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Sports consultancy Gemba launched a new tool 'Turnstile' for advertisers and sports administrators to value sponsorship packages. Turnstile includes tickets, hospitality and media assets, the effectiveness of logo exposure and the engagement and purchasing power of the sport’s fans.

Sport Sponsorship

Evaluating Sponsorship For The Sport And The Advertiser Is An Intricate Process

TV rights have hit records right around the world with free to air (FTA) rights even more significant as viewships move to mutiple options. In the US we have seen records in NFL, NBA, MLB and NHL. In Australia the NRL and AFL have massive new deals. The NRL routinely has 4 or 5 of the four highest viewed shows in Australia. In the UK and Europe Football TV rights continue to smash records. Last year paid what has been called "obscene' amounts for the EPL rights.

Gemba’s CEO and founder Rob Mills said the Turnstile tool took two years to develop working to identify weaknesses in how brands and advertisers valued sponsorship packages. In a world where advertisers need the exposure and the sports seek to maximise value the pricing and alignment is critical.

“The global sponsorship industry is a $US 62 Billion market, yet there has never been an effective valuation approach to help buyers and sellers assess the appropriate price for a sponsorship,” said Mills in an interview with Murrabilla. ” For decades, media equivalency metrics have provided valuations to the market that bear no connection to the actual contract prices of sport and entertainment assets.” “The consequence of only valuing exposure is that it forces rights holders to cram more logos on their content and this in turn creates share of voice issues for sponsors. We felt that the industry was locked in a vicious circle and we needed to provide some sort of circuit breaker.”

Who is Gemba?

Gemba began in 2006 with offices in Sydney, Melbourne, Auckland, Shanghai and London. For the last two years Mills himself has been based out of the company’s Shanghai and London offices as the company worked with Formula 1 on developing the product. Before joining Gemba, Mills was head of marketing for Adidas including being a member of the company’s Global Olympic Task Force for the Sydney Olympics.

“In addition to mass media and digital channels, the valuation methodology also encompasses the emerging Esports sector,” said Mills. “Our recent work with Formula 1 was a great demonstration of the ability of Turnstile to capture all these channels in the valuation,”

Along with Formula 1, Gemba has recently completed valuations for an English football club, a global football competition, a Grand Slam tennis tournament and the rights of a gaming service. By the end of 2018, Turnstile hopes to have completed valuations for more than USD 750 million of sponsorships.

Mills sees TV rights as still being the key revenue for codes in coming years although sponsorships will become increasingly important: “While Broadcast will still be the major source of revenue for premium sport and entertainment assets, sponsorship will become increasingly important. “The challenge will be for rights holders to create engaging propositions for blue chip brands who want more than just exposure. Building, and in turn pricing, their intellectual property value will be critical in this process.”

Turnstile

Gemba says Turnstile seeks to provide sponsorship buyers and sellers with a holistic valuation approach based on measuring benefits, exposure and intellectual property using proprietary methodology and algorithms. The platform’s goal is “to provide a methodology that moves beyond just exposure measurement and seeks to understand the intellectual property value of sponsorship assets”, continued Mills, asserting the industry needs “a robust approach to pricing using actual market benchmarks.”

In its final stages of development, the Turnstile platform was trialled with Formula One, the brand looking to reframe its approach to valuing sponsorship assets under new Liberty Media ownership.

“We believe in a more meaningful measurement of a sponsorship, rather than discussing pure visibility and TV numbers… Turnstile is allowing us to clearly demonstrate the real value of an association with F1, while also helping us identify new opportunities to grow our commercial program”, said Murray Barnett, head of global sponsorships and commercial partnerships for Formula One.

Officially, Turnstile launched at the MIT Sloan Sports Analytics Conference in Boston on 24 February. Gemba hopes to export its new services now to brand and rights holders across Europe, Asia-Pacific and the USA.

Sources: Murrabilla, Gemba

From a Sunburnt country

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