Navigate Research

Industry Insights

As the industry leader in evaluating and measuring marketing investments, Navigate has a wealth of knowledge in the sponsorship and marketing space. This blog shares our knowledge and insights on current events in the sports business, marketing and sponsorship worlds.

Beyond the Valuation

Navigate Research - Tuesday, February 23, 2016
Written by: Dan Kozlak

Sponsorship valuations have become an increasingly important and valuable tool. The significant growth in sponsorship investment levels corporate partners allocate from their marketing budgets to achieve advertising and business initiatives, as well as the dependence properties place on sponsorship revenue streams to operate at the highest level possible, have necessitated their use.  Valuations serve as a credible source for determining an appropriate price for a partnership, as well as demonstrating the return on investment a partner has received from the exposure generated by properties’ assets.  

By educating both properties and corporate partners about the appropriate value for partnerships, it can help generate an efficient market place where both sides can feel confident executing such partnerships.  However, determining the total fair market value price of a sponsorship is just one advantage valuations provide.  As anyone who has been involved in sponsorship negotiations can attest to, establishing an appropriate price for a partnership is just the initial step.  

There are a few other key components a valuation can satisfy beyond determining a fair price.
In instances where the sponsorship in question is new, dramatically expanded, or does not have a renewing partners, valuations can serve as a prospecting guide.  Establishing a fair market price for a partnership enables properties to focus their efforts towards prospective sponsors that can afford such investments and who have historically purchased sponsorships at a similar level.  Instead of simply targeting all potential corporations, setting a desired price allows properties to save time and resources by exploring only feasible partners.  And if it is unknown whether a potential partners would be willing to make such an investment, providing a broad price range during initial conversations can help prospects determine if they would like to further discuss the opportunity or not.  Establishing this pricing level can help save a great deal of time and resources from a partnership development standpoint.

Demonstrating the overall value of a partnership does help to establish the ultimate price it is sold for.  However, a valuation can serve as an asset package management guide.  Almost all sponsors have specific objectives they would like to fulfill from their sponsorship investments. A valuation of each asset can ensure an agreeable portion of the package’s value is being driven by assets that achieve those objectives.  Based on a sponsor’s desired “key performance indicators” (K.P.I.’s), a sponsor and property can work together to ensure the right mix of assets is utilized to deliver against those metrics.  This comes from a combination of the sponsor sharing these objectives and marketing goals (i.e. driving awareness, differentiation from the competition, building brand affinity, product promotion, etc.) and a property supplying and activating appropriate assets to achieve these goals.  However, this is only possible through a full asset package valuation.

Corporations engage in sponsorships with the ultimate goal of garnering a return on investment to their company’s bottom line.  Valuations provide a more accurate means of measuring their generated return against what the sponsorship has proven to be worth.  Measuring this observed fair market value of an existing sponsorship can help a sponsor to determine whether they should renew existing partnerships, optimize their asset mix, expand their partnership, or step away from a partnership.  Properties can also utilize the assessed fair market value to demonstrate to existing or future partners the return they can expect when partnership with their organization.  No matter which side of the partnership the return is measured on, a valuation will provide the most accurate performance gauge possible.

In negotiations, confidently knowing what a partnership should be worth in the marketplace can be very valuable.  Valuations can aid prospective sponsors by indicating whether the price they are being pitched appropriately aligns with the assets they are being charged. Valuations also aid properties by determining where they can establish pricing at knowing they can confidently walk away from a low-pitching prospect to pursue an offer they know they can command in the market place.  Having this information provides either side with an upper hand during negotiations.  By establishing the fair price of a sponsorship, partners can make appropriate decisions in their best financial interests.

While it is important to understand the best price to place on a given sponsorship, there are many other additional advantages to conducting valuation.  Valuations can assist in prospect targeting, asset package management, accurately gauging return on investment, and negotiation strategies.  Given the increasing amount of cost associated with sponsorships, executing valuations can be well worth their investments.

