Digital Marketing and Sponsorship
Are you a marketer? More specifically, do you work in digital marketing? If so, then you’re at an advantage when it comes to sponsorship. For you, it’s easier to identify which sponsorship assets could potentially be more valuable thanks to your background.
Okay, but what if your area of expertise lies outside of marketing? That’s okay. In today’s article, I’m going to teach you to think more like a marketer so you can discover high-value assets in your own sponsorship program.
Let’s get started!
The Sponsorship Marketing Funnel: Breaking It Down
In this section, I want to identify the common stages of the digital marketing sales funnel so I can compare them to the sponsorship assets you can present to a target sponsor. I call this melding of marketing and sponsorship the sponsorship marketing funnel.
Here are the steps of the funnel from the top to the bottom. The assets become more valuable the deeper down you go, FYI.
Cost Per Thousand Views (CPM)
So, what goes at the very top of the funnel? That would be the cost per thousand views or impressions, which is abbreviated as CPM. It’s also known as cost per mille, which is where the abbreviation comes from.
In digital marketing, CPM represents how much a marketer pays for every 1,000 impressions on their webpage. That’s why it’s cost per mille, as mille is a Latin word that translates to thousands.
In other words, if you had a website publisher charge you $3 for CPM, then for every 1,000 impressions, that’s $3.
An impression, by the way, is another word for a view on a digital ad.
How do you translate a marketing concept like CPM to sponsorship? Logo placement springs to mind, as logos are a good way to get a large set of eyes on something (even though I don’t really like logos as sponsorship assets for much).
In the world of digital marketing, most marketers are only willing to pay between $5 and $10 for every 1,000 impressions. In other words, that’s pennies or even fractions of pennies for every view.
That’s why logos work in this application. Since CPM is very cheap and logos are not regarded as a highly valuable asset, they’re the closest equivalent in sponsorship.
Cost Per Click (CPC)
The next digital marketing asset that would go into your sponsorship marketing funnel is the cost per click or CPC. This is more valuable than CPM, but still not the most valuable asset in the funnel by far.
While CPM tracks who views your digital ads, CPC takes it one step further. This is a metric of who clicks or otherwise engages with your digital ad. In other words, the next time you’re online without any ad blockers, if you clicked an ad, you’re contributing to its CPC.
Digital marketers will have a max CPC, which represents how much money they will spend on CPC. This is different from the actual CPC, which is the price paid per click. This value is usually lower than the max CPC, sometimes by a slight margin and sometimes by significantly more money.
Although it varies, the average CPC price is between $2 and $10.
Now that you understand CPC a little bit better, what is its sponsorship equivalent? It’s directing traffic to your sponsor’s website or a certain webpage on their site.
Putting a logo hyperlink on a website isn’t really going to drive the CPC rates you might have been hoping for. Instead, CPC is often highest when it’s tied to an event such as a contest or giveaway, as you’re driving massive traffic to the sponsor’s website or webpage.
Cost Per Send (CPS)
LinkedIn, which is one of the most popular social media networks, has an advertising system that uses a metric known as the cost per send or CPS. When you use the LinkedIn feature InMail to advertise, the ads get sent straight to a LinkedIn user’s mailbox.
Only this form of LinkedIn advertising uses CPS. The rest, such as text ads and Sponsored Content, rely on CPM or CPC bidding.
The average CPS cost is $0.80 per InMail send, but the price can be as high as $1.
The sponsorship equivalent to CPS is a lot easier to determine. It’s e-blasting your contacts list with sponsorship solicitations.
Yet keep in mind that when sending InMail messages through LinkedIn, you have to go through your contacts list and mail people one at a time, the same of which cannot be said for e-blasting.
By taking an InMail approach and segmenting your audience and sending them tailored content, an e-blast can be a lot more valuable. Although at that point, it’s not technically an e-blast.
Cost Per Lead (CPL)
Now we’ve reached the bottom of the sponsorship marketing funnel to get to the most valuable asset of all. It’s the cost per lead or CPL.
CPL determines the success of a digital marketing campaign based on the number of leads generated.
How you define a lead matters. For some companies, an email address is a lead. For others, it’s scheduling a sales meeting or having someone sign up to be part of your company’s email newsletter. For others still, leads are potential customers that you must nurture to convert into long-term paying customers.
How much money should you spend to acquire leads? How much is too much versus not enough? The CPL will tell you, and that’s why it’s at the bottom of the sponsorship marketing funnel. It’s incredibly high-value.
Here’s an example for you. Let’s say your company launched a CPC campaign, also known as a pay-per-click or PPC campaign. You put $2,000 into the campaign. In the end, you acquired 15 new leads.
To get the CPL, you divide the money you spent by the leads you acquired. In this case, it’d be 2,000 divided by 15, which is $133.33 per lead.
Is that too much money? This isn’t something I can answer for you. It all depends on the cashflow your company currently has as well as your digital marketing budget. For a startup or small business, I’d say yes, $133 per lead might be too much. For a mid-sized or larger business, it’s a drop in the bucket.
In my experience, digital marketers are willing to pay $50 to $2,000 (sometimes more) for a lead.
By increasing your lead volume yet decreasing your CPL, your digital marketing campaign is poised for success. Just remember though that obtaining a lead isn’t everything. You must convert the lead, and that doesn’t always happen.
The more qualified the lead, the better. Qualified leads know about your company and its products and services. They might have researched your product/service pricing too, so they’re usually readier to buy.
Okay, so how do we translate CPL to sponsorship assets? By offering customizable, data-driven, highly-researched assets, of course.
In other words, you’ve done your audience research, you’ve divided your audience segments into niches, and you’ve taken the time to learn about your sponsor’s target audience to determine where your niche segments fit.
Logos have no place here. They’re static, offering no room for customization. They’re worth very little money, which is why they should stay firmly at the top of the sponsorship marketing funnel.
Your assets, besides being customizable, must also be highly measurable. Sponsors love reviewing KPIs as a sponsorship arrangement wraps up to determine what you were able to do for them. Did you increase their web traffic? Boost their audience? Increase their leads? Help their sales spike?
If the answer is yes to all the above or most of the above, then you have a higher likelihood of that sponsor agreeing to work with you again.
Digital marketing and sponsorship share a lot in common. As you go down the sponsorship marketing funnel, the value of your sponsorship assets increases. Compare, for instance, CPM, which is pennies on the dollar, to CPL, which might be worth thousands of dollars.
I hope this post helped you think about your own sponsorship program in a more marketing-minded way. If you still need some help in this area, I recommend checking out my free training called How to Grow Your Sponsorship Program.
In this training program, you’ll learn how to switch from older transactional sponsorship models to newer, more modern ones. I’ll also tell you what inspires sponsorship decisions and how you can make your sponsors more like partners.
ABOUT THE AUTHOR
Chris Baylis is the President and CEO of The Sponsorship Collective and a self-confessed sponsorship geek.
After several years as a sponsor (that’s right, the one investing the money!) Chris decided to cross over to the sponsorship sales side where he has personally closed tens of millions of dollars in sponsorship deals. Chris has been on the front lines of multi-million dollar sponsorship agreements and has built and coached teams to do the same.
Chris now spends his time working with clients to value their assets and build strategies that drive sales. An accomplished speaker and international consultant, Chris has helped his clients raise millions in sponsorship dollars.