Sponsorship: Creating meanings

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Sponsorship Creating meanings delivering
value

• Professor Pascale G. Quester

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Overview

• An historical perspective on sponsorship
• The effects of sponsorship from the consumer side
• Different models of persuasion apply
• The need for a measure of sponsorship congruence
• The purpose of sponsorship from the management
  side
• Objectives, relationship marketing and evaluation
  issues
• Sponsorship as a marketing relationship or a
  co-branding alliance
• Guidelines for sponsorship that works
• Can the higher education sector benefit from
  industry sponsorship? Can Industry also benefit
  from sponsoring higher education?

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An historical perspective on sponsorship

• Sponsorship is as old as ancient Rome where it
  already involved the financial support of sports
  and/or arts for the purpose of gaining public
  support (and election to key offices by the
  grateful crowds)
• Philanthropy and sponsorship have long been
  understood as being one and the same
  (patronage/parrainat/sponsoring in French). The
  difference is one of intent, not of form.
• The emergence of modern commercial sponsorship,
  however, is relatively recent (as evidenced by
  the creation only 15 years ago, of a special
  chapter of the American Marketing Association,
  and the publication of special issues of top
  journals).

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Commercial sponsorship

• Commercial sponsorship can be defined as an
  investment in cash or kind in an event, sport,
  person or idea, in exchange for access to the
  commercial exploitation of that event, sport,
  person or idea.
• Why has sponsorship grown so much since the mid
  70s?
• Tobacco and liquor advertising bans in many
  countries have dictated a redirection of
  promotional budgets to substitute outlets.
• Increase in consumer leisure time and spectator
  sports
• Increase in the commercialisation of sports,
  requiring more funding
• Decreasing public funding of sports and arts
  organisations
• Increase in advertising clutter and the so called
  Death of advertising
• Emerging Corporate Social Responsibility concerns
  

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Commercial sponsorship

• How big is it today?
• Latest figures show that in 2008, the year of the
  Beijing Olympics, US 43.5 billion will be
  invested worldwide in sponsorship (rights only
  and does not include leveraging costs), up 14.8
  over 2007.
• Asia Pacific is growing faster (25) but from a
  lower base, and expected to reach US9.5 billion
  in 2008.
• How far does it reach?
• A truly global reach, including India, Pakistan,
  South America
• From community-based grass root program to major
  strategic global positioning instrument (Coca
  Cola and Soccer)
• What are its different current forms?
• Sports (single event, teams, athletes,
  competitions) dominate (70)
• Arts (single event, companies, programs) (3)
• Social/Cause-based (also known as cause-related
  marketing) (9)
• Television broadcast sponsorship blurs the
  boundaries with advertising

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The effects of sponsorship from the consumer
behaviour perspective

• Awareness was the first measure of effectiveness
  used in research (measured with recall or
  recognition scores)
• Early research aimed at determining whether
  consumers remembered or recognised sponsors (some
  research is still looking at this)
• More recently, attitudes towards the sponsor or
  even intentions to purchase (including shares as
  opposed to products) have been examined.
• To this day, however, there has not been a
  definitive study linking behaviour (sales) to
  sponsorship effects.

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Findings from the consumer research on
sponsorship

• Awareness, measured as recognition and/or recall
  is generally highly inaccurate (eg. Grand Prix
  study or Sydney survey)
• Attitude change is often determined by additional
  promotional support (eg. Festival of the Arts
  study), which involve additional investment by
  sponsors.
• Awareness and Attitude change appear to be
  influenced by other factors than sponsorship per
  se
• Market prominence (market leaders always win)
• Media exposure (other than sponsorship messages)
• Product category congruence or relatedness
  (related product categories win)

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Findings from the consumer research on sponsorship

• Why do consumers get it wrong?
• Heuristics are used for recall (incidental
  ambush) eg. SGIC
• Associative learning (Classical conditioning)
  introduces a time lag, such that past sponsors
  continue to be perceived as official sponsors
  long after they stop (eg. Fosters for the
  Australian Grand Prix)
• Cognitive consistency/balance theory leads
  consumers to link events/sports they like to
  brands they like (and more people like and buy
  brands with higher market shares)
• The path to persuasion for sponsorship is more
  emotional/affective than cognitive
• What does it say about sponsorship effects?
• A lot of the sponsorship investment may be
  wasted!

