1 Easy Way to Increase ROI from Sports Sponsorships

Marc Mazodier, Conor M. Henderson, and Joshua T. Beck
 

 

 
sports sponsorships
Key Takeaways
What? Brands spend big money sponsoring sports because of its mass-market appeal and global audience. However, they may be under-investing in a group that’s potentially the most profitable: out-of-market fans.     

So What? Due to their isolation, out-of-market strong fans are highly motivated to buy and remember a brand more easily than other fans. A single exposure to a brand sponsorship for isolated strong fans is as effective to the brand sponsor as multiple exposures for all fans.

Now What? Digital advertising allows brands to promote their sponsorship in a more targeted and effective manner compared to TV campaigns. Brands should promote sponsorship based on audience location and interests.

The global sports market posts double-digit revenue increases each year, soaring to $90.9 billion in 201​7. It’s an industry characterized by big-dollar stars, passionate fans, and high buy-in. The NFL, for example, notched sponsorship revenues of $1.32 billion for the 2017-2018 season and its games on average command $134,009 for 30-second ad spots. Sponsors pay the high fees to gain mass-market visibility in a world of fragmenting media channels. They connect with fans via advertising, events, merchandise, and more, but often favor local fans with whom they can build a more immediate connection.

Given the big money involved for sponsors, our new study, published in the Journal of Marketing, seeks to understand the impact of sponsorship on a little-studied group: out-of-market, or isolated, fans. It’s a timely topic because TV and digital media have helped grow a global fan base. In soccer, 80% of the British Premier League fans live outside of the United Kingdom, one reason Chevrolet’s $560-millon sponsorship of Manchester United specifically targets out-of-market fans. However, industry experts say up to one-third of sponsorship budgets are wasted and only half of TV viewers can recall a sponsor of NFL games. So how can sponsors connect with out-of-market fans and determine their ROI?

Our research team posited that sponsorship effectiveness depends in part on where strong (versus weak) fans are situated relative to other fans. Based on an affiliation theory of sponsorship that argues sponsorship works by satisfying a fan’s affiliation needs, we predicted that fan isolation–or the experience of feeling separated from the team community—would trigger different affiliation motives and responses based on the level of fan identification. Specifically, we hypothesized that strong fans would seek team-based affiliations, whereas weak fans would affiliate with others in their immediate social environment. These different affiliation strategies should result in isolated strong fans being more receptive of brands that support their team (a “doubling-down” effect), whereas isolated weak fans would avoid brands that supported the team (a “desertion” effect).

To test this hypothesis, we studied 1,412 fans from across three countries and sports. We used two field studies to evaluate the effectiveness of real sponsors and four experiments to test the impact of real and fictitious sponsorships. Sponsorship performance was measured by a fan’s memory, attitudes, word-of-mouth, and purchase intentions for sponsor brands.

Key findings include:

  • Isolated strong fans exhibited increased memory, attitudes, word-of-mouth, and purchase intentions for sponsors. Isolated weak fans revealed the opposite behavior. For example, in our study of Premier League fans, more-isolated strong fans recalled the team’s brand sponsor 68% more than less-isolated strong fans. Similarly, when we studied NBA Lakers fans, isolation resulted in a 22% increase in brand sponsor purchase intention and word-of-mouth for isolated strong fans, but an 8% decline in purchase intentions and a 9% decline in word-of-mouth for isolated weak fans.

  • In other experiments, when the strongest fans were made to feel more (vs less) isolated, they exhibited 46% better unaided recall of the sponsor brand, 38% more favorable attitudes, and 91% greater likelihood to choose the sponsor brand instead of a competitor.

  • A single exposure to a brand sponsorship advertisement for isolated strong fans is as effective as multiple exposures to the brand sponsor advertisement for all other fans.

  • The work advances an affiliation theory of sponsorship, showing that sponsorship works because of the desire for affiliation, a desire that increases for strong fans when they are isolated from other fans.

Sponsors traditionally have targeted the strongest local fans with advertising dollars. Our research indicates that sponsors should instead prioritize a group that has been commonly ignored: strong fans that are out-of-market and who are more motivated to both buy team goods and choose their brands. In the digital era, companies can easily accomplish this goal by micro-targeting fans by audience location and interests on social platforms such as Facebook, YouTube, Twitter, and sports sites.

Marketers can use our research to spend advertising dollars more effectively. For example, it may drive more ROI to allocate a good portion of advertising spend to digital advertising targeting out-of-market fans rather than paying for individual 30-second TV spots. Sponsors can cultivate a digital fan base they can market cost-effectively, deepening loyalty and driving revenue with each offer. However, they also need to take care not to antagonize isolated weak fans, whose loyalty may also grow over time.  

Read the full article.

From: Marc Mazodier, Conor Henderson, and Joshua Beck, “The Long Reach of Sponsorship: How Fan Isolation and Identification Jointly Shape Sponsorship Performance,” Journal of Marketing, 84 (November).

Go to the Journal of Marketing​​​​​​​​​​​​​​​​​​​​​​​​


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ABOUT THE AUTHOR:
Marc Mazodier, Conor M. Henderson, and Joshua T. Beck
Marc Mazodier is Associate Professor of Marketing, Zayed University, and Affiliate Professor, Kedge Business School. Conor M. Henderson is Assistant Professor of Marketing, Lundquist College of Business, University of Oregon. Joshua T. Beck is Assistant Professor of Marketing, Lundquist College of Business, University of Oregon.

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