“Is our sponsorship package good value for money?”
This was the challenge posed by our client.
Read on to find out the answer and see the novel way we used our analysis to inform negotiations.
We modelled the full marketing mix to work out what was driving sales. The sponsorship package did, in fact, drive significant sales, but not as efficiently as it might have done. In fact, it was operating at only 70% of the efficiency of the best-performing channel, TV.
We went further. By separating out the key programs within the package and modelling them individually, we identified a subset that was effective – mainstream, regular series. More obscure, and single-episode programs were not working.
In renewal negotiations, the client had a desire to retain the package, but only at the right price. So, rather than recommend that they stop using sponsorship, we turned it on its head and recommended paying no more than 70% of the current price, i.e. low enough to make it cost-effective. Using our model findings, we were also able to advise on the ideal composition of the package.
The deal was up for renewal and in the negotiations, the media owner was not prepared to negotiate the price. The client withdrew from the negotiations and instead deployed the budget behind its best-performing channels, realising an additional 30% returns on the sponsorship budget.
Our work gave our client the confidence they needed to make a tough call, in the interests of the best possible business performance.