Studies that have examined consumers response to celebrity endorsements in advertising still suggest that this tool is extremely efficient for influencing, at least one of the 3 levels of their relationship with the brand: Awareness(Mind), Connection (Heart) and Behavior (pocket). The studies are conflicting in what is the impact level and whether if really impacts all the 3 but there seems to be no doubt that there is an influence. As a validation of this belief is that companies are increasing their spending and plan to continue doing it. But, on the other hand, the cost of using this tool are extremelly high and the risks are undeniable. Therefore, it becomes crucial that organizations are able to manage their portfolio of sponsorship and to measure if they are being sucessfull or not. In other words, organizations want to make smart decisions and need information to support them on that. This is what the paper “Sports Assets Portfolio Management” i’ve presented intends to address. The following slide will provide na overview of what can be found in that paper.

1. Sports Assets Portfolio Management

2. Table of Content
1. Introduction
1 4-5
1. Research
2 8 - 18
1. Framework
3 20 - 35
Pinto, Paulo 2

3. Table of Content
1. Introduction
1 4-5
1. Research
2 8 - 18
1. Framework
3 20 - 35
Pinto, Paulo 3

4. Introduction 1 1. Introduction
Purpose
• Studies that have examined consumers response to celebrity endorsements in advertising still suggest that this tool is extremely efficient for
influencing, at least one of the 3 levels of their relationship with the brand: Awareness(Mind), Connection (Heart) and Behavior (pocket). The
studies are conflicting in what is the impact level and whether if really impacts all the 3 but there seems to be no doubt that there is an
influence. As a validation of this belief is that companies are increasing their spending and plan to continue doing it.
• But, on the other hand, the cost of using this tool are extremelly high and the risks are undeniable.
• Therefore, it becomes crucial that organizations are able to manage their portfolio of sponsorship and to measure if they are being sucessfull
or not. In other words, organizations want to make smart decisions and need information to support them on that. This is what the paper
“Sports Assets Portfolio Management” i’ve presented intends to address. The following slide will provide na overview of what can be found in
that paper.
Motivations
My motivations in writing the mentioned paper are divided in 2 categories:
• Personal reasons: as it is a topic that i’m personally interested and Sports Marketing na area where i would like to work in the future
• Professional reasons: i’m currently attending to a part.time MBA and, for my evaluation, needed to write a paper about: Sports Issues,
Sponsorship and Sports Marketing. In parallel, i’ve got to learn that the organization i’m working for is looking into this topic and i wished to
contribute with some reasearch and suggestions
Objectives of the presentation
As the main paper is (around) 180 pages, this document only intends to capture and summarize the most important findings it. For the details, I
would suggest to revert back to the main document.
Pinto, Paulo 4

5. Introduction 1 1. Introduction
"Not everything that can be counted counts, and not everything that counts can be counted" Einstein
"Impossible is just a big word thrown around by small men who find it easier to live the world they’ve been
given than to explore the power they have to change it. Impossible is not a fact. It’s an opinion. Impossible
is not a declaration. It’s a dare. Impossible is potential. Impossible is temporary. Impossible is nothing."
Muhammad Ali and adidas impossible is nothing campaign
[Pinto, Pinto] p. 5

6. Complexity 1 1. Introduction
The topic is extremelly compex because there are many variables that need to be
considered and placed in the right perspective with the adequated weight. Also, the assets
are generally hard to predict as there return is dependent on persons and emotions.
adidas for example as different types of assets (figure 1), different brands (adidas, Reebok,
etc), different product types (fashion, performance, etc.) and, probably, different objectives
for each asset.
On top of this, its hard to split why consumers buy adidas products: Assets? Brand Image?
Oportunity? Product technology, style or quality? Probably a bit of all so there most be a
away to leverage the weight of it all.
Additionally, the assets also contribute to the overall value and image of the brand so it
needs to be accounted for. But, if the brand invests in one asset they loose their ability to Figure 1 – Key adidas assets *
invest in others (as there are limited amount of resources).
The organizations needs to be able, while considering different weights, to calculate: ROI,
ROB and ROO. In the paper i simply call ROSE to the variable – Return on Sponsorship
and Endorsment. The calculations is based on data which is also difficult to compile and
analyze.
* - The Figures Numbering reflect the one in the main paper and not, necessarily, the order in this presentation
Pinto, Paulo 6

