Building Brands through Event Sponsorships: Providing On-Site Audiences with a Vivid Brand Experience pdf

...178 Table 36: ANCOVA results of event involvement for sponsorship execution and brand vividness...178 Table 37: ANCOVA results of product involvement for sponsorship execution and bra

Providing On-Site Audiences with a Vivid Brand Experience

DISSERTATION der Universität St Gallen, Hochschule für Wirtschafts-, Rechts- und Sozialwissenschaften (HSG)

zur Erlangung der Würde eines Doktors der Wirtschaftswissenschaften

vorgelegt von

Caspar F Coppetti

von Zürich und Mollis (Glarus)

Genehmigt auf Antrag der Herren

Prof Dr Torsten Tomczak

und

Prof Dr Thomas Bieger

Dissertation Nr 2925 D-Druck Spescha Druck, St Gallen, 2004

Die Universität St Gallen, Hochschule für Wirtschafts-, Rechts- und

Sozialwissesnnschaften (HSG) gestattet hiermit die Drucklegung der vorliegenden Dissertation, ohne damit zu den darin ausgesprochenen Anschauungen Stellung zu nehmen

St Gallen, den 14 Juni 2004

Der Rektor:

Prof Dr Peter Gomez

Sarah, Monica, Peter, Marina Thanks for your love

Acknowledgements

Writing a dissertation has been likened to climbing a mountain, running an Ironman triathlon, or giving birth to a child Given my research topic, I would like to use a more salient metaphor The human mind has the ability to compress time when looking back

to things that happened in the past I will therefore undoubtedly remember the writing

of this thesis as an important event in my life – a challenging, yet very exciting one

Thank you for making it happen

I am deeply grateful to my doctoral advisors Prof Torsten Tomczak and Prof Thomas Bieger for accompanying me through the learning process that writing this thesis has been for me In retrospect, I admire Prof Tomczak’s unmatched capability to steer my thought process in the desired direction by leisurely asking questions that not only touch the core of the issue at hand, but cut straight through it On a more personal note,

I very fondly remember the relaxed, espresso-fuelled mid-morning sessions in Zurich Prof Thomas Bieger has supported this thesis with considerably more time and thought than his role of co-advisor would have obliged him to His valuable comments

at the right moment greatly helped the progress of this thesis Thank you, also, for the impromptu mountain run in the Alpstein

The classroom experiment conducted for this thesis benefited heavily from the input of Prof Michael Tuan Pham of Columbia University, New York, who generously shared his experience in the field of empirical research on sponsorship with me A warm thank you also goes to Dr Silke Mühlmeier for her valuable methodological support in the analysis of the data

This thesis is concerned with some very operational and practical aspects of sponsorship It therefore benefited heavily from the valuable discussions with practitioners in the field – the people who not only write about sponsorship, but actually make it happen Some of the people who contributed to this thesis can rightfully be considered to be leading resources on the subject I would like to thank Eugen Brunner, Jürg Capol, Thomas Fink, Erwin Flury, Dr Martin Venetz, Catrin Wetzel, and Philipp Wetzel for the very valuable and inspiring discussions we had

I am grateful to David Allemann for a number of things that helped make this thesis what is First, for introducing me to the branding world altogether, second for being a great sparring partner, always inspiring me to think deeper, and third for keeping me

a brand strategist at Advico Young & Rubicam

Two people deserve special mention as they have actually laid hand on the content of this thesis Pascal Baumann contributed the illustrations of the different sponsorship scenarios used in the classroom experiment Anyone who sees them will have no doubt that he is an artist in his very own right Stan Fineman was responsible for the proofreading of the text – a task that he fulfilled not only swiftly, but also with a careful eye to the readability of this thesis

A number of institutions (and the people who shape them) generously supported this thesis in a variety of ways: Advico Young & Rubicam (Edgar C Britschgi, Felix Kündig), McKinsey & Company (Philippe Blatter, Dr Christian Casal, and Dr Andreas Thut), Nestlé (Sibylle Kamber and Dr Sabine von Mannteufel), FIS Alpine Ski World Championships St Moritz (Gian Gilli and Jürg Capol), Leguan Productions (Toni Krebs), Verein Street Parade (Martin Schorno), and the University of St Gallen (lecturers, staff, assistants, and fellow students)

A special thank you goes to my reliable friends who have helped with interviewing spectators in St Moritz and carrying out the classroom experiment: Andrea, Catherine, Christoph, Daniela, Dominique, Marc, Matthias, Pascal, Rolf, Sabine, Serge, Simone, Thomas, and Tschäff

