How Do Team Sponsors Measure Return on Investment?

[Boeing]

Another way to ask is how do Pro Cycling Teams pitch the benefits and return to a sponsor?

It has to be difficult with such a narrow target in a broad international level.

How does one track the growth in attendance or viewership of the event/sport/team/etc among a target audience. Or track the growth in attendance or viewership among those using the specific product or service?

Perhaps some companies just need the loss...for a time being

 

[ingsve]

I'm guessing the measure will ultimately be a comparison to how much it costs to buy ad space in TV and newspapers which can be really expensive. So the mertrics are probably things like how much the logo is seen on screen and how many articles mention the sponsor etc. The value of such exposure is fairly well documented in the advertisement industri as far as I know.

I guess the main issue might be demographic since most of the exposure will be to a very specific group of people, cycling fans. This is why the Tour gets so important since not only does it have bigger exposure than other races it's also the race that bring in the most diverse demographic compared to other races.

 

[swuzzlebubble]

For many companies it is about increasing brand awareness.
Sponsorships are generally quite effective means to do this if starting from a low base compared to spending same money in electronic media.
They meassure effect by survey sample groups to see how mny know their company/ brand.
The effect will diminish over time hence many sponsorships only run a few years.

 

[ElChingon]

The true measure is how much enjoyment or bragging rights the owner who decided to plunk down all that cash gets out of it.

 

[Benotti69]

I dont think it works like that. I with the exception of the TeamSky, Garmin or HTC teams the other teams attract sponsorship because the owner is a fan and decides to put his money into the sport because of this. Whether he can keep doing that at a high level depends on his business staying at the level he put the money in or increasing. Acqua & Sapone in Italy is an example. Owner of A&S is a big fan and sponsors the Masciarelli team, which is his local conti team. Masciarelli was as super domestique for Moser. 1 of his sons rides for Astana, another 2 for A&S.

Another example would be from the same region the pasta brand De Cecco, the owner, a big football fan just bought local team Pescara and they are fighting to get into the top flight for next season. This season is costing beans compared to what next season will cost him in the top flight. Will he sell more pasta? I doubt it, to cover his investment no, but he is a fan.

The sport is going to find it hard to attract big money sponsors with the way the it is being run, so it has to rely a lot on rich fans of the sport willing to invest for little return.

 

[craig1985]

Isn't that same with Liquigas and Lampre, the respective chairmen (or CEO) of both companies are huge cycling fans as well? IIRC the big boss at Liquigas sponsors a cycling team because the cyclists ride on the same roads as his trucks drive along and people will identify with Liquigas this way compared to if he sponsored a football team instead. I think that is why Rabobank are so heavily invested in cycling, because so many of their customer's are cyclists, either they do it for a sport or just to commute to work, ride to the corner store etc. and thus identify with the team a lot more.

Cofidis have tried pulling out of cycling a few times, but keep renewing their sponsorship because they keep finding cycling to be a more worthwhile investment for them. TBH, I'm not looking forward to the day where we don't see Rabobank, Liquigas, Lampre, Euskaltel Euskadi, Lotto (with the new Lotto-Ridley team), Quick Steap (joined with Omega Pharma), AG2R, Cofidis, and FDJ in the peloton in some form. Interesting how despite Pat's attempt to get cash from places like China, the States, cycling's long term sponsors are from cycling's traditional countries.

 

[ansimi]

Companies do surveys about brand awareness and perception. I've done ones with specific questions about which companies (from a list) I think sponsor sports (or entertainment, or community groups, etc.) and then there are other questions about the brands and of course they collect all my demographic information.

They'll track results over time and sometimes even contact the same people. I know I did a survey like this before the 2010 Olympics and then a follow up survey after the games.

 

[BroDeal]

Another way to ask is how do Pro Cycling Teams pitch the benefits and return to a sponsor?

Judging by the figures that Vaughters and Stapleton have used in interviews, I think they just make up the largest number that they can think of, no matter how ludicrous it sounds.