7. Summary 1 1. Introduction
The Paper is divided into 2 main sections: Research and Framework Proposal
In the research part, which in the report can be found from page 15 till page 88, I:
• Give an overview why portfolio management is na important tool for acheiving the goals (pg 15) and why organizations use sponsorship (pg. 19). Here i also look into the risks of
using sponsorship as a marketing tool (pg.23)
• Based on reports and factual data, i do a deep dive into what are the trends in sponsorship. First finantial trends (pg 31) and after, trends regarding methods and approaches used to
evaluate and measure sucess of sponosrship (pg. 69)
• Compare, based on information available in wikipedia, how 3 top brands in sports goods industry (adidas, Nike and Puma) use sponsorship (pg. 39)
• Try to put a number that reflects the costs of sponsorship. this is a mix of factual data and assumptions. (pg 46)
• Use my personal network to understand what people think about the impact of sponsorship. This done in 2 perspectives: experts in the field adidas employees (pg. 55) and consumers
(pg. 75)
• Finalize the research chapter by looking into indicators – Marketing (pg. 78) and Finantial (pg. 84) - that are (or can be) used to valuate sports assets.
In the Framework part, wich can be found from page 89 till page 132, comes a mix of conclusion out of the research and my own view on the topic. My intention is to develop a model
(with process and tools ) that would enable organizations to efficiently manage their portfolio of assets. More concretly, I try to:
• Define the approach and objectives for portfolio management (pg. 89-92; 128-132)
• Define na asset lifecycle model and explain the linkage of it to the protfolio management (pg. 92-99)
• To define activation strategy concept and link it to the model (pg. 101-105)
• List the reasons why the organizations should manage their sports assets thoroughly (pg. 105-106)
• Define a asset valuation process as an crucial exercise for the portfolio management (pg107-117) and introduce a tool to support it – Asset Valuation Sheet (pg. 117-119).
• Define a model to measure and incorporate risks.(pg. 120-123)
• Define a potential organization setup (pg. 123-127) to support this model and i’ve looked into the costs that would be needed to start it (pg. 127)
7
Pinto, Paulo

8. Table of Content
1. Introduction
1 4-5
1. Research
2 8 - 18
1. Framework
3 20 - 35
Pinto, Paulo 8

9. Why using Sponsorship? 2 1. Research
Reasons for Sponsorship:
• Consumers will buy products endorsed by
celebrities more often than products that
Objectives of Sponsorship:
are not endorsed.
• To increase sales and profits
• Fans and businesses like to be identified
with a winning team or athlete. • To introduce a new product or service to a
large audience
• Young people, in particular, will copy their
role models and use the products they • To be identified with an event in which the
endorse. target market is interested
• viewers, listeners, and fans are less likely to • To earn the goodwill of the audience by
turn off a commercial featuring a celebrity showing a commitment to the community
than a commercial featuring a fictitious • To entertain clients, employees, or potential
character. customers
• Consumers tend to believe celebrities, • To enhance the company’s image
especially those who are chosen for their • To enter new markets or a niche market
good public image.
Figure 4 - Sports Consumption
Pinto, Paulo 9

10. Risks of Sponsorship 2 1. Research
Risks
Polarization: Ccelebrities are not necessarily seen by all the consumer
has having the same attributes or values. Often they can even be
opposite and that, of course, would have an impact on the consumer. Examples:
Asset What went wrong
Exclusivity: celebrity may agree to endorse multiple products. If an
Tiger Woods Sexual scandal
endorser is perceived to be accepting every endorsement opportunity
Michael Phelps Photo indulging on a bong hit
that comes along, consumers will be confused or begin doubting the
Martha Stewart Arrested for Inside Trading
endorser’s sincerity.
Charles Barkley Was pulled over for allegedly driving under the influence recently.
Costs: Its a very expensive marketing tool and involving long terms Making matters worse were reports that
contracts and , consequently, finantial comitment he allegedly told the police that he was on his way to a booty call.
Peyton Manning knee surgery
Image: risk of negative publicity if the endorser commits a crime or a AVP tour In March 2010, Nivea came on board as AVP’s title sponsor a tie had bo
serious social blunder in the future be ended half a year later when the series ceased operations due to
financial insolvency. The sponsorship investment was of 1 million USD.
Awareness: Having the right asset is not enough. Brands need to be Kobe Bryant accused of rape
able to tell the consume r that that concrete asset is representing the Table 1 - What can go wrong
brand. This requires a good activation strategy, investement and the
risks mentioned above sumup to this one as well(e.g. what if the asset
has a long term injurie?)
Pinto, Paulo 10