Thank you, Sarah, for all the support and understanding you have given me over the last months: putting up with very early morning writing fits, standing in the cold at countless events, listening to my incomprehensible, quasi-scientific rambling, and living among paper stacks for weeks at a time Thank you for walking this path with

me

14 Juni 2004, Caspar Coppetti

Overview of Contents

1 Introduction and Overview of Research 1

1.1 Introduction and Aim 1

1.2 Research Question 2

1.3 Scope of Research 3

1.4 Research Approach, Methodology and Structure of Thesis 4

2 Literature Review 8

2.1 Sponsorship 8

2.2 Events and Event Sponsorship 37

2.3 Brands and Brand Equity 43

2.4 Perception, Learning and Moderating Factors 47

2.5 How Does Event Sponsorship Affect Brand Equity? – A Summary of Current Research 59

3 Case Studies Freestyle.ch 66

3.1 Research Design and Methodology 66

3.2 Reason for Case Selection and Focus of Case Study 67

3.3 Freestyle.ch: Authenticity, Professionalism, Innovation 67

3.4 Case Rivella: Experiencing the Cool Side of a Traditional Brand 73

3.5 Case Chupa-Chups: Evoking Vivid Memories through Product Sampling 78

3.6 Results: Impact on Brand Equity 80

3.7 Discussion of Findings 82

3.8 Reliability and Limitations of the Research 83

3.9 Conclusions and Next Steps 84

4 Survey FIS Alpine World Ski Championships St Moritz 85

4.1 Research Question and Hypotheses 85

4.2 Methodology and Operationalization of Variables 89

4.3 Data Collection and Demographics 92

4.4 Testing of Hypotheses 96

4.5 Regression Analysis 99

4.6 Discussion of Findings for Each Sponsor 100

4.7 Reliability and Limitations of the Research 109

4.8 Conclusions and Next Steps 110

5 Designing the On-Site Brand Experience 113

5.1 Overview of Design Techniques for Event Site Brand Presences 113

5.2 Congruence with Event 118

5.3 Relationship Forming 120

5.4 Audience Participation 122

5.5 Brand Display 125

5.6 Does a First-Best Sponsorship Execution Exist? 130

5.7 Cost implications 137

6 Influence of Selected Sponsorship Design Techniques on Brand Image (Experiment) 141

6.1 Research Model and Hypotheses 142

6.2 Research Design and Methodology 153

6.3 Hypotheses Testing and Discussion 170

6.4 Modeling the Influence of Perceived Sponsor–Event Fit on Brand Image 180

6.5 Limitations of the Research 186

6.6 Conclusions 187

7 Overall Discussion and Conclusions 190

7.1 Overview and Discussion of Key Findings 190

References xii

Interviews xxviii

Appendices xviii

A Interview Guide Expert Interviews xviii

B Survey Instruments FIS Alpine Ski World Championships xix

C Stimulus Material and Questionnaires Classroom Experiment xxiv

Extensive Table of Contents

1 Introduction and Overview of Research 1

1.1 Introduction and Aim 1

1.2 Research Question 2

1.3 Scope of Research 3

1.4 Research Approach, Methodology and Structure of Thesis 4

2 Literature Review 8

2.1 Sponsorship 8

2.1.1 History and Significance for Today 9

2.1.2 Review of Sponsorship Definitions 19

2.1.3 Advances in Sponsorship Research 24

2.1.4 Definition and Measurement of Sponsorship Objectives 27

2.1.5 Measurement of Sponsorship Success 31

2.1.6 Sponsorship as a Means of Marketing Communication 32

2.1.7 Exploitation of Sponsorships 33

2.2 Events and Event Sponsorship 37

2.2.1 Events – Staging of the Unusual 37

2.2.2 Definition and Key Characteristics of Event Sponsorships 38

2.2.3 Audiences of Event Sponsorships 40

2.2.4 Role of the Media 42

2.3 Brands and Brand Equity 43

2.3.1 What Is a Brand? 43

2.3.2 Customer-Based Brand Equity 45

2.4 Perception, Learning and Moderating Factors 47

2.4.1 Perception 48

2.4.2 Cognitive Learning 49

2.4.3 Schema and Congruence Theory 52

2.4.4 The Role of Consumer Involvement in Cognitive Learning 53

2.4.5 Mood State’s Influence on Encoding, Recall, and Attitude 57

2.4.6 Multi-Sensory Experiences 57

2.4.7 Vivid Memories of Events: the Role of Episodic Memory 58

2.5 How Does Event Sponsorship Affect Brand Equity? – A Summary of Current Research 59

3 Case Studies Freestyle.ch 66

3.1 Research Design and Methodology 66

3.2 Reason for Case Selection and Focus of Case Study 67

3.3 Freestyle.ch: Authenticity, Professionalism, Innovation 67

3.3.1 Facts and Figures 67

3.3.2 Sponsorship Environment at Freestyle.ch 68

3.3.3 Sponsorship Structure 71

3.3.4 Sponsorship Effectiveness Tracking at Freestyle.ch 71

3.4 Rivella case: Experiencing the Cool Side of a Traditional Brand 73

3.4.1 Facts and Figures 73

3.4.2 The Rivella Brands – Color Coding 73

3.4.3 Rivella’s Brand Equity 74

3.4.4 Brand Targets and Marketing Communication Activities 74

3.4.5 Rivella’s On-Site Activities 75

3.4.6 Excursion: The Case for Integrated Communication 77

3.5 Case Chupa-Chups: Evoking Vivid Memories through Product Sampling 78

3.5.1 Facts and Figures 78

