Assessing corporate demand for sponsorship: marketing costs in the financial services industry

Despite increased interest in nontraditional marketing activities such as sponsorship, the ability of brand marketers to quantify the return on investment from such approaches is a continued challenge. Given their proprietary nature, investigations of sponsorship costs are particularly sparse. Therefore, this study utilizes a dataset of more than 700 sponsorships undertaken by competitors in the financial services industry to investigate the influence of a variety of factors on costs. Results indicate that costs are not simply reflective of firm size, and costs of title and naming rights sponsorships are significantly higher. Evidence of agency conflicts are found in increased costs for sponsorships of events, organizations, and venues residing within the marketers’ home market. Sponsorships of sport organizations are significantly more costly than those of arts, entertainment, and nonprofit organizations, presenting a challenge for marketers seeking to engage today’s consumer via sport sponsorships in an increasingly competitive environment.     

Are rival team fans a curse for home team sponsors? The moderating effects of fit,oppositional loyalty,and league sponsoring

Sports sponsorship is big business, and a great deal of research provides evidence as to sponsorship’s efficacy in achieving a large range of communication goals, particularly for brands that are perceived as fitting well with the sport by the most involved fans. A developing body of literature, however, suggests that fan passion for a favorite team or athlete might work against the sponsors of hated rivals. The current research contributes to the rivalry effects topic by examining the impact of sponsor-sport fit, business rivalry, and league sponsoring on “home” team fan attitudes towards the sponsors of their team’s main rival. The study finds that negative rivalry effects are particularly severe when the rival team sponsor has high-perceived fit with the sport and is a direct business rival to a “home” team sponsor, but that league sponsorships largely mitigate these rivalry effects.     

Investigating social marketing sponsorships: Terminology, stakeholders, and objectives

In spite of rapidly increasing professional interest and involvement, the extant literature concerning social marketing sponsorships remains scant. In order to begin to address this gap, the purpose of the current research is to investigate the concept of the social marketing sponsorship. The research in this paper (a) reviews the sponsorship literature and theory - specifically focusing on what is meant by sponsorship when used in social marketing; and (b) reports the results of empirical case research on the formation and implementation of a sponsorship designed to support a social marketing program aimed a reducing stigma and changing behaviors around mental health. The paper reports on how social marketing sponsorships compare to commercial sponsorships in terms of (a) the identification of key stakeholders and their roles, (b) the objectives of the stakeholders involved, and (c) how sponsorships are formed, developed, and implemented.     

Corporate Objectives in Sports Sponsorship

This article considers corporate objectives in sports sponsorship. The important question is to determine why companies sponsor sport when there are other promotion techniques available to them. Reasons for sponsoring sport in the first place are discussed, as well as broad corporate objectives in becoming involved in sponsorships. This study involved a sample of 45 sponsors who received media exposure in South Africa between November 1984 and March 1985. Results show that the most important reasons for sponsoring sport include potential TV coverage, promoting the corporate image and the potential of spectators as customers. Anonymous sponsorship, even philanthropic, is rare.     

An Investigation of Children's Ability to Identify Sponsors and Understand Sponsorship Intentions

Sponsorship has become an important tool for companies that target children with their market offerings. Despite growing firm interest in assessing sponsorship effectiveness and public concern about the effects on children, research to date has not investigated how sponsorship functions for children. This article addresses both issues by examining children's perceptions of sponsors (i.e., ability to identify sponsors in different conditions) and their perceptions of sponsorship (i.e., ability to understand sponsorship intentions). Because prior research on these issues is scarce, the conceptual reasoning relies on findings from advertising literature pertaining to children and sponsorship literature. An empirical study features sponsorships in a theme park for children. The results reveal implications for managers and public policymakers, as well as avenues for further research.     