11. Financial Trends 2 1. Research
• The global sponsorship spending’s grown in 2010 5.2% worldwide and it’s expected that this growth rate is kept
in 2011 (figure 5)
• US ($13.6b) and Europe ($12.9b), in 2010, are the leading countries when it comes to spending in sponsorship
(figure 8)
• The most active categories in the sponsorship spending are: Automotive, Property/Casualty Insurance, financial
services, spirits, Green Energy and Apparel (figure 7)
• 78% of the companies will use the spending increase for new sponsorships instead of renewals (figure 10)
• 50% feel that ROI in sponosrship increased and 18% dont know. (figure 11)
• 84% of the companies increased their need to validate the results of sponsorship (figure 12)
• The top 3 of marketing communication channels used to leverage sponsor programs are Traditional advertising,
Public Relations and Internal Communications (figure 14)
• Most of the brands determine their sponsorship budget in the last quarter of the year (figure 17)
• Conclusion: Sponsorship is here to stay and stay stronger by increasing the spending in both rights fees and
activation. But there is a new player in the game which is the need to measure sucess and ROI.
Pinto, Paulo 11

12. Big 3 (adidas, Nike and Puma) Comparison* - General 2 1. Research
• Nike (with 1740) has the major number of assets followed by adidas (with 1407) and, from far way, Puma (with 386). Most of
the assets signed by the brands are athletes. (figure 18)
• USA (515) and UK (306) have the higher number of assets signed. (figure 19)
• 6 countries have more than 100 assets Argentina, Brazil, France, Italy, Germany, Spain (figure 19)
• Football(soccer) is by far the sport where more assets are being signed (figure 20)
• adidas and Nike have assets in, around, 20 different sports categories (figure 20)
• North America (NAM) is clearly dominated by Nike while Western Europe is by adidas. Is interesting to see that in CIS Nike as
more assets but adidas is, by far the market lead (especially in Russia…the bigger market) (figure 22)
• adidas leads (largely) in the number assets in tennis and rugby and Nike in Football and track and field. What becomes
interesting realize, Nike is known to have the best tennis players in the world (Nadal and Federer) and adidas has the best
football player of the world (Lionel Messi) so I could not stop to wonder whether the strategy of two companies is to invest in
the quantity when they do not have the quality (probably to increase their chances of having the next Nadal or Messi).
• What also jumps from Figure 20 is that in track and field Nike has 5 times more the number of assets than adidas. On top of
that, Puma has the stronger asset in the sport (Usain Bolt). Being track and field one of the areas of future growth of adidas and
knowing that the company strategy is by having aggressive approach to sponsorship I have to ask the questions: what will one do
when have neither the quality not the quantity? Will this mean that adidas will reallocate part of their budget to track and field
and, if so, what would it mean?
* - source: data was taken from Wikipedia and analyzed byPinto, Paulo
me
12

13. Big 3 (adidas, Nike and Puma) Comparison - Market Share 2 1. Research
Conclusions out of Figure 21 - Market Share
•In all the cases, the relationship between the number athletes signed and the number of clubs is the exact inverse so, if one brand
invested in a high number of clubs the other tends to balance the game by signing with players.
•With the exception of the UK, the brands that lead in the number of signed athletes have the highest market share (MS). In the
UK this could be related to the different countries that constitute it.
•There seems to be a relationship between sponsoring National teams and market share. The highest market share of Puma is in
Italy and where they sponsor the National team. If we compare with Germany (where they have their second highest market
share) they manage to have 5% more of market share with only 6 assets (27 less than Germany). also in Spain, adidas leads the
market share with less 4 assets and in Germany with less 25 assets (Nike plus Puma) but with the respective national teams. Is,
anyway, worth it to investigate this further.
•adidas has the higher market share in this countries (34,6% against the 28.6% of Nike) but it also leads in the number of assets
(260 against the 227 of Nike)
•For the 5 countries I’ve analyzed (Spain, France, UK, Germany and Italy), Decathlon – a brand with no investment in sports
assets sponsorship - comes is in the third position of the market share list (in front of Puma, Asics, Umbro and Reebok) with a
total 6.2% of market share.
•I’m not able to take a conclusion on if there is a correlation between the number of assets and the market share. The facts are that
where adidas has more assets is where their market share is bigger and where they have less (20) their market share is the
lower(Greater China). Also, 34% of the Nike revenue in 2010 was coming from North America which is 9% more than the
adidas-group this is also the market where Nike is the bigger investor in assets.(figures 22 and 23)
Pinto, Paulo 13