3.5.2 Brand Equity, Brand Targets, and Marketing Activities 78

3.5.3 Chupa-Chups’ On-Site Activities 79

3.6 Results: Impact on Brand Equity 80

3.6.1 Rivella 81

3.6.2 Chupa-Chups 81

3.7 Discussion of Findings 82

4 Survey of FIS Alpine World Ski Championships St Moritz 85

4.1 Research Question and Hypotheses 85

4.2 Methodology and Operationalization of Variables 89

4.2.1 Methodology 89

4.2.2 Measurements 90

4.2.3 Questionnaire Design 92

4.3 Data Collection and Demographics 92

4.3.1 Data Collection 92

4.3.2 Demographics 94

4.4 Testing of Hypotheses 96

4.5 Regression Analysis 99

4.6 Discussion of Findings for Each Sponsor 100

4.6.1 Audi 100

4.6.2 Carlsberg 102

4.6.3 Milka 104

4.6.4 Swisscom 105

4.6.5 Xbox 107

4.7 Reliability and Limitations of the Research 109

4.8 Conclusions and Next Steps 110

5 Designing the On-Site Brand Experience 113

5.1 Overview of Design Techniques for Event Site Brand Presences 113

5.1.1 Empirically Observed Techniques 114

5.1.2 Additional Techniques 115

5.1.3 Introduction of Framework 116

5.2 Congruence with Event 118

5.2.1 Event Reference 118

5.2.2 Target Group Specificity 119

5.3 Relationship Forming 120

5.3.1 Personal Interaction 120

5.3.2 Obligation Forming 122

5.4 Audience Participation 122

5.4.1 Audience Participation in Activity 122

5.4.2 Product Usage 124

5.5 Brand Display 125

5.5.1 Semiotic Engineering 125

5.5.2 Integration 126

5.5.3 Multi-Sensory Perception 127

5.5.4 Dramaturgy 129

5.6 Does a First-Best Sponsorship Execution Exist? 130

5.6.1 Event Site Brand Experience 130

5.6.2 Enhancement of Sponsor-Event Fit 133

5.6.3 Situational Factors 134

5.6.4 Sponsorship Execution Matrix 136

5.7 Cost implications 137

5.7.1 Leveraging Existing Materials 138

5.7.2 Creativity and Focusing 139

6 Influence of Selected Sponsorship Design Techniques on Brand Image (Experiment) 141

6.1 Research Model and Hypotheses 142

6.1.1 Conceptual Model 143

6.1.2 Development of Hypotheses 147

6.2 Research Design and Methodology 153

6.2.1 Experimental Set-Up 153

6.2.2 Operationalization of Independent Variables 157

6.2.3 Data Collection Procedure 159

6.2.4 Evaluation of Measurement Scales 162

6.3 Hypotheses Testing and Discussion 170

6.3.1 Influence of Brand Experience Level on Brand Attributes, Vividness, and Attitude as Well as on Sponsor–Event Fit (H 1a - d ) 171

6.3.2 Influence of Enhancing Sponsor–Event Fit on Perceived Sponsor–Event Fit (H 2 ) 173

6.3.3 Influence of Perceived Sponsor–Event Fit on Brand Attributes, Vividness, and Attitude (H 3a–c ) 174

6.3.4 Moderating Effects of Event Involvement and Product Involvement (H 4–5 ) 177

6.4 Modeling the Influence of Perceived Sponsor–Event Fit on Brand Image 180

6.4.1 Model Specification and Hypotheses 180

6.4.2 Hypotheses Testing and Overall Model Fit 182

6.4.3 Discussion 184

6.5 Limitations of the Research 186

6.6 Conclusions 187

7 Overall Discussion and Conclusions 190

7.1 Overview and Discussion of Key Findings 190

7.2 Implications for Practitioners 192

7.2.1 Implications for Sponsorship Managers 192

7.2.2 Implications for the Sponsorship Industry 195

7.3 Future Research Directions 200

References xii

Interviews xxviii

Appendices xviii

A Interview Guide, Expert Interviews xviii

B Survey Instruments FIS Alpine Ski World Championships xix

Questionnaire Group 1 xix

Questionnaire Group 2 xxi

Questionnaire Group 3 (Audi example) xxiii

C Stimulus Material and Questionnaires Classroom Experiment xxiv

Scenarios (Pringles example) xxiv

Comparison of illustrations for different brands (scenario 2 example) xxxvi

Questionnaire Product Involvement (Potato Chips Example) xxxvii

Questionnaire Event Involvement xxxix

Questionnaire Event Attributes xl Questionnaire Sponsor Evaluation (Pringles Example) xli Questionnaire Demographics xliv List of Figures Figure 1: Structure of this dissertation .7

Figure 2: Worldwide sponsorship rights expenditure 1987-2005E Source: SRI 2001 14

Figure 3: Sponsorship markets and growth rates by region 1998-2000 Source: SRI 2001 15

Figure 4: Breakdown of sponsorship rights expenditure (percent) by sector Source: SRI 2001 16

Figure 5: Forces behind sponsorship growth Source: own illustration, partly based on Meenaghan 1983 17

Figure 6: Overview and critical review of sponsorship definitions 22

Figure 7: Corporate objectives in sponsorship Source: IEG/Performance-Research 2001; 2002 31

Figure 8: Dimensions of sponsorship exploitation 34

Figure 9: Classification of event audiences (sponsorship target groups) .41

Figure 10: Customer-based brand equity Source: adapted after Aaker 1991 and Keller 1993 .46

Figure 11: A model of consumer information processing Source: based on Greenwald and Leavitt 1984 51

Figure 12: Persuasion routes of factual and emotional messages with low-involvement consumers Source: Kroeber-Riel and Weinberg 1999, p 596 ff .56