Navigate Research wins national award for second year in a row

Navigate Research - Tuesday, December 15, 2015
Navigate Research, an industry leader in evaluating and measuring marketing investments in sports and entertainment, announced today that they have won the 2015 National "Best and Brightest Companies to work for®” award from the National Association for Business Resources (NABR). 

Navigate is also a proud winner of the 2015 Chicago’s Best and Brightest Companies to work for, 2014 National Best and Brightest Companies to work for, 2014 Chicago’s Best and Brightest companies to work for, 2015 SportsBusiness Journal Forty Under 40 (AJ Maestas) and Forbes’ 10 Best Organizations to Work For in Sports. 




About Navigate Research
Navigate Research specializes in the evaluation and measurement of marketing investments, primarily in the sports and entertainment industry.  We help our clients determine the value of their partnerships and understand how they're performing.  We work with a variety of brands and agencies, as well as professional teams and leagues.  Some of our clients include ESPN, NFL, Anheuser-Busch, Southwest Airlines, The Los Angeles Lakers, The Ohio State University and The National Rugby League.  www.NavigateResearch.com 

About "Best and Brightest Companies to Work For®"
The "Best and Brightest Companies to Work For®", a program of the National Association for Business Resources is presented annually in several markets: Detroit, Chicago, Atlanta, San Francisco, Milwaukee, Houston, Grand Rapids and Nationally.  

The Evaluation Process included representatives from the Best and Brightest team working with the over 450 companies to identify their strengths and opportunities through an in-depth evaluation.

Participants' practices were bench-marked against other participants in their region and across the nation. This multifaceted approach created a rich assessment that provided opportunities for expert analysis reports, competitive comparisons overall assessment of other factors including Return on Investment.

Exercising Your Willpower

Navigate Research - Monday, December 14, 2015

Written by: Kelli Williams

For many the holiday seasons is synonymous with overindulging and overspending. So it should not come as a surprise that eating less and saving more are among our top New Year’s resolutions…every year. According to Nielsen, in January 2015 the top resolutions were: 
  • stay fit and healthy (37%)
  • lose weight (32%)
  • enjoy life to the fullest (28%) 
  • spend less, save more (25%)

While the majority of Americans set resolutions for themselves on January 1st, most are broken before the month is over. Tremendous willpower is required for each new resolution committed to. More than likely it’s an amount the brain just can’t handle, especially when five of them are set at once.

Willpower is powered by cells in the prefrontal cortex area of the brain, right behind the forehead. The prefrontal cortex is also charged with helping solve abstract problems, maintaining focus and controlling short-term memory. Like any other muscle the prefrontal cortex needs to be trained and it needs to happen gradually. Just like one can’t expect to go from lifting a 5 lb. dumbbell to dead lifting their body weight overnight, we can’t go from a diet of fast food to eating only homemade, organic meals starting January 2nd.

The reason most resolutions fail is that they are intangible, making it really hard for the poor, overworked prefrontal cortex to really grab hold and focus on them. But, luckily we can ‘trick’ our brains into getting better at this by developing (tiny) ‘habits’ instead of resolutions. For example, instead of saying that you will “eat healthier” (a vague resolution) you can start by developing a habit, like “try one new healthy recipe every Sunday” (a concrete habit). Or, instead of “get organized” you can start by simply making your bed every morning.

Author Gretchen Rubin has researched the process of creating and keeping habits and shares a variety of strategies in her book, “Better than Before: Mastering the Habits of Our Ordinary Lives”. 

Two of the key takeaways are:

  • Stop Making Decisions. Every time you have to make a decision (should I go to the gym?) you tax your willpower. Instead, create fixed habits by having a plan that does not require a decision and is easy to execute. Doing something every day and having it on your schedule (gym every day at 7 a.m.) is often easier – and more powerful - than doing something every once in a while or when the mood strikes.  
  • Know Yourself. Rubin believes that people likely fall into one of four buckets when it comes to habits, based on how we manage internal and external expectations. The four archetypes are: Upholder (someone who tends to meet both outer and inner expectations), Questioner (someone who resists outer expectations but tends to meet inner ones), Obliger (struggles with inner expectations but tends to meet external ones) and Rebel (resists both outer and inner expectations). You can find out which one you are, here. She suggests that we do not try to change our tendency but instead design our habits in ways that will work for us.