14. Big 3 (adidas, Nike and Puma) - Cost of Sponsorship 2 1. Research
• There is no clear information regarding what is the investement in rights fees as most of the organizations have that value merged with the
activation costs, etc…Marketing working budget
• Therefore, i’ve looked into different ways to get to a close enough value of how much is spent in rights fees: A) Based on the average US
spending, B) based on the 19% suggested by IEG and C) spending Ratio (Figure 24). Table 5 intends to capture those yet the last approach is
done that inspires me more confidence.
• Per year, these companies (Nike and adidas), spends around €600M in right fees. These are contractual and, therefore, committed costs for
many years. Also if we consider the operating margin of this 2 companies (where Nike is much more efficient) instead of the net sales, this
values are even more relevant.
• Using the same principle, Puma is spending around €200M in total (but it means that they, in average, spend 15% more per asset than the 2
“giants”)
• What seems clear is that, regardless the method, Nike seems to be doing a much better job in their spending: not only they have more assets
for the similar amount of spending as they sell more products and have a better operating margin (almost the double)
A) B) C)
Pinto, Paulo 14

15. (adidas) Experts View on Sponsorship 2 1. Research
• In order to better understand what experts think about sponsorship I’ve conducted and informal survey to some of the adidas employees. The target group were
peers in my network with different roles and responsibilities and in different locations and that, one way or the other were exposed to sponsorship.
• The participation was great: 65 answeres from peers with different levels of seniority and accross (almost) all the areas of the adidas.
• The key outcomes were:
• Sponsorship is responsible for 24% of the net sales. (figure 27)
• The large majority of the participants (62%) believe that sponsorship has a medium or high (positive) impact on the adidas success and only 15% of the
participants feel that sponsorship is not the reason why adidas is so successful. (table 6)
• The top 3 areas where sponsorship influences are: 1)Emotional bound with consumers 2) direct sales and 3) Brand Awarness
Pinto, Paulo 15

16. Sponsorship Trends 2 1. Research
• Sponsors are more interested in measuring the sucess of sponsorship (figure 12)
• Assets start seeing the value to colaborate with sponsors in doing so
• Several sponsors are using fulfillment reports as a way of measuring the ROI/O of sponsorship for both events and teams.
• Coca Cola wants to build emotional and enduring relationships and they use sponsorship to act in the consumers passions.
• Since 2004, they have a Marketing Fusion strategy which in few words means replacing the brand for the consumer in center of the
strategy. (not painting the world in red but choose were to interact with the consumer)
• Brands (Anheuser-Busch InBev) are moving from:
• Non-Activated assets to Activated assets
• From Horizontal to Vertical ownership. In other words, moving from owning every right related to the asset (Stadium naming plus
broadcast ad packages plus signage plus …) to a point where they just own what is more effective.
• Long term to short term contracts. They are aiming for 2/3 years deals.
• Local deals to Global reach but with local relevancy.
• Multi to Single (focus) brand assets.
• Logo, Hospitality, presence to Brand Engagement
• Borrow to create asset equity.
• Being everywhere to be selective
• Exclusivity to shared
[Pinto, Pinto] p. 16

17. Sponsorship Trends 2 1. Research
• The priorities of today’s sponsorship executives are to:
• Establish a better measurement methods and accountability
• Deepen engagement through immersion and participation
• Incorporate digital/social media as critical activation tool
• Create unique events/platforms/inventory to add value
• Align sport and event ties with socially responsible initiatives.
• Executives considered as extremely or very important being able to justify the sponsorship results to senior personal, departments that funded the
sponsorship activity and the areas impacted by it. (figure 30)
• Ironically, only 14% and 18% of them are satisfied with the way they currently measure ROI and ROO, respectively. This together with what we
have learned in the research - trends chapter (Figure 11) leads me to conclude that, although marketers are able to measure and evaluate
sponsorship they do not fully trust the methods they are using. (Figure 31)
• 60% consider that the collaboration of the sponsored asset in the measurement process is either very or extremely important. (Figure 32)
• 44% of the executives admitted using only 1% or less of the total budget for post event evaluation
• Most of the sponsors use sponosrship as a mean to: 1) create awareness; 2) Increase brand loyalty and 3) Change/Reinforce image (figure 16)
[Pinto, Pinto] p. 17

18. Consumers View on Sponsorship 2 1. Research
• In order to better understand what consumers think about sponsorship I’ve conducted and informal survey to 155 members of my Facebook
network
• The key outcomes were:
• They believed that sponsorship is only influencing their buying behavior in 5% (figure 38)
• Consumers believe that product attributes have a higher impact on their buying decision than the adidas experts (figure 39)
• There is no consistency between the opinions of the experts and the ones from the consumers.
[Pinto, Pinto] p. 18

