Question :

You are the organizer of IRONMAN 70.3 SUPERFROG, at Imperial Beach, California (US), and you have just met the marketing director of Cervelo, a well-known company producing and selling race bikes specifically for the sport of triathlon. Cervelo would like to be the main sponsor of the IRONMAN 70.3 SUPERFROG, as it is probably the most famous Triathlon in the US and it will be broadcasted internationally. Thousands of fans will be at Imperial Beach as well (1.3 points).

Although, it is crucial to reckon the potential Return on Sponsoring for Cervelo. Therefore, you have done some number crunching. Here below the data you estimated:

1. Investment to be Main Sponsor of IRONMAN 70.3 SUPERFROG: 2 mio/$

2. Costs related to the Activation of Sponsorship: 0,25 mio/$

3. Value of Net Contacts potentially deriving from media (print, online, radio, etc.): 30 mio/$

4. Value of Net Contacs potentially deriving from field (fans, amateurs): 2 mio/$

5. Total Gross Value of Net contacts (media + field): 32 mio/$.

6. Expected outcomes (new clients, new business) for CERVELO, potentially deriving from activation of sponsorship at IRONMAN 70.3 SUPERFROG: 0,3 mio/$

Please calculate the R.O.S. (Return on Sponsorship) for CERVELO. Do not forget to discount Total Gross Value of Net Contacts in point (5) by a proper Discount Factor (80 to 90%).