At Navigate, we have gotten a head start on building good habits for the New Year with a company-wide workout challenge. We have committed to working out 4+ times a week through the end of the year, with all the workouts being publicly tracked. This challenge aligns with both of the takeaways above – 1.) The decision on what to do (workout for 30+ minutes) and how often (4+ times a week) was made for us (saving some precious willpower) and 2.) The public tracking is a great way to add external expectations – especially powerful for those Upholders and Obligers among us.

We will soon be overwhelmed with articles on how to best keep our resolutions. These are just a couple of ways that it’s working for us. Best of luck in creating and keeping your resolutions this year – just remember to make it easy for (or trick) your brain - it is a muscle that needs time to adjust, just like any other!

Sponsorship and Sustainability in Sports

Navigate Research - Thursday, December 03, 2015

Written by: Jordan Bloem

With world leaders convening in Paris this week for climate discussions, the issue of sustainability is once again center stage in the news – and many players in world of sports have embraced their role in environmental responsibility. Teams and leagues throughout professional and collegiate sports have invested heavily in initiatives that are not only environmentally responsible but also provide valuable sponsorship opportunities for the right partners. The examples below show properties and brands that have led the way in “green” sponsorship in sports.

The HEAT Group Achieve LEED Gold Certification for AmericanAirlines Arena

 

AmericanAirlines Arena is proud to be LEED certified.

Earlier this year the U.S. Green Building Council awarded AmericanAirlines Arena with a LEED Gold certification, the first ever LEED Gold certification awarded by USGBC for a sports and entertainment facility. LEED certification has saved money for The HEAT Group from an efficiency standpoint and has also provided a valuable new sponsorship asset.

The LEED Gold certification builds on The HEAT Group’s original LEED certification achieved in 2009, which at the time attracted key partners including Home Depot and Waste Management, who combined to invest $1 million in sponsorship of HEAT’s sustainability work during the first year of LEED certification. Since that time Pepsi, Levy Restaurants and Pritchard Sports and Entertainment Group have also joined as sponsors of HEAT’s sustainability efforts.

Waste Management Phoenix Open Diverts 100% of Waste from Landfills


Recycling and compost bins at the Waste Management Phoenix Open.

The PGA TOUR’s most highly attended event is also its greenest. The Waste Management Phoenix Open, affectionately known as the “Greenest Show on Grass,” diverted 100% of tournament waste from landfills for the third consecutive year in 2015. With over half a million attendees, this is no small feat.

Waste Management has intelligently used the platform as title sponsor of the Phoenix Open to demonstrate its green capabilities, providing waste, recycling, and portable restroom services. In this way a brand that many would consider in no way related to sports has become endemic to one of the most popular sporting events in Phoenix each year and synonymous with sustainability.

Eat Local at MLB Stadiums

In 2011, Luke Yoder, the director of field operations at Petco Park, planted an assortment of vegetables in a garden at the ballpark. Those crops eventually made their way into food items sold at the stadium and began a trend of MLB teams planting their own gardens, including Coors Field in Denver, AT&T Park in San Francisco, and most recently Fenway Park in Boston.


Fenway Farms, presented by Stop & Shop, Dole, Sage Fruit, and Aramark.

These farms have provided healthy local produce for ballpark food and have also yielded sponsorship opportunities, particularly for food brands that now have a more organic (pun intended) way to connect with baseball fans. For example, “Fenway Farms,” which will grow an estimated 4,000 lbs of produce annually, is presented by Stop & Shop, Dole, Sage Fruit, and Aramark.

A New Opportunity in Sponsorship

As properties continue to increase their green initiatives, creative opportunities for sponsors will continue to grow. Brands traditionally align with properties to improve their perception among fans, however with a growth in sponsorship of green initiatives brands can now also reach environmentally conscious spectators that might be less interested in the game on the field but dragged to a game by friends or family.

It will be fascinating to watch as green sponsorships continue to grow more prevalent, not to mention beneficial for the future of a healthy planet.