Creative Analogy As a Means of Articulating Incongruent Sponsorships

Sponsorship congruence refers to the extent to which associations held for a property are perceived as sharing content and meaning with those held for a brand. Congruence has been shown to enhance the benefits derived from sponsorship. Consequently, it is important for an incongruent sponsor to articulate how it is related to a property. Analogical articulation represents a creative way of resolving perceptions of incongruity. A contribution of the current research is that it is the first to distinguish sponsorship effects on the basis of articulation type. Across four studies in which analogical articulations of incongruent sponsorships are compared to unarticulated and nonanalogical articulations (for both congruent and incongruent sponsorships), we find that analogical articulations improve perceptions of an incongruent sponsor's fit with a property and also perceptions of the sponsorship alignment's creativity. Analogical articulations also elicited a more pronounced “aha” moment of insight, which was found to mediate the effect of analogical articulation on perceptions of fit and creativity. Finally, analogical articulations yielded greater recall of the sponsorship.     

Assessing the Economic Worth of Corporate Event Sponsorships: A Stock Market Perspective

Sponsorships of events represent a significant and growingcomponent of firms overall investment in marketing and promotions.While the marketing literature suggests that sponsorships maybe a potential communications tool, relatively little empiricalresearch has been devoted to studying efficiency issues in sponsorships.To understand if sponsorships are efficient investments, we assesstheir economic worth via the event study methodology. Specifically,we hypothesize that a corporate sponsorship announcement providesinformation to market analysts who evaluate the potential profitabilityof a firm. This evaluation of a companys potential profitability,in turn, affects the firms stock price. Announcements of 76sponsorship events were analyzed using the event-study method.Results indicate that on average, corporate sponsorship announcementsimpact the stock market positively and that sponsorships areviewed as worthwhile investments by the financial community.The findings of this study contribute to a better understandingof performance issues surrounding sponsorship investments, andextend recent literature which examines the financial impactof marketing decisions.     

A Cross-Cultural Investigation of the Ethical Dimensions of Alcohol and Tobacco Sports Sponsorships

While the sport industry has grown into a multi-billion dollar international business with unique ethical concerns, there is little empirical research examining the ethics involved in sport sponsorships, especially sponsorship of alcohol and tobacco brands. This study investigates the potential influence of culture and gender on future practitioners' willingness to work in the tobacco and alcohol sport sponsorship areas. The nature of the relationship between sports, alcohol and tobacco is reviewed, along with past research on variables noted to influence ethical decision making. Three hypotheses are investigated for differences between American and Australian students. A cultural difference in ethical perceptions is supported, while gender differences are not significant. The implications of these findings are discussed, along with the study's limitations and future directions for ethics research in sport marketing.     

Testing Gibrat’s Law for Small, Young and Innovating Firms

This article analyses whether small, young, and innovating firms have experienced a greater employment growth than other Spanish firms over the period 1990–2000. The study draws upon a sample of 1272 manufacturing firms in which only 967 of the firms survived for the entire ten year period. The analyses test Gibrat’s law, both by least squares and by utilizing the procedure proposed by Heckman in which a probit survival equation is first estimated to correct for sample selection bias. Two estimators correcting for selection bias are utilized: one that incorporates the inverse Mill’s ratio and the other that employs maximum likelihood methods. All the results reject Gibrat’s law and support the proposition that small firms have grown larger. Additionally, the results show that old firms grow less than young ones, and innovating activity – both process and product – is a strong positive factor in the firm’s survival and its employment growth.     

Pricing Policy and Partial Collusion

We study the pricing policy equilibria emerging in a partial collusion duopolistic framework where firms in the first stage of the game choose non-cooperatively the pricing strategy (perfect price discrimination or uniform pricing), and from the second stage onward collude on prices. We show that for intermediate discount factors and high firms’ asymmetry, the unique equilibrium is characterized by only the smaller firm choosing price discrimination. In the case of intermediate discount factors and low firms’ asymmetry, there are two possible equilibria: both firms price discriminate or no firm price discriminates. When the discount factor is particularly high or particularly low both firms price discriminate in equilibrium.     