Figure 13: Persuasion routes of factual and emotional messages with high-involvement consumers Source: Kroeber-Riel/Weinberg 1999, p 596 ff 56

Figure 14: Selected factors influencing audience-based brand equity .60

Figure 17: Measurements of audience-based brand equity at Freestyle.ch .72

Figure 18: Facts and figures on Rivella’s on-site booth Source: Interview with Catrin Wetzel (2002) 76

Figure 19: Rivella's integration of advertising and event-site sponsorship Source: Rivella 78

Figure 20: Basic input-output model for on-site brand experience Source: based on Kotler and Bliemel 2001, p 324 87

Figure 21: Overview of the research design deployed at FIS Alpine World Ski Championships St Moritz 2003 .89

Figure 22: Sponsors’ on site-activities at FIS Alpine World Ski Championships St Moritz 2003 90

Figure 23: Demographic profiles of audience group 3 (direct contact) for individual sponsors 95

Figure 24: Audi’s brand scores among different spectator groups 101

Figure 25: Carlsberg’s brand scores among different spectator groups .102

Figure 26: Milka’s brand scores among different spectator groups .105

Figure 27: Swisscom’s brand scores among different spectator groups 107

Figure 28: Xbox’s brand scores among different spectator groups 108

Figure 29: Framework for event site execution 117

Figure 30: Determinants of brand experience .131

Figure 31: The on-site brand experience pyramid 132

Figure 32: Matrix combining brand experience and enhancement of fit 137

Figure 33: Conceptual model of relationships between sponsorship execution techniques and selected elements of brand image .143

Figure 34: Scenarios for the independent variables .158

Figure 35: Running-order of classroom experiment .160

Figure 36: Proposed causal model of how sponsor–event fit influences image transfer 182

Figure 37: Revised model with observed relationships among product and event involvement, sponsor–event fit, and selected elements of brand image .183

Figure 38: Overview of the main findings of this dissertation 192

Figure 39: Sponsorship planning and execution process .197

List of Tables Table 1: Streams of sponsorship research and main contributing authors Source: based on Cornwell and Maignan 1998 .25

Table 2: Time series of audience-based brand equity of selected sponsors Source: Venetz 1999; 2000; 2001; 2002 81

Table 3: Demographics of audience groups .94

Table 4: Frequency of brand use among audience group 3 95

Table 5: Awareness levels of sponsor brands among different spectator groups 96

Table 6: Scores on image dimensions of sponsor brands among different spectator groups .97

Table 7: ANOVA table for individual sponsors 98

Table 8: Standard deviations of individual groups 99

Table 9: Regression analysis of potential predictors for unaided sponsorship awareness .100

Table 10: Potential factors influencing the impact of event site sponsorship execution .112

Table 11: Empirically observed techniques for the design of event site brand presences 115

Table 12: Brand strength of selected snacks/sweets brand in percent relative to the strongest brand in Switzerland Source: AY&R 2003 156

Table 13: Clusters with brand/scenario combinations 159

Table 14: Sample sizes for each brand scenario combination 161

Table 15: Demographics of participants in classroom experiment .161

Table 16: Evaluation of study measures: stages and criteria deployed .162

Table 17: Summary of measurement instruments 163

Table 18: Evaluation of product involvement scale .164

Table 19: Evaluation of event involvement scale .165

Table 20: Evaluation of brand attitude scale .165

Table 21: Evaluation of brand vividness scale 166

Table 22: Attribute scores for Street Parade .167

Table 23: Table of variance for event attributes 168

Table 24: Rotated component matrix for event attributes .168

Table 25: Assessment and scores of event attributes retained for Street Parade 169

Table 26: Evaluation of Sponsor–Event Fit scale .170

Table 27: Summary of research hypotheses 171

Table 28: Mean scores for brand image and sponsor–event fit depending on the level of brand experience .171

Table 29: ANOVA table for constructs depending on the level of brand experience .172

Table 30: Mean scores for sponsor–event fit depending on the factor enhancement of sponsor event fit .173

Table 31: ANOVA-table for sponsor–event fit depending on the factor enhancement of sponsor–event fit 174

Table 32: Mean scores and t-tests for brand image depending on sponsor–event fit 175

Table 33: Correlations between perceived sponsor–event fit and elements of brand image 176

Table 34: Mean involvement scores for product categories and Street Parade 177

Table 35: ANCOVA results of product involvement for sponsorship execution and sponsor-event fit .178

Table 36: ANCOVA results of event involvement for sponsorship execution and brand vividness 178

Table 37: ANCOVA results of product involvement for sponsorship execution and brand image .179

Table 38: Comparison of models with regard to goodness-of-fit statistics .183

Table 39: Results of hypotheses testing (standardized regression weights and p-levels) 184

AGFI adjusted goodness of fit index

CAGR E estimated compound annual growth rate

FIFA International Football Association

UCI Union Cycliste Internationale; International Cycling Association

1 Introduction and Overview of Research

1.1 Introduction and Aim

In a fiercely competitive world strong brands have become a major source of competitive advantage Brands help companies to differentiate themselves from competitors, to justify a price premium, and to fend off potential market entrants Consequently, companies with strong brands consistently earn significantly higher returns on investments than their industry counterparts A recent study using the PIMS database shows that brand leaders in a specific category have an average of 30–50 percent higher ROIs than the number two brands (Morgan 1999, p 11)

