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Old 26 Feb 2018, 01:21 (Ref:3803930)   #1
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Dessert Valuing Sports Sponsorships

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“Australian firm finds new way to value sports sponsorships”
AFR Monday, 26 February 2018, P39
John Stensholt

Gemba hopes Turnstile will value accurately sports sponsorships

How to correctly value a sponsorship of a sports league or team – or at least do it better – has long been a difficult issue for corporate Australia.

One common way has been tracking television broadcasts and media mentions of brands, a method long used by the marketing industry to measure the effectiveness of of a sponsorship or partnership deal.

But whether more exposure of a company logo splashed across a playing shirt or on a race car and shown numerous times on TV is the best way for a brand to sell more of its products or have a deeper engagement with its existing, lapsed or prospective customers is a vexed question.

It is one that boutique Australian sports consultancy firm Gemba believes it may solve with a new sponsorship valuation platform it has developed called Turnstile, which is already being used by the global owner of motor racing series Formula One, Liberty Media.

Gemba chief executive Rob Mills says his firm has developed Turnstile over two years, and will try to provide buyers and sellers of advertising packages with a holistic approach to valuing sponsorships.

"We wanted to provide a methodology that moves beyond just exposure measurement and seeks to understand the intellectual property value of sponsorship assets," says Mr Mills. "The industry does not need more media equivalencies – it needs a robust approach to pricing usual actual market benchmarks."

The Gemba platform has tried to value sponsorships based on three components: benefits, exposure and intellectual property.

Benefits includes tickets, hospitality, media assets and other inventory provided to sponsors based on market rates, while the exposure component uses Gemba methodology to measure the logo exposure and then output values based on market rates across the sponsorship industry.

In terms of intellectual property, Gemba has developed an algorithm that calculates the fan base that can be reached by a sponsorship property, along with consideration of fan engagement levels and the purchasing power of fans of a particular sport.

Gemba and Formula One management presented a paper at the MIT Sloan sports analytics conference in Boston on the weekend, revealing how the motor sport – which Liberty took over in a $US8.5 billion deal in late 2016 – is using the Turnstile system to measure and value its sponsorships around the world.

Formula One is not without its issues, with the NASDAQ-listed Formula One Group having lost more than 10 per cent of its value in six months, and having been questioned about strategic manoeuvres ranging from a change of its logo to the banning of grid girls at races this year and how it can maintain the large fees it charges of every race organiser around the world.

But the sport believes it can get a better handle on its sponsorship portfolio by working with Gemba and its Turnstile system, which it will need to placate some worried teams on the grid that are receiving slightly less in team payments and will compete for about 5 per cent less prize money in 2018 than last year.

"It's now front and centre in all our sales pitches," the head of global sponsorship & commercial partnerships for Formula One Murray Barnett tells The Australian Financial Review.

"It certainly resonates, especially with brands that were previously sceptical of a relationship with F1. The days of sponsorship being 'the chairman's whim' are long gone and tools that show a meaningful connection to the desired target market are essential. Increasingly brands are looking for real insight into consumer behaviour rather than pure brand visibility, although that remains an important component of the mix."

Mills says the Turnstile system is the culmination of about two years of work by an in-house team at Gemba, which tested its approach on AFL assets in Australia and sports and entertainment contracts in China, where it has established a fledgling business. It also had a staff member working out of the Formula One office in London for five months last year.

The development process included several research studies, including work looking at how consumers recall brand exposure at sports events and how that may impact on their consideration of the brand.

Gemba also studied 20 countries around the world – "we chose the biggest 20 countries that account for about 80 per cent of the world GDP [gross domestic product] as those are the ones global brands generally talk about," says Mills – to develop its intellectual property algorithm, including fan engagement with brands and sports and how that may effect their propensity to purchase goods or products.

Next for the firm, which has a staff of about 40 mostly across Australia and New Zealand, comes pitching the products to the individual Formula One teams, which Mills says he has already begun meeting, and then potentially other sports in Europe.


Story Here

A bit more than just sticking a brand logo on the side of a car...
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Old 26 Feb 2018, 01:34 (Ref:3803933)   #2
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Looks like the days of the "Cochrane rubbery crowd" figure is doomed...
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Old 26 Feb 2018, 01:52 (Ref:3803937)   #3
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Looks like the days of the "Cochrane rubbery crowd" figure is doomed...
just as likely it might show improved numbers
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Old 26 Feb 2018, 02:32 (Ref:3803939)   #4
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Story Here

A bit more than just sticking a brand logo on the side of a car...
Well you wouldn't just pitch the side of a car to a potential sponsor, would you?

