as well as to their subsequent activation programs.

However, the biggest change agents will be the “trio” – the leagues, teams and properties that interact with brands and agencies on a daily basis.

Most brands active in sponsorship have multiple relationships and interact with numerous partners. They rely on them to provide valuable insight during the review process. If we can agree that brands fluent in sponsorship will streamline partnerships to only those proven to be successful, wouldn’t it behoove the “trio” to recognize they can improve their negotiating positions by going on the offensive? By taking matters into their own hands, the “trio” demonstrate they want to be part of the solution. Let’s face it, closing sponsorship deals is a lengthy process, and each category is not as deep as it once was. Losing a sponsor doesn’t ensure a quick and easy replacement from a competitor. Those days are in the past, at least for now.

For the next 18 to 24 months, there will be great pressure on advertising and marketing budgets. That means the time is now for measurement and accountability. Properties that make this a priority will better insulate themselves against the winds of change. Simply put, if brands don’t measure impact, they won’t be able to justify sponsorship when budgets are being even further scrutinized.

Here are some recommendations to strengthen the case for sports sponsorships:

Know the Business Objectives: Make sure there is sound understanding of a company’s business objectives. Since sponsorship is a big part of the marketing mix, sponsorship assets need to link strategically with overall business objectives. Develop key performance indicators that demonstrate the link between the two.

Involve the Sponsor: Somehow, sponsors have been forgotten in the process. They hire agencies to develop metrics but rarely participate. Their lack of involvement means they don’t engage business colleagues who manage horizontal and ancillary marketing initiatives. Without this input, key measurement metrics are missed.

Identify Measurement Filters: Since sponsorship is more inclusive in the marketing mix and integrated across numerous brand platforms, it is imperative that success criteria are shared throughout the system. As we all know, “if you can’t measure it, you can’t manage it.”

Boost Data Accountability: We all agree there is no “holy grail” when it comes to measurement, but this is where the industry remains asleep at the wheel. Although we’ve made remarkable progress with digital recognition technology, we need to catch up in other areas of accountability. Agency and brand partners must share the job of achieving outcomes and should be equally responsible for delivering information in a timely fashion.

Develop Processes: Accountability is actually a two-part process. Once the responsible party is recognized, it is imperative that they train in the art of data collection. The difference between incomplete analysis and great analysis is this step. We’ve all asked for results at the conclusion of a sponsorship – only to be told the information is unattainable. The counter approach is to identify these parties and teach them to analyze data throughout the sponsorship.

Upgrade the Delivery: It’s time to move past a fragmented approach where objectives and ROI are measured in mostly incomplete detail. Sports marketers need to resolve to make a stronger commitment to metrics that deliver robust, comprehensive analysis in a neatly wrapped package.

Look at it this way: A CFO looking at a brand’s breakdown of revenues and expenses sees sponsorship only as an expense with no direct correlation to revenue generation. It is the responsibility of sports properties to justify those dollars, to provide the metrics necessary to connect sponsorship to revenues. It is critical that we introduce accountability into the system and show sponsorship as an asset, not a liability. Focusing on accountability today opens up a world of sponsorship opportunity for years to come.

-Michael A. Neuman (Founder & President of Amplify Sports and Entertainment, LLC)

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