19. Metrics 2 1. Research
The table bellow reflect the metrics I've capture – and I've considered Figure 34 and Table 7 reflect the results of surveys to executives of
relevant - in the course of my research. The details behind each can be companies that use sponsorship as a marketing tool
found in the main paper.
Marketing Indicators Financial Indicators
Social media listening Internal Value Index
Market share Stocks Variance
Brand Image Net Present Value
Store Traffic Expected Commercial Value
Employee Communication Scoring Model
Develop co-branded merchandise Break Even Analysis/Payback year
Media value Marketing working budget
Tailored surveys of hospitality guests Customer Segmentation
Develop green marketing platforms Sales (of course!!)
Conclusion: There are several metrics that can be used to measure the success of sponsorship. The key is to select the most adequate one, be able to
translated it to a quantifiable value and be consistent with is usage.
[Pinto, Pinto] p. 19

20. Table of Content
1. Introduction
1 4-5
1. Research
2 8 - 18
1. Framework
3 20 - 35
Pinto, Paulo 20

21. The Benefits of Portfolio Management and Asset Valuation 3 1. Framework
• Enables taking the most value out of asset during the full duration of the contract
• Alerts for unsuccessful activation strategies enabling the development of pro-active counter measures
• Provides insight on the lifecycle changes of the asset enabling that adjustments to the asset activation are made increasing the probability of a
higher ROSE
• Tool that provide the organization with the real time and complete view of all the assets enabling leverage actions in order to keep the portfolio
balanced
• Enables scenario planning enabling the reduction of missing opportunities or overrun the available resources
• Provides a knowledge database of historical data which opens unquantifiable doors of opportunities for learning about assets and consumers –
Game Changer
• Reduces de risk of trial and errors exercises
• Helps justifying the investment to board members, shareholders and complete organization
• Tool that helps reducing costs by adjusting the contracts to the assets lifecycle and ROSE (e.g.: higher royalties and less fixed fees)
• Gives information head start to negotiate fees and contracts with assets as the organization become able to defining – more accurate – what is
the break point of the negotiation with assets
• Increases the probability of selecting the right activation strategy and, if that still doesn’t happen, it increases the probability of realizing it soon
enough to react
[Pinto, Pinto] p. 21

22. Striking the Right Balance 3 1. Framework
Subjective decision (with high risk of being influenced
by personal prefences) which leads to unclear returns
High
Ideal combination of Intution and facts that would
decrease the risk probability
Sports Marketing
Experts Judgement &
Risk taking
Burdensome process that limits the usage
of existing expertise leading to miss
oportunities
Low
Analytics, facts, processes High
Source: Lightweight Portfolio Stewardship. CIO executive Board. 2008. pg 3
Pinto, Paulo 22

23. Portfolio Management Process 3 1. Framework
Note: Some steps of the process happen in a regular basis but, some others,
eventually, just once every 5 years (e.g.: SBP)
[Pinto, Pinto] p. 23

24. Portfolio Management Process 3 1. Framework
1. The process starts with the strategic plan of the company. In the adidas
case is the route 2015.
2. Based on that, the strategic Sports Marketing, defines the portfolio
segments and their profiles. Each Asset needs to fit in, at least one of
the segments. (table 8 offers a proposal for adidas portfolio segments).
For example, adidas will focus in Russia, China and US and, therefore,
this sub-segments will have a higher weight than Germany and Portugal
ones
3. Also, its important to acknowledge that the assets change in the lifecycle
and dependent on where they are there value is different. In the next
slide I propose a lifecycle. Each asset needs to be placed in their right
lifecycle position based on:
• Focus: Depending on the markets the asset is assigned to (eventually
population exposure and not number of countries) they will get a
score for the matrix.
• Potential: this where the expert opinion should come to play. The
potential evaluation is a risk taking activity and should be seen and
lived as such.
• Performance: The combination of scouting information(skills, salary,
transfer value, etc), known facts (goals scored, international caps, age,
average number of attendance, awards, etc) and image scoring (e.g.:
social media) will give the matrix position of each asset in this
category
[Pinto, Pinto] p. 24