Rules of engagement: A discrete choice analysis of sponsorship decision making

Abstract

This paper draws on exchange and utility theories to propose and test a model of sponsorship decision making using discrete choice analysis. Grounded in prior sponsorship research and current management practice, the model describes sponsorship selection as a sequence of choices about sponsorship packages of differing value. The core thesis is that managers attempt to maximise their utility when selecting sponsorships by evaluating the various pay-offs from the alternatives available. This research applies a simulated choice-based experiment with 196 sponsorship managers to assess their preferences for a set of criteria likely to shape their future decisions about sponsorship selection. While perceptions of brand-image congruence and relationship quality significantly affect sponsor preferences, contrary to some evidence, short-term business arrangements appear more desirable than longer-term sponsorships.     

Sponsorship portfolio as a brand-image creation strategy

The meanings held by events are sometimes transferable to a brand through sponsorship. The perceived sponsor-property fit affects brand evaluations. This research hypothesizes that in the case of a sponsorship portfolio, the source of image transfer can be composite, and brand image association may depend on the perceived fit between sponsorships. Building on theories of social cognition and categorization, this research proposes two dimensions of fit: sponsorship category relatedness and event personality fit. Two experiments show that categorical relatedness between sponsorships not only leads to the creation of a unified brand personality for the sponsor, but also enhances brand meaning consistency and clarity. Central category-related traits cue a category membership framework that integrates sponsorships in the portfolio. Under conditions of category ambiguity, the impact of event personality fit emerges. Interestingly, the findings suggest that sponsored properties having a “spiky” brand personality (having both high and low performance on dimensions) may communicate most clearly in a portfolio.     

Drivers of brand image improvement in sports-event sponsorship

This stock-taking article re-examines 20 years of research on conditions that influence the magnitude of brand image improvement through sports-event sponsorship. The study suggests a procedure to adequately measure sponsor image change in field sponsorships and investigates potential factors related to the sponsored property, the sponsorship relationship, the sponsor, and the individual sports spectator that may affect the magnitude of sponsor image improvement. An empirical analysis in the context of a large sponsored sports event shows that some drivers influence sponsor image improvement directly in a multiple regression analysis (spectators’ perceived event image, event–sponsor fit, sponsor familiarity, and product category importance), while other drivers are related to sponsor image in bivariate analyses only (spectators’ event interest, sport interest, event exposure, and demographic characteristics). Reasons for these findings (e.g., interrelationship between drivers of sponsor image improvement), managerial implications, and consequences for the development of a comprehensive model of sponsor image formation are discussed.     

The effectiveness of advertising that leverages sponsorship and cause-related marketing

This paper shows that consumers are more likely to have ambivalent attitudes towards causerelated marketing (CRM) than sponsorship. Whereas consumers share similar positive perceptions of CRM and sponsorship, and attribute the motives behind them to altruism, their negative perceptions and attributions of CRM are more accessible than those of sponsorships. On the basis of these differences, this article proposes a contingency model in which suppressing the activation of CRM’s negative perceptions enhances the effectiveness of advertising that leverages CRM. The effectiveness of advertising that leverages corporate sponsorship, which is not associated with ambivalent perceptions, is less subject to the suppression of negative perceptions. The model includes two contingent factors, an individual difference factor and a situational factor. The results generally support the proposed model; the effectiveness of ads leveraging CRM improves when negative associations of CRM are less likely to be activated.     

The Evaluation of Sports Sponsorships

This article considers how sports sponsorships are evaluated by sponsors. The important question is to determine whether a systematic approach is used in the light of the huge expenditures involved in sponsorships. The role of sports sponsorships in the promotional mix is discussed, as well as the evaluation of sports sponsorships. This study involved a sample of 28 sponsors in South Africa during 1988. A framework for the evaluation of sponsorships is presented for use by companies wishing to enter the world of sponsorship.     