You'd attempt to sell the side of the transporter, the team attire, the pit equipment, and the social media real estate too, yes?
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Old 26 Feb 2018, 03:04 (Ref:3803941)   #5
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Well you wouldn't just pitch the side of a car to a potential sponsor, would you?

You'd attempt to sell the side of the transporter, the team attire, the pit equipment, and the social media real estate too, yes?
Having had both solicited and unsolicited requests for sponsorship fly across my desks over many years, truthfully I am not quite sure.

Integration makes perfect sense. Few do it well. Especially with the clutter of competing brands/marketing objectives/spend/leverage/deliverables on a car.
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Old 26 Feb 2018, 04:56 (Ref:3803944)   #6
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Mitre 10 was one of the best back in the day. I've always maintained that Mark Larkham was a man ahead of his time.
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Old 26 Feb 2018, 05:43 (Ref:3803949)   #7
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Integration makes perfect sense. Few do it well. Especially with the clutter of competing brands/marketing objectives/spend/leverage/deliverables on a car.
Supercheap now are arguably the benchmark, using the same B2B model that Kmart racing used to get all their suppliers involved, and constantly promoting the race team in-store.
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Old 26 Feb 2018, 05:55 (Ref:3803952)   #8
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I find it interesting how well-known brands are splashed across the support catagories like AusGT and the Utes, such as KFC, Hogs Breath, Total Tools, McDonalds... but are rarely seen in any great capacity in Supercars.

There must be some very average team marketing managers in the paddock.
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Old 26 Feb 2018, 06:34 (Ref:3803955)   #9
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I find it interesting how well-known brands are splashed across the support catagories like AusGT and the Utes, such as KFC, Hogs Breath, Total Tools, McDonalds... but are rarely seen in any great capacity in Supercars. There must be some very average team marketing managers in the paddock.
Gentleman drivers put logos on the side to make it look like they have sponsors, when in fact they will either be involved in the business (say Donut King) or be involved with an individual franchisee (McDonalds). None of these have ever had the kind of commitment for the big game, and it is a shame.

Belief is if you have a big name on the car you might be luckier getting others on board...

Wayne Gardiner seemed to get some FMCG involved but really it has been thin on the ground for the most part. Sadly still a niche sport. Energy drinks are profitable enough and "edgy" enough to play in the pond but that is about it.

Hogs Breath has been on the 888 cars - remember the Hogster?
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Old 26 Feb 2018, 06:37 (Ref:3803956)   #10
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Hogs Breath has been on the 888 cars - remember the Hogster?
just adding, currently on DJRTP, front bar.

2 years ago they had a whole car for one event
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Old 26 Feb 2018, 06:51 (Ref:3803961)   #11
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Originally Posted by Mixer View Post
Gentleman drivers put logos on the side to make it look like they have sponsors, when in fact they will either be involved in the business (say Donut King) or be involved with an individual franchisee (McDonalds). None of these have ever had the kind of commitment for the big game, and it is a shame.

Belief is if you have a big name on the car you might be luckier getting others on board...

Wayne Gardiner seemed to get some FMCG involved but really it has been thin on the ground for the most part. Sadly still a niche sport. Energy drinks are profitable enough and "edgy" enough to play in the pond but that is about it.

Hogs Breath has been on the 888 cars - remember the Hogster?
Hogs are on the DJRTP cars, albeit somewhat small.
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Old 26 Feb 2018, 07:18 (Ref:3803969)   #12
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Supercheap now are arguably the benchmark, using the same B2B model that Kmart racing used to get all their suppliers involved, and constantly promoting the race team in-store.
I wonder if Supercheap are paying as little as Kmart did back in the day? Story was the associated brands picked up the majority of the tab in return for store placement and being featured in catalogues.
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Old 26 Feb 2018, 07:40 (Ref:3803975)   #13
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I wonder if Supercheap are paying as little as Kmart did back in the day? Story was the associated brands picked up the majority of the tab in return for store placement and being featured in catalogues.
It is likely the same now, and with the rise in private label brands taking up space on shelves, you can imagine the "negotiations" with suppliers might be a bit one sided.

But at least they get something out of it, allegedly unlike Wesfarmers suppliers!
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Old 26 Feb 2018, 08:20 (Ref:3803980)   #14
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I wonder if Supercheap are paying as little as Kmart did back in the day? Story was the associated brands picked up the majority of the tab in return for store placement and being featured in catalogues.
Target did the same for nearly 30 years with Ganassi in Indycars
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Old 26 Feb 2018, 09:37 (Ref:3803995)   #15
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I wonder if Supercheap are paying as little as Kmart did back in the day? Story was the associated brands picked up the majority of the tab in return for store placement and being featured in catalogues.
That is correct re Kmart.

It also helped that a few key people there had an interest in motorsport.
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