25. Portfolio Management Process – Asset Lifecycle 3 1. Framework
Assets that one doesn’t necessarily know where they
Are assets that typical were key assets will fit. They are typically young assets with the Are the ones each brand
in the past but that are in the end of
their career. Still they carry the image
potential – Image and/or performance – to become wants to have but they
everything or they are older assets that once had the typically are very expensive.
of the brand and they carry the image
potential and everyone is still expecting them to These are the Messi’s,
of what they were in the past. In the
Cristiano Ronaldo’s,
adidas world assets like Beckham, “explode”.
Manchester United’s and
Zidane, Stan Smith, Beckenbauer are
Real Madrid’s of this world
good examples of such an asset
These assets are the ones relevant
Are all the assets the company for a concrete country. It might
should get rid of: be that this asset represents some
• Missed to deliver ROSE values that the society respects and
• High Risk admires. Those are has important
• High Spending as the Key players and, in many
• Mismatch to brand strategy cases, because they manage to
and/or values reach out to people emotions more
• End of career strongly. They have high
• Exceed in the current lifecycle probability to become global
position players but don’t have to.
[Pinto, Pinto] p. 25

26. Portfolio Management Process 3 1. Framework
• In these first 3 steps of the process the brand aligned the strategic plan with the sports asset portfolio (defining the respective heights for each sub-
level) and updated the profile of each asset (if necessary)
• With this set of information is possible to do a first analysis of the portfolio and make sure that the portfolio is balanced.. Because there are
contractual limitations it only makes sense to act in assets which the contract expire in 3 years or less.
• Figure 46 offers a visualization of the process. The asset owner will then flag each asset for a concrete action – step 4: renew contract, change
lifecycle position, cancel, renegotiate, etc
[Pinto, Pinto] p. 26

27. Portfolio Management Process 3 1. Framework
• An additional note to the process step 3 is that, so far, I’ve only described how the asset owner places the asset in the lifecycle matrix but not
how the profile is update/reviewed. For this, there is another process I purpose and will describe further in this presentation – Asset Valuation
Sheet. Assets valuation is a major and complex topic and, therefore, requires a more detailed explanation
• The step 5, Approval, is only necessary if the asset owner wish's to cross the boundaries of his/her’s autonomy. Each asset is flagged and the flag
is linked to a range of actions pre-set by the strategic team (e.g.: countries where can be activated, max amount spend in activation, renew/not
renew contract, etc). If the asset owner wishes to extend the range then also here this should have to be approved by the strategic team. They
should be open for that but the range of options are there for a reason and should offer enough possibilities so that there is no need to extend
• The review/update profile step in the process – step 6, figure 51 – happens, to new assets that were added to the portfolio and only a business
case was provided. At this point their profile needs to be developed further. In this step benchmark with similar assets existing in the brand
portfolio could be useful for exercise.
• So far the process focus was in leveraging the portfolio in the strategic and lifecycle levels. Now, it comes the steps addressing the definition and
execution of the strategy.
• The next 2 steps of the process – activation strategy – are explained in the next slide. The only different in then is in the time when its done.
The point is that the asset owner needs to first plan what is the strategy for the asset (step 7) and then, by the end of the year, needs to check if
it was successful and plan the year after. This would also help understand how accurate is the asset owner/team
• The last step of the process is to continuous monitor the development of the assets and to improve the process managing and evaluation them.
[Pinto, Pinto] p. 27

28. Portfolio Management Process – Activation Strategy (step 7) 3 1. Framework
Activation strategy is the process of applying certain filters so that a
consistent connection between the asset, the brand values and strategy, As part of the Activation strategy there are 3concepts
the products and the consumers is created. that I recommend to use as tools to help closing the
There are two groups of filters: loop into the optimization of the investments:
1. Strategic targets (the portfolio segments) – this one contains several
sub-filters till it gets to the lowest level of detail • Cross-Activation: Activate assets not only to reach
2. Product Targets: the assets need to be representing products that consumers but also: employees, shareholders,
symbolize a certain characteristic (adidas example): investors, customers. Etc
• Faster
• Stronger • Overlap Principle: With the consumer in the
• Smarter center and for each target group till the lowest
• Cooler level of granularity there must be 3 or 4 assets
that can be activated (e.g.: Country, Genre and
• Natural
Age). Doesn’t mean that it’s a local asset but it
The activation strategy needs to be linked to the objectives and needs to means that we should be able to re-use assets to
be concrete both in expected result and time: compensate each other.
• Measure the activation against the benchmark
• Track, real-time, the activation outcomes • Trial & Error: go against the (marketing) odds
• Revise the activation strategy and, if necessary, move the asset in and try new activation approaches.
the lifecycle position so that a new and more suitable activation
“package” is made available
[Pinto, Pinto] p. 28