Fortuitous Brand Image Transfer

This study investigates the phenomenon of fortuitous brand image transfer, or image transfer that occurs by chance, between two brands sponsoring the same event concurrently (i.e., concurrent sponsorships). Two experiments show that concurrent sponsorships lead either to a transfer of image or to a contrast of image between sponsoring brands that are both familiar, depending on the similarity of their underlying brand concept. Image transfer occurs when the brand concepts of the two sponsors are similar, whereas image contrast occurs when the two sponsors have dissimilar brand concepts. Implications for branding and sponsorship research are provided, as well as recommendations for managers. Finally, directions for further research are suggested.     

Technological Centers as a Negotiated Context to Combine Technological Capabilities

Recent perspectives on a capabilities view of the firm often recognize the need for firms to develop an external organization. From a relational view of the industry, the external organization may include economic and non-economic exchange relationships. The decision to combine both types of relationships and its relevance for the firm can be linked to their role for accessing, generating and diffusing knowledge. More often than not, these decisions are however not unilateral. This paper discusses the potential role that Technological Centers (TC’s), created by the collective initiative of some local firms, can play as part of firms’ external organizations and emphasizes TC’s role in connecting economic and non-economic exchange relationships. It is further suggested that the diverse motives and benefits perceived by firms in relating in and across the TC’s and, in general, the relevance of sharing experiences within these contexts, should be seen in the wider context of firms’ specific and idiosyncratic trajectories.     

Religion, Opportunism, and International Market Entry Via Non-Equity Alliances or Joint Ventures

One challenge that globalization has brought to business is that firms, as they expand their market globally through cross-border alliances, need to deal with partner firms from countries of different religious background. The impact of a country’s dominant religion on its firms’ international market entry mode choices has not been examined in traditional approaches. Focusing on hypothesizing the influence of Christian beliefs and atheism (i.e., the absence of belief in any deities), this research aims to fill the gap by exploring religion’s role in providing moral restraint on managers’ propensity for opportunism, which in turn affects these managers’ choices of their firms’ international market entry via non-equity alliances or joint ventures. A study of 22,156 cross-border alliances formed in 48 industries world-wide over 9 years provides new insight toward understanding religion’s influence on firms’ international market entry mode decisions through the ethical dimension of strategic leadership. This article would fit best under the International Management section for reviewing purposes.     

Does Good Governance Matter to Institutional Investors? Evidence from the Enactment of Corporate Governance Guidelines

Corporate governance guidelines are a mechanism that a firm can enact which should reduce agency costs and better align the interests of boards and the suppliers of capital. This study examines stock price reactions primarily attributable to institutional investors occurring when corporations announce the enactment of corporate governance guidelines. A final sample of 77 firms was derived from the first announcement of corporate governance guidelines exclusive to the SEC-EDGAR database. The results indicate that good governance does matter. Firms that announced the enactment of corporate governance guidelines experienced increased stock prices following the announcements. There was an immediate (days 1–4) reaction for firms that provided all or part of the guidelines’ substance; a delayed (days 8–10) reaction occurred for those firms that only referenced the guidelines’ enactment. Additionally, firms with either a potentially greater following or that had a previous history of acrimonious relations with stakeholders were rewarded by the announcement of the enactment of guidelines.     

Is Publicity Always Better than Advertising? The Role of Brand Reputation in Communicating Corporate Social Responsibility

Previous studies on corporate social responsibility (CSR) communication suggest that firms’ social initiatives should be communicated through third-party, non-corporate sources because they are perceived as unbiased and therefore reduce consumer skepticism. In this article, we extend existing research by showing that source effects in the communication of social sponsorships are contingent on the brand’s pre-existing reputation. We argue that the congruence between the credibility and trustworthiness of the message source and the brand helps predict consumer responses to a social sponsorship. The results show that a non-corporate source (publicity) generates more positive brand evaluations than a corporate source (advertising) when the sponsor has a positive reputation. However, the converse effect occurs when brand reputation is low: when the sponsor has a poor reputation, a corporate source generates more positive brand evaluations than a non-corporate source. Mediation analyses show that the interaction effect between CSR information source and brand reputation can be explained by sponsorship attitude, persuasion knowledge, and perceived fit between the brand and the cause.