Editor's note: Nicholas Cameron is CEO of the New York office of SponsorMap, a Valley Cottage, N.Y., research company. He can be reached at nicholas.cameron@sponsormap.com or at 917-675-3403. This article appeared in the September 27, 2011, edition of Quirk's e-newsletter.
Sponsorship accounted for $17.2 billion of marketing expenditure in North America in 2010, a 3.4 percent increase from the previous year. More than 70 major U.S. companies are each investing more than $15 million per year in sponsorship deals alone.1 As more brands increase their investment in sponsorship, some key questions about how sponsorship works and how it can more effectively be measured remain.
Traditional approaches
The traditional approaches to sponsorship measurement that have dominated research for 20 years are based on sponsor recall methods and logo-counting impressions. Logo-counting or measuring the size, reach and frequency of a sponsor logo is the prevailing approach used by most sponsors. The equivalent media value is calculated in terms of various formulae but the overall value of the sponsorship is based on sponsorship as a media buy. The greater the brand exposure, the higher the ROI. The technology for this methodology has improved over the years but the key deliverables are essentially the same, reducing sponsorship effectiveness to media buying without consumer insights.
The second-most popular approach to sponsorship measurement is sponsor awareness. This is the primary determinant of sponsor effectiveness for consumer research surveys because of the general perception that the most successful sponsors are those who achieve the highest recall. While sponsor recall is a necessary component of successful sponsorship, there is much more to it.
Companies often see increases in sales and brand equity but because precise measurements are lacking, do not know exactly why these results have occurred. When key metrics are only based on exposure or brand recall, analysis is limited. Critics of sponsorship almost always take positions that only consider ROI in terms of sponsor recall.
The theory of sponsorship
One of the main problems with sponsorship measurement has been the application of advertising research methods to sponsorship without considering the core aspects of what makes sponsorship different in the first place. In short, advertising-based research methods cannot be applied to sponsorship. Instead of applying advertising methods, researchers need to take these sponsorship variables into account based on the theory of sponsorship.
Unlike advertising that is a two-way relationship between an advertiser and a customer, in sponsorship there is a three-way relationship and the interactions between sponsor and property, property and customer and sponsor and property all have an impact on sponsorship effectiveness (Figure 1).
Property and customer
The property and customer relationship is about a consumer's emotional engagement and attitudes toward a property. This is incremental: The stronger the bond between a property and customer, the more effective the sponsorship. In the case of the L.A. Lakers, a fan will react quite differently to the sponsorship of the team than a person who has little involvement or passion toward the team, the NBA or basketball. The level of emotional involvement with the property must be measured if we are to understand how the sponsorship is working.
Property and sponsor
The second relationship that requires measurement is the one between a property and sponsor. The importance of this interaction is highlighted by perceptions toward sponsors of the 2008 Beijing Olympics when several pressure groups called for boycotts of the major Olympic sponsors based on their involvement with the property.1 With Beijing, some people perceived sponsors in a negative fashion because of their involvement. The perceived relationship fit between a sponsor and a property is an interaction that influences sponsorship effectiveness. A strong fit between a property and a sponsor will be more likely to deliver an effective sponsorship campaign than one that has a weak fit or one that actually has negative perceptions.
Sponsor and consumer
The third relationship is between the sponsor and the consumer. Effective sponsorship is about achieving marketing objectives and this requires changes in consumer behavior. The extent of sponsorship activation can range from simple logo presence to more significant activation in-store, with packaging and through to social media engagement. Sponsorship provides the emotional glue for consumers from which brands can build relationships. It acts as an amplifier for brand communications by communicating with emotions. In such cases, the quality of the sponsorship activation is a key variable to include in any measurement approach.
Not normally measured
Sponsorship theory suggests that measurement needs to consider several factors that determine effectiveness that are not normally measured with traditional communication models (Figure 2).