To strengthen their brands, companies today spend significant amounts on marketing

In some markets, such as consumer goods, marketing spend amounts to some 40 percent of turnover (e.g., Red Bull: 35 percent; Economist 2002) While the lion’s share of this amount flows into distribution and traditional “above-the-line” advertising (i.e., electronic and print mass-media advertising, billboards), companies increasingly deploy alternative channels to communicate to their customers and to build and shape their brands Most companies today use direct marketing (often in combination with CRM), and interactive media such as the Internet Among these non-traditional channels, sponsorship has emerged as a very popular alternative Global expenditure on sponsorship rights has increased by an average of 12.4 percent per year over the last decade, reaching USD 26 billion in 2001 (SRI 2001) Germany, Europe’s largest market, accounted for DM 4 billion (USD 2.4 billion) in 1998 (Thomas 1999,

p 10)

Paradoxically, while sponsorship engagements are among companies’ most publicly visible and discussed marketing communications activities, little research has so far been conducted on the subject from a branding perspective (cf Cornwell and Maignan 1998) Also, while most marketing departments today are proud of their brand strategies and their professional standards and best practice procedures, sponsorship is often performed more as an art than as a science – or worse, is determined by the

personal preferences of the CEO

Even though many sponsorship engagements these days show a good fit with companies’ brand strategies, it appears that sponsors have difficulty fully capturing the

potential value of their engagements Creating brand equity through sponsorship requires two integrated and sequential steps The first is the easy one: getting access to sponsorship rights The second is where many companies fail: leveraging their sponsorship engagement through creative and consistent implementation both directly (e.g., at the site of an event) and indirectly, through other communication channels This thesis discusses how targeted on-site implementation of event sponsorships can positively influence audience-based brand equity – the return on the sponsorship investment

1.2 Research Question

This research was inspired by several experiences the author had at sponsored sports events, both as a visitor and as a member of a number of organizing committees Why was it that some sponsors seemed to have an omni-presence in visitors’ minds, while others were hardly remembered? And, more strikingly, why are smaller sponsors often better recalled than the main sponsors? If it is not the amount of money paid for an event’s sponsorship rights and thus the amount of signage at the event site that determines the “presence” of a sponsor within visitors’ minds then, what is it?

A small number of publications have proposed partial explanations of what makes sponsorship work, such as perceived brand-event fit, duration of event attendance, or the level of event involvement of spectators Strikingly, these assumed factors of sponsorship success are to a large degree outside the direct sphere of influence of sponsors (as they are mostly dependent on the attitudes and behavior of the event audience) In other words, the main body of the existing literature implicitly suggests that sponsors can do little to influence the success of their sponsorships

If this suggested lack of control were true, sponsorship would hardly be suitable as an effective brand-building instrument Further, the majority of research on sponsorship

deals with sponsorship strategy (i.e., which properties to sponsor) This contrasts

sharply with sponsorship practice, where considerable resources are allocated to

sponsorship execution (i.e., getting the most out of existing sponsorship engagements)

Apparently, there is a major knowledge gap as to whether and how the execution of sponsorships increases the return on investment in sponsorship rights

This leads to the research question:

Q: At sponsored events, how can a sponsor influence the build-up of audience-based

brand equity through on-site sponsorship implementation?

Lutz (1991), the former editor of the Journal of Consumer Research, called for more

research on substantive consumer behavior issues that are important to someone other than the researchers themselves Event organizers increasingly invite sponsors to help

them shape and enrich visitors’ event experience Sponsors, therefore, need a frame of reference for how to best deploy this design freedom As the many interviews conducted in preparation for this piece of research have shown, the question of how to best implement their sponsorships at the site of the event is of immense importance to marketers A thorough review of the existing literature indicated that no published scientific empirical or theoretical work was available to answer this question Closing this knowledge gap may, therefore, be deemed useful to both researchers and practitioners (cf Vradarajan 1996, p 1-2)

1.3 Scope of Research

This thesis focuses on selected aspects of sponsorship First, the subject is approached from a branding perspective Sponsors may also have other goals for their sponsorship, such as entertaining guests or portraying themselves as good corporate citizens In essence, however, sponsorship activities are a form of marketing communication

(e.g., Meenaghan 1983; Drees 1989) and as such will affect the public’s perception of the sponsor’s brand

Second, this thesis concentrates on event sponsorship While, as will be shown in this

thesis, the success of event sponsorships depends to a significant extent on the direct contact between the sponsor and the audience, different factors may be more

important for other forms of sponsorships (e.g., the sponsorship of a cause, or

broadcast sponsorship)

Third, the research is restricted to the event site audience of a sponsored event This means that branding effects on a larger audience that may participate in an event via mass media are not considered Existing research mostly ignores the on-site audience and focuses solely on the TV audiences However, on-site audiences can be quite substantial in size (e.g., 5 million at the Deutschland Tour of Cycling, 600,000 at the

US Tennis Open), and many small and medium-sized events are not televised

1.4 Research Approach, Methodology and Structure of Thesis

During the course of writing the present work, the author has, at times, felt like this explorer The main difference is that the island he walked around (i.e., event sponsorship) is not unknown In fact it is heavily populated, but no researcher so far has bothered to systematically draw a map of it or attempted to explain why things are the way they are This, therefore, leads to the approach of this dissertation: exploring a new field of research, structuring it in a meaningful way with a view to determine causal relationships

The research question as stated above comprises three distinct sub-questions:

equity?

a) Is there a causal relationship at all?

b) How much can brand equity be influenced by the event-site execution of a

sponsorship?

equity?