 

[Benotti69]

Isn't that same with Liquigas and Lampre, the respective chairmen (or CEO) of both companies are huge cycling fans as well? IIRC the big boss at Liquigas sponsors a cycling team because the cyclists ride on the same roads as his trucks drive along and people will identify with Liquigas this way compared to if he sponsored a football team instead. I think that is why Rabobank are so heavily invested in cycling, because so many of their customer's are cyclists, either they do it for a sport or just to commute to work, ride to the corner store etc. and thus identify with the team a lot more.

Cofidis have tried pulling out of cycling a few times, but keep renewing their sponsorship because they keep finding cycling to be a more worthwhile investment for them. TBH, I'm not looking forward to the day where we don't see Rabobank, Liquigas, Lampre, Euskaltel Euskadi, Lotto (with the new Lotto-Ridley team), Quick Steap (joined with Omega Pharma), AG2R, Cofidis, and FDJ in the peloton in some form. Interesting how despite Pat's attempt to get cash from places like China, the States, cycling's long term sponsors are from cycling's traditional countries.

That is based on tradition, history and CEO's being amateur cyclists or huge fans. For the newer cycling nations if it aint getting tv time they aint interested.

 

[Mambo95]

It's a strange and unusual world. Sports sponsorship is a mysterious mistress.

The one massive advantage that cycling has is that the team name is the sponsor's name. It gets said over and over. By contrast can you name Manchester United's shirt sponsor or the primary sponsor of the Williams F1 team. Probably not, you're cycling fans. But I'm not sure that fans of those sports have high brand recognition (for much greater price - Man U is £20m per year for Sharp or whoever it is).

Who benefits and who doesn't is unsure, but I think they all get value for money. I know for a fact that HTC were very happy with their investment (a work colleague's husband works for them), but it was Cav that they were happy with, and pretty much just Cav. That may be the future of sponsorship.

Anyway, the sport needs to move towards a TV rights based economy - like every other sport, but the ASO want all the candy for themselves. Pat and the UCI are easy villians, but it's the ASO that are the real problem - horribly under selling TV rights and then not sharing them.

 

[BroDeal]

Anyway, the sport needs to move towards a TV rights based economy - like every other sport, but the ASO want all the candy for themselves. Pat and the UCI are easy villians, but it's the ASO that are the real problem - horribly under selling TV rights and then not sharing them.

What makes you guys so sure that there is a big pot of gold at the ASO? Cyclismas has an article where they estimate ASO's revenue from TV rights for the Tour. The conclusion was that the ASO's TV revenue for the Tour is around 50 million euros. That is revenue. ASO's profits are around 30 million a year, and that includes all business activities, of which the Tour is only a small part. The ASO could hand over every euro it makes to the World Tour teams, and it would still only amount to 2/3 of a million euros per team, a fraction of what it costs to pay a single star rider.

 

[AussieGoddess]

What makes you guys so sure that there is a big pot at the ASO? Cyclismas has an article where they estimate ASO's revenue from TV rights for the Tour. The conclusion was that the ASO's TV revenue for the Tour is around 50 million euros. That is revenue. ASO's profits are around 30 million a year, and that includes all business activities, of which the Tour is only a small part. The ASO could hand over every euro it makes to the World Tour teams, and it would still only amount to 2/3 of a million euros, a fraction of what it costs to pay a single star rider.

+1 - Thank you BroDeal.

I linked to those articles earlier .... and it does go through in great detail the revenue of ASO and what might be available.

The truth is, ASO is NOT hugely profitable, so they are not the evil ones keeping all the cash away from the teams.

I do think cycling needs to change the way they market and promote the product of cycling .... and then more money will be available to spread around.

I like many of JV's ideas - but sadly it would take a revolution that isnt that likely given the vested interests involved.

 

[BroDeal]

I do think cycling needs to change the way they market and promote the product of cycling .... and then more money will be available to spread around.