29. Asset Valuation Process – The Value of Sponsorship 3 1. Framework
• As mentioned before, the asset valuation process is a very important piece in the portfolio management one…its probably the most complex piece
of it.
• Before the valuation process starts, the company needs to define what was the value of sponsorship for the past year:
• The key point of the process I propose is that every asset should be tied back to a quantitative measurement. Its difficult but needs to be done.
Will need to be a mix of fact based with expertise (gut feeling). The fact based bit will become stronger as more quality historical data is
available.
• At the end of the year, the sales, finance and sports marketing teams (responsible for each portfolio segment level) will seat together to define
how much sponsorship (in %) contributed for the net the sales of that year
• The asset owner manager will present a recommendation and reasoning for it and at the end of the meeting there must be a decision on
whether the contribution of sponsorship increased, decreased or stayed the same and in what amount. (take figure 48 as an example)
• The same exercise should be done for each segment of the portfolio (sports style, fashion, etc)
• Some of the facts that should be used are, for example:
• Sales development comparison before, during and after the activation. For example: If the increase of the during or after is lower
than the same period in the year before (not month but activation period) and/or had a non-relevant increase when compared
before with the then that should give a direction by itself;
• Comparison of the development of other countries where the asset was activated in a similar way;
• Market research’s
• Social media specific searches (asset image can be “easily” tracked”)
• All of that information is captured from all the different sources, calculated based on the metrics and refined by the expert views (and internal
benchmark comparison)
[Pinto, Pinto] p. 29

30. Asset Valuation Process – The 5 (+1) Steps 3 1. Framework
• First time assets (only Business Case information)
• Focus on: Risk, Portfolio segments and expected ROSE
• Asset Owner defines error margin in the profile definition
• Mapping between the asset and the strategy which, ultimately, defines in detail where the
asset will be positioned in the portfolio segment
• All the objectives must be detailed (portfolio segments) , measurable and need to have a
weight
• Figure 48 as an example
• Objectives: Input for the approval process; Portfolio positioning; Baseline for asset • Define objectives or similar assets that the asset will be compared
measurement. against in the future
• Objective: Evaluate and predict ROSE development
• For each activation there must be, at least, one concrete and measurable outcome
• Examples: Value of the ability to increase prices; New Channel, customer, segment, or
division (vs. the value of those); Value of the decrease on Cost of sales and Cost of Data
(vs. Data provided by the asset); Product development costs (vs. asset
contribution/testing, etc); Value of additional effective sales or profits (again here
benchmarks are important to measure the increase); Retention rates increase (vs. cost of • Asset Valuation Sheet (explained further ahead)
employee fluctuation); Store traffic and conversion increases (vs. the value of those);
• This a governance step which enable to have data quality for decision
Increase sales in pre-order period (vs. savings in Operational costs)
making and pro-active measures for asset profile changes(activation
measures)
[Pinto, Pinto] p. 30

31. Asset Valuation Process – Example (figure 48) 3 1. Framework
[Pinto, Pinto] p. 31

32. Asset Valuation Process – The Asset Valuation Sheet 3 1. Framework
• The Asset valuation sheet is a tool that acts as a repository and analysis of relevant information for each asset and it’s the final piece that was
missing in the portfolio management framework I propose.
• It’s what the asset owners and strategic teams look when they drill down to the details of the assets and it can be used to compare assets with each
other for decision making.
• Besides all the personal and financial information (Sum of ROSE), the valuation sheet would consider each of the following indicators:
• Performance indicator: Measure the efficiency of the asset on-field. (e.g.: goals, yellow cards, etc)
• Skills indicator: Taken out of scouting databases, for example. (eg.: dribbling, speed, etc)
• Social Media indicator: looks into the asset participation and reach that would bring along
• Image indicator: looks into what kind of values and perception consumers have from the asset
• Positioning indicators: Shows the overlapping assets
• Risk indicator: There are 3 areas of risk that need to be considered - Risk on Image (e.g.: Multi-sponsors not aligned), Performance (e.g.
Injuries) and Opportunity (e.g.: contract duration). Figure 49 offers a tool to manage and leverage the risks.
• Some of the indicators are easier to reach than others but the overall value of the asset might change depending on the segment the asset is being
compared with
[Pinto, Pinto] p. 32