Methodologies

Considering the three-step research approach of exploring, structuring and determining causal relationships, as well as the three research questions, a mix of research methodologies is indicated to allow choosing the best-fitting methodology for each research step

Answers to question 1, which asks, “What techniques exist to influence based brand equity?” were found mainly through the use of two case studies at a popular Swiss youth sports event

audience-Research question 2a (“Is there a causal relationship at all?”) was approached using a

mix of quantitative and qualitative methods Mainly, it consisted of a quasi-experiment

in the field (Stier 1999, p 244) which was administered by means of a survey among different audience groups at the FIS Alpine World Championships 2003 Additional qualitative data was collected by means of interviews and systematic observation The qualitative data was deployed to aid in the interpretation of the survey results

Answers to the question of how brand equity is influenced by the on-site execution of

a sponsorship (question 3) were first developed on a theoretical basis The key concepts were then empirically tested, yielding also (partial) answers to the question of how large the effects on brand equity are (question 2b) The testing of causal relationships between selected on-site execution design techniques and brand equity required a high degree of control and therefore called for a classic experiment (e.g., Yin 1994, p 6; Stier 1999, p 219) In the last phase of this dissertation a classroom experiment was therefore conducted with a sufficiently large sample of bachelor students of the University of St Gallen

The research to date on other aspects of sponsorship has produced a host of

methodological insights which facilitated the study design of the present work The

main academic debate circles around the question whether surveys or experiments are the best means for researching cause relationship effects Surveys have the advantage that they assess real-life situations Skewed results in favor of the researcher’s

hypotheses due to a biased study design can be largely ruled out On the other hand, Pham (1991) rejects survey methods entirely due to their inability to discern the confounding effects of advertising and other promotional effects Bennet (1999) and

others argue, however, that advertising effects can be reasonably controlled This

holds, especially, for surveys which are only concerned with short-term effects This dissertation attempts to cope with these conflicting views through a research approach which explores the research question through both survey and experimental approaches

This dissertation consists of three largely independent empirical studies, with regard to the research objects (i.e., the events and sponsors concerned) and the methodologies deployed It applies source and methodology triangulations (Locke 2001) One main benefit of this approach is that it leads to increased reliability of the findings (Stake 1995)

Structure of Dissertation

This dissertation was outlined and written as a series of scientific papers in the sense that the individual chapters could be read and fully understood on their own (cross-references between chapters were added to help interested readers find additional information on a topic and to generally ease navigation through this thesis) At the same time, the individual parts build on each other, steadily developing the understanding of the core constructs and mechanisms The structure of the present work follows the thread of the three research questions (see Figure 1)

After a thorough review of the existing literature on the main constructs of sponsorship, events, brand equity and cognitive learning (chapter 2), two empirical sections discuss how event-site sponsorships can be executed (chapter 3) and whether exposure to sponsors’ event-site activities have an impact audience-based brand equity

at all (chapter 4)

Chapter 5 combines the findings of the two empirical sections and research on event marketing with the theoretical background of cognitive theory as discussed in the literature review A framework is presented which allows discussion of individual techniques used to design event-site sponsorship executions

The influence of two selected key design techniques on the perception of sponsoring brands is analyzed in a classroom experiment (chapter 6) The experiment also allows development of a model of how these techniques of on-site sponsorship execution influence some key precursor variables and how these causal relationships are affected

by moderating variables

Chapter 7, the concluding chapter, presents an overview of the key findings of this dissertation and discusses their implications for practitioners

2 Literature Review

Worldwide sponsorship expenditure grew from USD 2 billion in 1986 to 26 billion in

2001 Since its early days, sponsorship has evolved from surreptitious advertising to

a major element of the marketing communication mix, with the main goal of building brand equity Sponsorship of events, defined as unique and artificially created happenings, may target several audiences, mainly on-site and mediated audiences such as TV viewers Key factors influencing the success of event sponsorships are the perceived sponsor–event fit and the event-site execution of the sponsorship The creation of brand equity through ievent sponsorship can be explained by cognitive learning theory

Before the principal research question can be addressed, its main elements, sponsorship, events, and brand-equity must be introduced and clearly defined This chapter summarizes the main advances reported in previous research on these topics culled from an extensive literature review

Because an in-depth understanding of the characteristics of event sponsorship is the main aim of this thesis, the subject (in general and event-specific) will be looked at from various angles, ranging from an extensive review of definitions to an anecdotal history of sponsorship The heavily researched topic “brand equity” will be discussed

at a level appropriate to the needs of this study The same is true for the construct

“event,” which will be looked at from a sociological perspective As a basis for the empirical and conceptual work in chapters 1–1 a number of key psychological constructs are introduced which help explaining how consumers learn about brands at sponsored events At the end of this chapter the elements will be combined in a framework which summarizes the current view of the research community on how and why event sponsorship affects brand equity

2.1 Sponsorship

Sponsorship is a relatively new medium in the communications mix of companies This section provides a comprehensive overview of the topic Starting with the exploration of sponsorship’s roots in ancient Rome, a review of historical and current definitions is provided Later, the wide range of sponsorship goals is discussed, with a focus on the role of sponsorship as a marketing communications instrument This

section is concluded with an overview of the advances in and different areas of sponsorship research over the last two decades