I like many of JV's ideas - but sadly it would take a revolution that isnt that likely given the vested interests involved.

That is it right there. The sport would need to dramatically increase the size of the pie in order to give out the type of money to make teams financially stable in the way that JV wants.

If we put the combined budgets of the World Tour teams plus the pro continental teams that get invited to the big races at 400 million euros and if race promoters split earnings 50/50 with the teams then we would need 800 million in earnings for races. With the ASO only making, perhaps, 10 million from the Tour de France, we would need 80 races with the current TV and sponsor earning power of the Tour. The economics just do not work.

 

[craig1985]

The other problem is that unlike football, basketball, hockey etc. is that cycling's stadiums are open roads so you can really charge people to sit by the side of the road (not would it be possible), or if the race goes by your front door. I can ride on the same roads as Contador, Gilbert etc., but I can't go to Old Trafford and expect to have a kick around with my mates.

 

[Benotti69]

I would hope that the top teams could see that cycling is not moving forward and they make a break from the UCI, but they cant because they are all caught in the 'soup' for want of a better decsription.

The top football clubs in Europe have discussed a breakaway European league for years and it still might happen.

Now would be the best time to form a separate cycling 'league'. The only teams i cant imagine going for it would be those teams close to McQuaid, yeah Bruyneel is one.

But cycling very rarely does things right so i am not holding my breath.

 

[swuzzlebubble]

http://www.search2retain.com.au/files/80SN9RH2OP/search2race_PartnerSponsor.pdf

 

[nobilis]

Not sure if it's the right thread but I was wondering about Geox and their decision to pull out from cycling sponsorship. I've noticed that they are a minor sponsor for the Red Bull Racing F1 team. So the question is, is it better for the company to be a minor sponsor for an F1 team then being the title sponsor for a major cycling team, in terms of image, visibility and ROI?

 

[Cobblestoned]

Not sure if it's the right thread but I was wondering about Geox and their decision to pull out from cycling sponsorship. I've noticed that they are a minor sponsor for the Red Bull Racing F1 team. So the question is, is it better for the company to be a minor sponsor for an F1 team then being the title sponsor for a major cycling team, in terms of image, visibility and ROI?

There is one thing I know for sure. That is the fact that I'll never buy Geox shoes again, even when they are cool or even priceless.
Saw and bought a nice pair of shoes, ahhh Geox, cool, official teammember now and shoes of good quality.
Was even thinking about bringing them back now.

F*** them.

 

[nobilis]

There is one thing I know for sure. That is the fact that I'll never buy Geox shoes again, even when they are cool or even priceless.
Saw and bought a nice pair of shoes, ahhh Geox, cool, official teammember now and shoes of good quality.
Was even thinking about bringing them back now.

F*** them.

Had the same experience. I bought a pair of Geox last year, very happy with them but i won't get other ones for sure.

 

[The Hitch]

Its hard to know. It might seem weird but when the festina affair happenned in 1998 the sale of all festina products went up significantly as a result.

Really. Thats good to hear I guess. I love how Festina continues to sponsor Giro and Tour and Vuelta.

There is one thing I know for sure. That is the fact that I'll never buy Geox shoes again, even when they are cool or even priceless.
Saw and bought a nice pair of shoes, ahhh Geox, cool, official teammember now and shoes of good quality.
Was even thinking about bringing them back now.

F*** them.

Had the same experience. I bought a pair of Geox last year, very happy with them but i won't get other ones for sure.

Amen brothers.

 

[BroDeal]

Amen brothers.

What makes you guys so sure it is Geox's fault?

Gianetti seems to lose a lot of sponsors.

 

[The Hitch]

What makes you guys so sure it is Geox's fault?

Gianetti seems to lose a lot of sponsors.

Maybe not, but its more about the message.

Sponsor cycling - we buy. Leave cycling to sponsor its enemies eg f1 - we don't buy.