Factor No. 1: Consumer passion
The initial stage of sponsorship (the attention stage) occurs when the actual sponsor's presence is communicated. This is where we would measure logo exposure or media coverage, especially for major events or broadcast sponsorship. It is a measure of the volume of noise generated about the sponsorship but not if it is recalled.
For effective sponsorship, the target audience must be able to recall the sponsorship. The measurement called understanding calculates the extent to which consumers actually recall the involvement of a sponsor. Sponsor awareness is assessed in terms of top-of-mind, spontaneous or prompted sponsor-recall metrics. Most consumer research surveys include these measures.
The next stage involves measuring the level of emotional engagement between a property and a consumer. This is a critical area of measurement, as engagement (passion) is a core element of sponsorship simply because it is the primary reason sponsorship as a marketing tool is effective in the first place. For example, we can hardly talk about measuring the sponsorship effectiveness of NASCAR without considering the role of passion itself. As we would expect, the greater the emotional bond with a property, the higher the probability the target audience will recall the sponsor. Certainly a fan of NASCAR is going to be better able to recall the sponsors than someone who is less passionate about NASCAR itself.
Figure 3 demonstrates why passion is a key determinant of sponsor awareness. This measurement produces more conclusive results than those simply based on consumer awareness. If you were to base your analysis on those aware versus those unaware you would not see the significant impact passion can make in measurement.
Analysts using sponsorship tracking studies measure effectiveness by comparing groups who are either aware or unaware of sponsorship, attributing differences to this criterion. Then they often recommend increasing sponsorship awareness for all brands. Our research shows that this approach can lead to incorrect assumptions and marketing insights because there are limitations to the appeal of particular sponsorships. For example, there is no point in Bank of America attempting to communicate its sponsorship of the PGA tour to people with no passion for the PGA. Instead, it is better to focus on converting passionate PGA fans into bank customers or retaining existing customers with targeted sponsorship-related communications. It is just as important to know the strength of appeal or passion of a target audience toward a sponsored property as it is to measure sponsor recall.
Without considering the natural limits of a sponsorship to work outside the the core passion-driven segments, sponsors can be easily misled. We recommend that a sponsor allocate budget to increasing sponsor awareness instead of concentrating on call-to-action activities with a passionate target base. In tracking studies we often see this phenomenon, where the initial ratings look good but progressively worsen as the sample base is enlarged to include people who are sponsor-aware but not passionate about the property.
Factor No. 2: Appreciation/gratitude
Drawing from the theory of sponsorship known as Heider's Balance Theory, we can apply a measurement scale to ascertain a consumer's appreciation or gratitude to sponsors. Heider established that most individuals strive to maintain a sense of balance in relationships or a harmonious state to avoid inconsistency in behavior and attitude.1 Just as individuals seek to maintain a balance in their relationships, they also seek a balance in their attitudes. In sponsorship, the relationships are between a property, a sponsor and their own attitudes and behavior. If a sponsor enhances their enjoyment of an event or supports a property to which they feel a strong emotional bond, attitudes change as the consumer readjusts the balance in the relationship.
Sporting events with significant commercialization illustrate relationships where multiple sponsors are expected and sponsor appreciation is often lower. For example, we would expect sponsor appreciation to be lower in the NBA where the heavy sponsorship presence is expected by fans.
At the same time, sponsorship activation can improve sponsor appreciation when fans' experiences of the property are enhanced by sponsors. Football is a notable example. Sponsor appreciation may be low if the interaction with sponsors is restricted to a logo-viewing experience. This dynamic would change when a sponsor's experience involves things such as a sponsor providing fans with access to elements to enhance their experience of the events themselves. This could involve anything from preferential seating at events through limited-release merchandising or social media engagement. These are all key elements of effective sponsorship activation strategies.
Sponsors with targeted sponsorship activation strategies often achieve higher appreciation, which in turn leads to improved brand response. Corporate hospitality is the best example of the role sponsor appreciation has in marketing. Corporate events are effective because they create an imbalance in a marketing relationship.