2.1.1 History and Significance for Today

History

This section presents a brief overview of the history of sponsorship Given the research

purpose of this thesis, it appears useful to put an emphasis on why and how sponsorship developed, rather than on the exact determination of when An anecdotal

approach to the history was therefore chosen, looking at a few selected milestones depth, rather than approaching the task strictly chronologically

in-The Roots of Sponsorship

Many authors credit the origin of sponsorship to Gaius Clinius Maecenas (e.g., Bruhn 1986; Drees 1989; Dischinger 1992), who around 70 BC lived in Rome as a friend and advisor to Cesar Augustus His enormous fortune allowed him to invite some of the most renowned poets of the time, among them Horacius and Virgil, to his estates and

to pay for their living expenses The term maecenas is today used synonymously with patronage, and stands for the selfless, purely altruistic support of causes such as the arts, research or community matters (for a distinction between sponsorship and patronage, see also section 2.1.2) While Maecenas was hardly the first to engage in such an activity, his case is well documented (e.g., Realencyclopädie 1991) and therefore a welcome object of analysis If we consider Samuel Johnson’s dictum that,

“to act from pure benevolence is not possible for finite beings Human benevolence is mingled with vanity, interest or some other motive” (quoted after Meenaghan 1983, p 17), it can be argued that Maecenas’ support was a de facto sponsorship of the arts After all: Maecenas’ support was well received by the poets, who in return thankfully

included Cesar Augustus and himself in their oeuvres As a result, both August and Maecenas (the sponsors) as well as the poets (the sponsees) were able to extend their recognition, fame and esteem among the people of the Roman Empire Put in today’s marketing lingo, they were all able to increase their brand equity

Olympic Sponsorship

To study the evolution of modern day (event) sponsorship, it may be revealing to review the history of the world’s single, most-coveted sponsorship property: the Olympic Games (based on IOC 2002) Commercial association of companies with the

Olympic Movement started at the very first games, which were held in Athens in 1898 While a private benefactor, George Averoff, financed the major expense of refurbishing the Olympic stadium, companies provided revenues by advertising in the souvenir program (one of the first advertisers, Kodak, is a current member of the Olympic Partner Program (TOP)) In 1924 (Paris), venue advertising signage was introduced – for the first and last time in Olympic history Today, a fair share of the commercial value of the marketing rights of the Olympics may be attributed to their

“clean” commercial-free look In 1952 (Helsinki), the first sponsorship rights contracts were issued Subsequently, the number of sponsorships associated with the Olympics exploded, peaking at 396 sponsors and official licensees in 1980 (Lake Placid) That year, the IOC adopted a “less is more” policy and started the already-mentioned TOP program, which bundles the exclusive worldwide marketing rights to both Winter and Summer Games, and limits the marketing activities of the local organizing committees While the number of local sponsors and licensees (122 at the last Winter Games in Salt Lake City 2002) has since dropped by two thirds, the total funds provided by them have increased nearly 30-fold, from USD 32 million in 1980 to USD

865 million in 2002 – after accounting for inflation1, today’s average local Olympic sponsor contributes roughly 40 times more than two decades ago

Endorsement and the Fight for ‘Clean’ Athletes

The Olympics were also the stage for the first widely noticed sponsorship of an athlete (endorsement, see section 2.1.2) When Jesse Owens, a track and field athlete from the United States, won four Gold Medals at the 1936 Olympic Summer Games in Munich,

he was wearing shoes manufactured by a German cobbler by the name of Adi Dassler Adi Dassler had realized early on that not only were top athletes reliable and insightful testers of his footwear, but that they also had a powerful impact on shoe sales However, for a long time he believed in word-of-mouth promotion rather than in endorsement advertising This self-imposed restriction may well have contributed to Adidas’ defeat in the fight against marketing powerhouse Nike

While sponsors and athletes grew more expansive in the number and form of sponsorship deals they entered, not everybody involved tolerated the increasing commercialism One particularly resistant party was the International Olympic Committee, whose statues excluded professional (i.e., paid) athletes from competing in

1 118% according to the US Bureau of Labor Statistics (UDL 2003)

its quadrennial Olympic Games The IOC’s fight against commercialism first climaxed

in 1972, when it banned dominant Austrian downhill ski racer Karl Schranz from competing in the Winter Olympics in Sapporo While many athletes were rumored to have accepted money from sponsors, the famous ski racer had done so most openly (the IOC based its decision on a picture which showed Schranz playing soccer sporting the logo of a coffee brand on his jersey) The fans reacted with indifference if not support vis-à-vis sponsorship More than 100,000 supporters welcomed Schranz on his return to Vienna, and infuriated fans set afire the apartment of the president of Austria’s National Olympic Committee 16 years later, the IOC officially reinstated Schranz in a small ceremony, giving him a symbolic medal as a participant in the 1972 Winter Games in Sapporo (based on Suttner 1998, p 30, Clarey 2001, p 7)

Sponsorship and the Arts

Examples of cultural sponsorship can be found as far back as the 1950s Rowohlt, the