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Two paths to marketing persuasion
Message
Peripheral or affective path (based on
advertising messages or emotive association)
Attribute evaluation Information processing
central or cognitive path (based on relatedness
and logical deduction)
Consumers attitudes
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An example of consumer study Sydney 2000 In the
case of related brands
Purchase intentions
Attitude towards product
Congruency
Relatedness
Behaviour
History
Consumer product category involvement
This model fits for Nike (sponsor in 2000) but
also for Adidas (non-sponsor in 2000)
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In the case of non related brands
Purchase Intentions
Brand attitude
Ad intensity
TV exposure
Behaviour
Brand Exposure
Consumer product category involvement
This model fits for Panasonic, Visa and Westpac
(sponsors in 2000) but also for Tooheys (not a
sponsor)
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Consumer findings

• For some brands, there are simply no significant
  effects in terms of consumer response (eg. Coca
  Cola, Fosters).
• Therefore, a lot of investment in sponsorship is
  wasted (perhaps even more than the 50 famously
  estimated by Ogilvy in the case of advertising).
• Unless there is congruence and good preliminary
  research, the choice of a sponsorship may be a
  BIG gamble.
• This highlights the importance of evaluation and
  measurements of results and calls for a measure
  of congruence.
• Despite statements to the contrary in the
  literature, sponsorship does appear to work best
  (and selectively, from a sponsors perspective)
  as advertising, given that congruence can be
  claimed equally by ambushing brands.
• However, it is a specific type of advertising,
  with no scripted message and an intense emotional
  component.
• Media support of the sponsorship tends to be
  critical for success.
• These findings should warn smaller firms and
  non-market leaders against rushing to sponsorship
  as a panacea for their marketing problems

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Sponsorship congruence

• Described in the literature under several names
  (fit, relatedness), it is recognised as an
  essential factor determining the effectiveness of
  sponsorship
• Only consumer perceived congruence matters.
  Objective congruence is not so important.
• Two dimensions contribute to perceived
  congruence
• Whether the association is expected or surprising
  (history may contribute to making an association
  expected, even if it is irrelevant eg. Coca Cola
  and the Olympics)
• Whether the association is relevant or meaningful
  (the product category of the brand tends to
  determines this logical link between event and
  brand, eg. a brand of engine oil sponsoring the
  Australian Formula 1 GP)
• We have now developed a measure for it and tested
  its validity across cultural contexts (France and
  Australia).

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The emotional power of sponsorship

• Despite recognition of the emotional content of
  the sponsorship message, past studies have
  focused on consumers cognitive interpretation
• Memory, attitudes, beliefs or even purchase
  intentions are all cognitive constructs
• Much work remains in the area of emotional
  responses and the likely impact of consumers.
• Does a consumer who feels good about an event
  also feel good about the brand?
• What is the consequences of losing a game,
  given the negative emotions this may induce in
  consumers?
• Do emotions work implicitly or explicitly? Do
  they interact with cognitive responses?

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The impact of ambush marketing

• A direct consequence of the success of marketing,
  Ambush Marketing involves non sponsors aiming to
  gain similar benefits as sponsors by seeking to
  misrepresent their role in consumers minds.
• Advertising around the event
• Using sport or art related themes in their
  marketing communications
• Using indirect means to claim official status (eg
  Qantas during the 2000 Sydney Olympics)
• Some consumers may penalise ambushers, but many
  do not care.
• Increased legal protection around sponsorship
  agreements but the best defence is a good
  understanding of how to manage sponsorships
  strategically, yet there is much less research on
  this aspect of sponsorship...

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The purpose of sponsorship from the management
side

• A limited amount of research has been conducted
  on the management aspects of sponsorship.
• Objectives, purposes and aims
• Level of decision-making
• The relationship between sponsors and their
  properties
• Implementation and evaluation issues
• Only few studies have looked at the potential of
  sponsorships to serve as platforms for long terms
  strategic relationships or alliances.
• Increased concerns about Return-on-Investment as
  sponsorship costs escalate.

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Findings from research on sponsorship management

• A wide variety of objectives, often combinedbut
  not always legitimate
• Awareness, image building, sales, staff morale,
  hospitality opportunities, or ....
  self-actualisation of the CEO!
• An increasing level of strategic thinking
• Comparative research shows this is more so in
  Australia than in the US
• Leading to the concept of sponsorship-linked
  marketing (Cornwell, 1995)
• But a paucity of rigorous evaluation
• Large investments are backed up by confidential
  assessment, if any!

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Findings from research on sponsorship management

• Relationship Marketing is a theoretical framework
  developed in the B2B context.
• It advocates that relationships must be managed
  as a mutually beneficial dyadic process or they
  will fail.
• Research examining the sponsor/property
  relationship show that Trust and Commitment are
  both important predictors of renewal.
• At the same time, economic and non-economic
  satisfaction are not!
• Many sponsorship agreements are not renewed or
  are renewed without adequate evaluation.

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An example of management study the AFL
Market Orientation (sponsor)
Commitment (leverage)
Renewal (by sponsor)
Economic Satisfaction
Non Economic Satisfaction
Trust
Market Orientation (property)
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Case study Credit Lyonnais and the Tour de
France

• Over 100 years of history for this event and over
  50 years partnership between Credit Lyonnais and
  the Tour.
• The initial strategic aim was to position the
  bank as popular in the 1950s (a consumer related
  objective)
• An outstanding capacity to leverage the
  sponsorship into the business
• The yellow jersey matches the banks livery
• The tour visits many small cities where LCL
  branches are located each year
• Local branch managers can invite and reward staff
  and key clients (HR and relationship building
  objectives) to follow in dedicated cars or at the
  branch on arrival of the daily leg.
• The Tour is an opportunity for staff involvement
  and volunteering and induces great loyalty
  (internal marketing benefit)
• The drug scandals and the banks predicament
  Stay or go?
• The future generation and LCLs choice of Judo.