33. Asset Valuation Sheet – Risk Portfolio 3 1. Framework
• This “risk portfolio management” would enable the strategic team to better understand how exposed is the brand to assets risk which would
enable them to identify areas to act. (e.g.: offer community managers to all their assets for free, financial consulting, sports health specialist
check-ups, career advisors, etc) Would also support in deciding which action flags (and lifecycle) should be given to the assets.
[Pinto, Pinto] p. 33

34. Portfolio Management Framework 3 1. Framework
Portfolio Management -FC Accuracy
-Real Value
(Budget
improvements)
- Internal
Benchmark
(value index per
1 2 3 asset – regardless
Demand Management Governance & Monitoring Post Mortem but proporcional of
the division/brand or
market)
Based on the lessons learned (stream 3), market knowledge In this stream the main outcome is to make sure that all This stream will focus on understanding how good
Summary
and on monitoring exercises (Stream 2) take educated the relevant information is being captured, validated and forecasters we are and identify opportunities for
decisions on the next endorsements to be signed: not only reported in order to: feed the information needs of stream improvement. Will also feed into stream 1 as an input for
their value but also duration 1, enable stream 3 and ensure portfolio transparency decision making
• Maximize Value • Data Collection, analysis and report
Objectives
• Seek Balance (duration, costs, types, etc) • KPI’s Tracking • Understand our capability of choosing assets
• Create common understanding of what is the expected • Full portfolio Transparency • Create a Knowledge base for future decision making
ROSE of the asset • Contracts monitoring (reduction clauses triggers, • Identify trends and opportunities in assets
• Scenario Playing expiration dates, etc)
• Contract Management • Portfolio Management Tool with Relationship • Contract Management
• Quantitative, Qualitative and P&L Management feature • KPI’s – Stream 2
Tools
• Stream 2 Portfolio report • Bubble Charts • BI Interface
• Stream 3 lessons learned conclusions and, consequent, • Customized reports • Analysis report per asset
assumptions • BI interface: Net Sales, CoS; MWB Sponsor (Retainer, • Consumer Insight Information/KPI’s: Brand Power,
• Asset NPV, ECV and Scoring Models Promo Products, …) MWB - Activation Brand Attribution, ….
Before During After
Pinto, Paulo 34

35. Portfolio Management Framework – Demand Management 3 1. Framework
*Portfolio Management – Demand Management (Stream 1)
A Maximize Value B Seek Balance C Strategically Aligned D Pick Right Amount
Select new endorsements to maximize the sum of the Achieve the desired balance of endorsements in terms The endorsements investments mirror the strategic There are too many assets we would like to hire but
values of all active endorsements in the pipeline. of a number of parameters: i.e. Brand image priorities (i.e.: route 2015) the budget is not unlimited. Thus is crucial to create a
Goal
(federations); timelines (i.e.: Mature athletes vs balance between resources already allocated (contracts)
Consider the terms of the Business objective Rookies); Time (Long term vs short term contracts) and resource available (i.e.: “new Messi” )
Objective is to visualize the portfolio
Net Present Value: determine NPV and divide by the Bubble Charts: display endorsements in a 2- Top-down, Strategic buckets: Create budget buckets Resource Limits: Value maximization methods (goal 1)
key/constraint resource (i.e.: Sports Marketing Budget). dimensional view where the NPV is reflected in the according to the strategy guidelines and rank each build in a resource limitation – adding a new
Endorsements will then be ranked according to this size of the bubble. endorsement and allocate it to and individual bucket endorsement means that we need to cancel with other
index till we run out of the resource. (i.e.: Brand Image; Sales; Market penetration, Fashion, (s) of equal values
Expected Commercial Value: Decision tree analysis Pie Charts: display spending breakdowns as slices of performance) till you run out. Result is multiple Resource Capacity Analysis: Linked to resource
based on the stages of the endorsement (i.e: star, solid, pies in a pie chart portfolios reflecting the business goals. management and project work and, therefore not
rookie). Define possible commercial outcomes along Top-Down, endorsement roadmap: Linked to applicable for this analysis.
Methods
with the probabilities of each occurring. The EVC innovation – does not apply to endorsements
result is then divided by key/constraint resource… Bottom-up: ”make good decisions on individual
Scoring Model: Decision Makers (ie: sports Marketing) projects, and the portfolio will take care of itself”
rate the endorsements based on pre-defined factors
that define a perfect endorsement. They are then
ranked
Source: A & C Black. “Business the Ultimate Resource”, 2nd ed. 365-366. London, 2006. printed.
35
Pinto, Paulo
* adapted from New-Product Portfolio Management – still needs validation on whether it fits endorsements