Does sponsorship actually work? Driving up likeability through association

Does the passion and commitment that fans feel for their favourite sports and events carry across to the sponsors who often help make such events financially feasible?

Previously I’ve examined how advertisers have woven their participation into the very fabric of Superbowl Sunday and contrasted the sentiments that such engagement enjoys with other sponsorship arrangements where brands are much more sidelined. I’ve also looked at Dow’s involvement with the upcoming London Olympics.

Now Kirk Wakefield, Professor of Retail Marketing at Baylor University in Texas and Anne Rivers, Senior Vice President at Brand Asset Consulting in New York, have studied the relationship between brands and fans more closely by looking at the effect of official sponsorship on key aspects of the brand relationship

Using key sponsors from the NFL, they’ve looked at what role sponsorship plays in brands achieving knowledge (how well the brand is understood), esteem (how well regarded the brand is) relevance (how appropriate the brand is seen to be), and differentiation (how distinctive the brand is in its point of view from competitors) among the sport’s fans versus non-fans over the 2008-2010 time period. What the two brand practitioners were particularly keen to examine was whether or not sponsoring brands achieved any advances over their competitors. You can read their paper on this here.

Their out-takes are that:
1. Passionate fans are much more drawn to official sponsors than less passionate fans.
2. Consumers who consider a brand relevant will try it, particularly if they are encouraged to do so by sponsors via multiple touchpoints.
3. Greater esteem leads to greater preference and loyalty.
4. Sponsorship increases familiarity, which in turn leads consumers to believe that they really know a brand.
5. In this particular case, over time, official sponsors of the NFL improved their brand positioning against their competitors, underlining the importance in the minds of the authors of continuing longer term contracts to build the effects and benefits of linkage.

So the opportunities are there for brands involved long term in sports that attract passionate followings to substantially increase their equity amongst that community – assuming of course that the fan base is big enough and committed enough to carry their enthusiasm through to active support, and that the brands themselves have continued their association long enough for their participation to register.

Gary Belsky, whose Time post first alerted me to this story, says that the link between sponsorship and purchase from fans make sense because, to quote Daniel Kahneman, the brain uses many non-conscious shortcuts to help us get through the many decisions we need to make every day. When we’re faced with choices or questions where the answers aren’t immediately obvious, we substitute the difficult question with a simpler one and answer that. Our response to official sponsorships, Belsky surmises, probably involves substitution. We go for what we think we know. We rely on the association principle that if a brand is good enough to back a much-loved sport, then it’s good enough for us. “We’re looking for easy answers to the simplest questions possible,” explains Belsky, “and more often than not the question “Who’s the official cell phone company …?” is easier to answer than “Which cell phone plan is best for me?””

While Wakefield’s and Rivers’ paper draws some interesting, if perhaps unsurprising, conclusions, what’s missing for me is the money-shot (which to be fair, the authors may have actually revealed at the Conference itself), and that is whether a NFL sponsor forking out perhaps millions of dollars a year can directly attribute a significantly profitable bottom-line return on that investment. Does sponsoring a major event pay for itself or do brands simply experience an ego-boosting rise in sentiment? Does all that knowledge, esteem, relevance and differentiation translate directly into trackable converted sales?

Looking further afield, a paper by Jin-Woo Kim, a PhD student at the University of Texas, on the worth of sport event sponsorship, published in the Journal of Management and Marketing Research, seeks to correlate the effects of sports sponsorship in terms of consumer psychology and financial returns. From his study of a number of other events, Kim concludes, “sports sponsorship is one of the best ways to build a communication path toward consumers (Buchan, 2006) … Unfortunately, not every company sponsoring World Cup and PGA enjoys significantly positive cumulative abnormal returns but the short-term financial performance can be enhanced by brand value. Product fit was identified as a potential driver that enhances short-term financial performance.”

So:

  • Reaching people through their sport is highly effective (for all the reasons outlined in Wakefield’s and River’s paper I would suggest)
  • Brands will see very different direct financial returns from their involvement. Those most likely to see the best return are those where their product aligns as directly as possible, physically or emotively one presumes, with the event they are sponsoring.
  • There’s a good chance that those brands that don’t see a direct shift in the short-term financially may see a lift in their overall brand value over the longer term (which sounds to me a bit like the fund manager’s promise that if you stay in the market long enough and keep investing, one day you will see a return).

All of which suggests that achieving brand likeability through sponsorship is a relatively inexact science. One that you can skew in your favour however if you:

  • Target specific, presumably segmented audiences (that you cannot or do not reach any other way?)
  • Look for ways to engage with those audiences in, around and beyond the event itself
  • Directly align what you offer with what fans of the sport/event enjoy
  • Provide clear calls to action that fans can take, again in, around and beyond the occasion that then bring you revenue (Wakefield and Rivers give an example of how Dunkin Donuts have made drinking one of their iced coffees a key ritual at Red Sox games)
  • Reinforce your passion as a brand for the sport/event that your target audience are committed to, and link it back to what the brand and the audience share. This provides a common worldview as the basis for a relationship.
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