1. 9-1 Chapter 9 Preevent Evaluation McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved

2. 9-2 Preevent Evaluation An Effort to Evaluate Sponsorship Opportunities with the Goal of Identifying the Best Opportunities for Investment While Rejecting Those that Are Unlikely to Produce an Adequate Return on the Sponsorship Investment Recall Earlier Premise that Sponsorship Motives Have Evolved to Focus on ROI

3. 9-3 Reasons for Increased Emphasis on Preevent Evaluation Increased Emphasis on ROI Increased Cost of Sponsorship Increased Number of Sponsorship Opportunities Increased Opportunities Beyond Sports Better Descriptions of Sponsee/Sponsor Target Markets

4. 9-4 Increased Emphasis on ROI Sponsors Will Weight the Cost of Sponsorship Against the Benefits Specific Marketing Objectives Associated with the Sponsorship Investment Preevent Evaluation Represents an Effort to Estimate the Value of the Anticipated Results

5. 9-5 Increased Cost of Sponsorship Rights Fees for Major Events Have Experience an Upward Trend World Cup of Soccer Sponsorship: $17.5 Million in 1994; $40 Million in 2006 Also Need to Consider Cost of Leveraging

6. 9-6 Increased Number of Sponsorship Opportunities Properties Adding to Sponsorship Base Properties Adding New Sponsorship Levels Properties Seeking Sponsors for First Time New Events Seeking Sponsors Sponsors Seeking International Opportunities

7. 9-7 Increased Number of Opportunities Beyond Sports Causes –American Express & Muscular Dystrophy Association Entertainment, Tours & Attractions –Ameriquest & the Rolling Stones Concert Festivals, Fairs & Annual Events –J 2 O & London Comedy Festival Arts –DaimlerChrysler & Van Gogh Art Exhibit

8. 9-8 Better Descriptions of Sponsee’s and Sponsor’s Target Markets More Information Better Defined Small Target Markets Better Targeting Available When Prospect Engages in Preevent Evaluation

9. 9-9 When Are Preevent Evaluations Needed? When Existing Contracts Expire When New Opportunities Emerge –Property Initiates Sponsorship Program –Existing Sponsors of Property Drop Out –Property Increases Number of Sponsors When a Marketer Decides to Seek Sponsorship Opportunity for First Time

10. 9-10 Evaluation by the Potential Sponsor Identify Corporate Marketing Objectives Delineate & Prioritize Specific Objectives Identify Set of Evaluation Criteria Assign Weight to Each Criterion in Model Rate Each Criterion (for Each Alternative) Select/Reject Opportunities Based on the Systematic Evaluation of Each Alternative

11. 9-11 Identify Corporate Marketing Objectives What Do We Want to Achieve with Our Marketing Strategy? Examples: –Increase Awareness –Enhanced Consumer Perception –Strengthen Brand Loyalty –Increase Sales –Attain Positive Public Relations & Publicity

12. 9-12 Delineate & Prioritize Specific Objectives What Do We Want to Achieve with Our Sponsorship Strategy? What Priorities? Possible Sponsorship Priorities –(3) Increase Awareness –(4) Enhanced Consumer Perception –(2) Strengthen Brand Loyalty –(1) Increase Sales –(5) Attain Positive Public Relations & Publicity

13. 9-13 Identify Set of Evaluation Criteria Identify A Broad Set of Evaluation Criteria

14. 9-14 Identify Set of Evaluation Criteria Break Each Criterion Down into More Specific Evaluation Criteria; For Example: Budget Considerations –Affordability –Cost Effectiveness –Tax Benefits

15. 9-15 Assign Weight to Each Broad Criterion in Model Weights Should Reflect the Relative Level of Importance of All Criteria to Be Used in the Evaluation Process Common to Use 100 Point Basis for Allocation Purposes Other Basis Can Be Used if Desired

16. 9-16 Assign Weight to Each Broad Criterion in Model Consider the Following 3-Criteria Model Using a 100 Point Basis –Target Market Considerations (60) –Budget Considerations (30) –Event Management (10)

17. 9-17 Reallocate Weights to Each Specific Criterion in Model For Each Broad Criterion, 1 or More Specific Criteria Will Be Used in the Evaluation Process Each Specific Criterion Will Be Assigned a Weight that Reflects Its Importance in the Assessment of the Broad Criterion in Which It Is Listed

18. 9-18 Reallocate Weights to Each Specific Criterion in Model Instead of a 100 Point Basis, the Basis Is the Number of Points Assigned to Each Broad Category In the Previous Hypothetical Model, the Points Were Allocated As Follows: –Target Market Considerations (60) –Budget Considerations (30) –Event Management (10)

19. 9-19 Reallocate Weights to Each Specific Criterion in Model In This Hypothetical Model, Assume that the 60 Points Allocated to Target Market Considerations Are Reallocated As Below: Target Market Considerations (60) –Geographic Media Coverage10 –International Coverage 2 –National Coverage 8 –Demographic Fit30 –Size (Reach)10

20. 9-20 Rate Each Criterion Using An Appropriate Measurement Scale, Each Criterion Is Rated on Its Merits Most Scales Use Between 5 and 9 Points in Order to Allow Adequate Discrimination Generally, a Low Evaluation Is Assigned a Low Number; a High Evaluation Is Assigned a Number at the High End of Scale

21. 9-21 Rate Each Criterion Consider a 9-Point Scale Where -4 Is a Poor Rating and +4 Is an Excellent Rating; the Scale Has a Midpoint of Zero. Each Criterion Can Now Be Rated on the 9-Point Scale

22. 9-22 Rate Each Criterion Consider an Example Where Coca-Cola Is Considering Renewal of Its Sponsorship with FIFA and the World Cup of Soccer Criterion Weight Rating W*R Target Market Considerations(60) –Geographic Media Coverage 10 +440 –International Coverage 2 +4 8 –National Coverage 8 +1 8 –Demographic Fit 30 +390 –Size (Reach) 10 +440

23. 9-23 Complete the Ratings Process Multiply Each Rating by the Weight for the Corresponding Criterion Criterion Weight Rating W*R Target Market Considerations (60) –Geographic Media Coverage 10 +440 –International Coverage 2 +4 8 –National Coverage 8 +1 8 –Demographic Fit 30 +390 –Size (Reach) 10 +440

24. 9-24 Sum Results for All Criteria Result Will Be a Single Grand Total Maximum Possible Points for Any Model Equals the Aggregate Weight Total Times the Best Rating for Each Criterion In this Overall Example: 100 x 4 = 400

25. 9-25 Applying the Results Use the Same Model to Compare Each Alternative Sponsorship Being Considered Compare Results of One Alternative to Another Compare Results to an Established Benchmark

26. 9-26 Applying the Results

27. 9-27 Overview of the Process

28. 9-28 Sponsee Applications Allows Sponsee to Evaluate Its Proposal from the Prospective Sponsor’s Perspective Understand Prospect’s Priorities Can Help Sponsee Decide Which Components to Offer in Its Proposal

29. 9-29 Closing Capsule Prospects Have Many Opportunities from Which They Can Choose The Increase in Opportunities and a Major Focus on ROI by Prospective Sponsors Has Led to Greater Emphasis on Preevent Evaluation

30. 9-30 Closing Capsule Systematic Preevent Evaluation Should Increase the Likelihood that the Sponsorship Will Achieve the Objectives Sought by the Sponsor Fewer Sponsorships Should Fail Fewer Failures = Higher Renewal Rates