Cause-related types of sponsorship inherently achieve higher levels of sponsor appreciation. In many of these cases, passion levels may be lower for a cause-related sponsorship but sponsor appreciation levels will invariably be much higher. It is sponsor appreciation that is working the hardest for the sponsor and many consumers will readjust their attitudes based on the company's cause-related sponsorship. We know from Balance Theory that this readjustment in attitudes also makes cause-related marketing effective.
As Figure 4 demonstrates, brand advocacy (measured through the Net Promoter Score) is directly influenced by sponsor appreciation. The more that consumers appreciate a sponsor, the more they were willing to recommend the sponsor to friends and family.
Factor No. 3: Sponsor-liking
That said, not all people have a tendency to feel appreciation. As with other types of psychological behavior, some are more receptive than others. The third key metric is sponsor-liking. Sponsor-liking recognizes that a sponsor's involvement with a property can be perceived positively or negatively.
Generally, a sponsor's involvement will be positive but there are exceptions. In extreme instances, unpopular naming rights sponsorship deals can lead to consumer boycotts. However, more often than not, the property rather than the sponsor creates problems for sponsors. When passionate fans have a strong disagreement with the direction of a property, boycotts of the sponsors themselves can result. A well-known example was when Manchester United fans called for a boycott of major sponsors, including Vodafone, because of U.S. tycoon Malcolm Glazer's takeover of the club.1 In the same fashion, properties can fall from grace, as happened when Tiger Woods' personal troubles resulted in many sponsors ceasing their involvement.
Work in different ways
In the last 10 years of sponsorship evaluation we have seen various types of research projects and sponsorships. These have ranged from sports and personalities to broadcast events and causes. The results of these evaluations have demonstrated that various sponsorships work in different ways and these differences are reflected in the metrics themselves. Sporting sponsorships with strong commercial aspects generally have strong passion ratings for the sponsorship property and lower gratitude ratings. Cause-related sponsorship properties generally have very strong levels of sponsor appreciation and much lower levels of passion to the cause itself. Cause-related sponsorships are more likely to be driven by sponsor appreciation and major sporting events are more likely to be driven by passion.
Additionally, many sponsorships - especially very successful ones - achieve both high passion and high sponsor appreciation ratings. In these instances, the overall sponsorship experience has been more experiential, where the sponsor enhances the overall event experience. The combination of a very passionate fan having their event experience enhanced by a sponsor has resulted in strong lifts in brand KPIs. Brand experience and the activation of the sponsorship are the key variables that influence the success of a sponsorship. These are the dynamics of sponsorship activation and simple measures of sponsor recall will not reveal these insights alone.
A more significant role
Looking forward, we expect to see a more significant role for sponsorship in brand communications. This is because it provides the content often needed for building emotional relationships with brands in social media and digital marketing. Sponsorship provides the engaging content for social media marketing and provides followers with something of worth - something they cannot receive easily anywhere else. A recent example is American Idol 2011 with Coca-Cola, Ford and AT&T building comprehensive digital marketing activities around the program, ranging from custom-designing Coca-Cola cups to producing music videos. The role of sponsorship was clearly less about recalling a brand and more about emotional engagement.
As researchers, we need to go beyond logo-counting and sponsor recall. We need to take our measurements around the basic theory of how sponsorship works - not by recycling an advertising research model. By measuring passion, appreciation and sponsor-liking, researchers can provide a long-overdue rethink for measuring the effectiveness of sponsorship.
References
1 Deep Pockets: The Biggest Sponsorship Spenders of 2010, on Sponsorship.com available at https://www.sponsorship.com/User/Login.aspx?ReturnUrl=percent2fiegsrpercent2f2011percent2f05percent2f16percent2fDeep-Pockets--The-Biggest-Sponsorship-Spenders-of-.aspx&Access=0&Reason=NoUser