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Guidelines for sponsors

• What should sponsors do?
• Define clear objectives for their sponsorship
• Resist plunging into it simply because it is the
  done thing or we should get into it before the
  competition does
• Select a sponsorship carefully and strategically,
  with due consideration for congruence, market
  position and competition.
• Evaluate the results and build long term
  relationships with properties, with the aim of
  creating mutual value in the process (in what
  becomes a marriage of their brands).

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Guidelines for properties

• Important to define a value proposition, from the
  sponsors perspective.
• Do the homework to identify potential sponsors
  The most obvious sponsor may not be the best.
• Invest part of the sponsorship money to ensure
  that it is evaluated, leveraged and extended for
  the benefit of both partners.
• Be prepared to learn as much about the sponsors
  consumers as you would do about your own.
• Explore the opportunities for co-branding and
  strategic alliances.
• Adapt and respond to issues as they arise and
  dont run from sponsor to sponsor.

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The future of sponsorship

• Sponsorship is both an antecedent and an outcome
  of globalisation/cultural homogenisation
• A non-verbal/ emotion based means of
  communication, so easier to standardise than
  traditional advertising.
• Global sponsors are not resented, even by
  ethnocentric consumers (eg. Salt Lake city
  study), as global advertisers can be, so the
  emergence of a global consumer segment augurs
  well for sponsorship.
• A strategic rather than tactical tool
• Can be used as the foundation for positioning
  brands, for building their relevance to local or
  international markets or for establishing a
  differentiation with competitors.
• A possible basis for competitive advantage by the
  signing of exclusive rights and the
  implementation of elaborate (and expensive) long
  term leveraging programs.
• A key resource and valuable asset of the firm
  which can be used to achieve other desirable
  alliances with partners seeking to align with the
  same or compatible values.

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The future of sponsorship

• Some issues may limit the growth of sponsorship
• realisation by companies/managers that it does
  not answer all problems and that it takes a lot
  of effort and energy.
• increasing sponsorship clutter and overlap to
  match the current advertising clutter-- the
  initial incentive for sponsorship.
• increased confusion and legal complexities
  involved in contracts, especially in relation to
  ambush marketing (eg new rules of IOC stipulates
  that unintentional ambush will be punished but
  when it is incidental, due to consumer use of
  heuristics , how can it be so?).
• lower potential returns are likely as the best
  (ie most visible and market orientated)
  properties raise their sponsorship fees.

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Could the higher education sector and industry
benefit from sponsorship?

• Whereas companies or business people used to
  think about making philanthropic donations to
  universities or higher education providers, their
  shareholders are now holding them responsible and
  accountable for every dollar invested.
• Commercial sponsorship is one way by which
  industry can continue (or start) to give funds to
  university, provided they can identify clear
  objectives and evaluate the performance of the
  investment.
• Corporate Social Responsibility is an
  increasingly desirable attribute expected (and
  rewarded) by consumers and shareholders from
  industry.
• An association with education and with the
  support of innovation and knowledge can
  contribute usefully to higher CSR ratings.

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Could the higher education sector and industry
benefit from sponsorship?

• For the higher education partner
• Important to recognise the commercial intent and
  to provide commensurate value.
• Important to speak the language of business and
  give multiple opportunities for returns (media
  releases, regular meetings, access to the
  researchers, or to the scholarship students).
• Must genuinely value the industry partners
  contribution.
• For the industry partner
• Essential to find some congruence in what is
  sponsored but also to recognise the intrinsic
  value of knowledge and research and not be too
  directive about what is an appropriate research
  topic or course assessment.
• Important to comply with the rules of equity and
  fairness (in the selection of scholarship
  students, or of the research grants).
• Expect returns which are commensurate with the
  investment (this is not about maximising return
  and using a scholarship student as free labour!)

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Examples of value laden sponsorships between
industry universities

• A soft drink manufacturer sponsoring orientation
  week (small one off investment but repeated over
  the years) or a Chair in International Business
  (large commitment over 5 years, with naming
  rights).
• An airline sponsoring a study abroad initiative
  with free or discounted airline tickets or
  funding an International Visiting Scholar
  program.
• A car manufacturer sponsoring field trips by
  biology students, or a building supply company
  sponsoring field trips for architecture students.
• A computer software company sponsoring a Chair in
  a computer science department, or several
  scholarships for deserving research students, or
  research grants in the area.
• A bank sponsoring a Chair in Finance, or a PhD
  scholarship in the area.
• In all of these cases, a strategy must underpin
  it and clear objectives can be set, and
  evaluated, to ensure that value has been
  delivered on both sides.

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Thank you!