Gemba Revolutionises Approach To Valuing Sponsorships With New Platform

Gemba Revolutionises Approach To Valuing Sponsorships With New Platform
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Sport and entertainment consultancy Gemba has unveiled a new platform set to revolutionise the approach to valuing sponsorships by providing both buyers and sellers with the ability to recognise the physical assets as well as the intellectual property of sponsorships.

Turnstile has been more than two years in development, with Gemba carrying out extensive testing with leading international brands and rights holders, including Formula 1, before bringing the new platform to market.

Rob Mills (pictured above), CEO and director of Gemba said the global sponsorship industry is a $US62 billion market, yet there has never been an effective valuation approach to help buyers and sellers assess the appropriate price for a sponsorship.

“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,” he said.

“Furthermore, these sorts of metrics only seek to measure the logo exposure of an asset – they do not holistically capture the true value of sponsorship.

“Our guiding principle in developing Turnstile was to provide a methodology that moves beyond just exposure measurement and seeks to understand the intellectual property value of sponsorship assets.

“The industry does not need more media equivalencies; it needs a robust approach to pricing using actual market benchmarks.”

Turnstile achieves this by providing both buyers and sellers with a holistic valuation approach that values sponsorships across three core components:

  1. Benefits: tickets, hospitality, media assets, and other inventory with proven market rates.
  2. Exposure: using a proprietary methodology to assess the effectiveness of logo exposure, Turnstile captures logo exposures and then outputs values that reflect the actual market rates of the sponsorship industry.
  3. Intellectual property: a proprietary algorithm that calculates the fan bases of sponsorship properties, with consideration of fan engagement levels and the purchasing power of fans.

For the final stage of development, Turnstile was piloted with Formula 1, who was looking to reframe its approach to valuing sponsorship assets under the new ownership of Liberty Media.

Murray Barnett, head of global sponsorships and commercial partnerships at Formula 1, said: “When Gemba showed us the concept for Turnstile, it immediately struck a chord with the way we want to shape the conversation with our commercial partners and teams moving forward.

“We believe in a more meaningful measurement of a sponsorship, rather than discussing pure visibility and TV numbers, as this tells us nothing about the real audience and engagement of fans.

“Turnstile is allowing us to clearly demonstrate the real value of an association with F1, whilst also helping us identify new opportunities to grow our commercial program.”

Turnstile was officially launched at the MIT Sloan Sports Analytics Conference in Boston over the weekend, and is now being rolled out to brands and rights holders across the Asia Pacific, Europe and the US.

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