German publisher, allowed sponsors to place advertisements in its popular “RoRoRo” paperback book series In their advertisements, sponsors pointed out how, thanks to their support, the books were available to more people at lower cost (Dischinger 1992,

p 90) While corporate giving (as either patronage or sponsorship) has a long tradition

in the Anglo-Saxon world, cultural sponsorship only became a mainstream phenomenon throughout Europe in the early 1980s The need for cultural institutions

to look for funding sources beyond the state coincided with the demand of companies

to advertise to target groups which were elusive or hard to reach through their traditional advertising and sponsorship activities Sponsorship of the popular arts, especially music, is now a common practice and widely accepted among the target groups The intrusive character of commercial sponsorship is more critically regarded

in the more sophisticated and elitist arts (cf Hofmann 2002)

Sponsors Get Creative

A large share of the brand-building value of sponsorships lies in the mental link which consumer make between the sponsor and the sponsored entity (to be discussed in detail

in section 2.5) It was only a matter of time until companies that were not sponsors would start to associate themselves with events sponsored by other companies – often their fiercest competitors This practice, called ambush or parasitic marketing, made

its first appearance on a large scale at the 1984 Olympics, when – among others – film manufacturer Kodak tried to ambush Fuji’s sponsorship of the Summer Games While

Fuji was a worldwide sponsor of the Olympics, its competitor, Kodak, became

“sponsor” of ABC television’s broadcasts of the games and the “official film supplier”

to the U.S track team – at a much lower cost Through these activities, Kodak was widely perceived as a sponsor of the Olympics in the key United States market (Meenaghan 1996) Ambush marketing has become a major threat to the investments

of corporate sponsors As a consequence, organizations such as the International Olympic Committee IOC and FIFA (the World football governing body) have declared ambush marketing their enemy number one (IOC 2002, p 7.2)

Along with the growth of sponsorship came a new phenomenon Sponsors were no longer satisfied with putting up billboards and paying the bills of the events that they sponsored Instead of standing at the sidelines, they wanted to be center-stage So, they started their own, sponsor-owned events The Adidas Streetball Challenge is one of

many examples of large sponsors shaping events to fully match their communication needs In 1992, Adidas tested what it calls an urban culture program, a series of basketball competitions played in public squares in the centers of large cities, first across Europe, and later across the World In 1997, half a million players participated

in the various events of the Adidas Streetball Challenge The World finals in Milan attracted teams from 30 countries Adidas’ event series was so successful that it attracted other sponsors, including Sony, Sprite and MTV, and was covered by mainstream TV and other media (based on N.N 1994, p 43; Aaker and Joachimsthaler 2000, p 190 ff.)

and introduced in European markets after legislative changes in the 80s and 90s (Meenaghan 1998), can be regarded as a form of advertising rather than straightforward sponsorship, because in most cases there is no deeper associative link between the sponsor and the program However, in 1998 a new form of program sponsorship emerged with the launch of the American teen TV drama “Dawson’s Creek” which collaborated closely with J Crew, the clothing company It was the first big-ticket TV show which combined sponsorship, product placement, and endorsement in a large-scale and orchestrated manner The power of this new, fully integrated sponsorship execution was aptly described by one of branding’s most eloquent critics, Anne Klein (2000, p 42):

“Not only did the characters of ‘Dawson’s Creek’ all wear J Crew

clothes, not only did the windswept, nautical set make them look as if

they had stepped off the pages of a J Crew catalog, and not only did the

characters spout dialog like ‘he looks like he stepped out of a J Crew

catalog’, but the cast was also featured on the cover of the J Crew

catalog (…) – looking as if they had just stepped off the set of a

‘Dawson’s Creek’ episode.”

It may be disputed whether business corporations have a venerable history of corporate giving Recently however, they have increasingly sought an outright commercial return for monies previously donated through charity and philanthropy The resulting practice is called cause-related marketing and refers to situations where “companies

derive benefits, either in sales or image terms, from their involvement with a particular social or charitable cause” (Meenaghan 1998, p 10, based on Varadarajan and Menon 1988) American Express’ involvement with the restoration of New York’s Statue of Liberty provides an insightful example of how cause-related marketing works The sponsorship was designed as follows: Amex promised to donate one cent for each US-based transaction and one dollar for each new card issued during the last quarter of the year Amex had three objectives for its involvement in the project: motivating Amex card-holders to increase card usage, encouraging merchants to accept the card, increasing its profile and deriving image benefit During the period of the sponsorship, card usage increased 2.8 percent, and greater acceptance by merchants was also reported Amex was, furthermore, perceived as a responsible, public-spirited and patriotic company (Meenaghan 1998)

The Future

What is next? Current developments show that sponsorship is hardly slowing down Indeed, the proliferation of sponsorship has reached a stage of acceleration never seen before Today, anything and anybody is sponsored: from buildings to lifestyles from causes to research (cf Klein 2000) It appears that for many events commercial sponsorship has become something like a quality label: if a happening does not receive the support of sponsors, something must be wrong with it Hoek (1999) argues that because sponsorship’s ability to reach consumers at leisure is unchallenged, that feature alone will lead to further strong growth in sponsorship expenditure In line with this view, one of the main growth areas has been the sponsorship of sports venues

Companies such as FedEx, Philips, and American Airlines have all acquired long-term naming rights for prime sports venues The list is headed by energy provider Reliant The company paid USD 300 million for a 32-year NFL stadium sponsorship in Texas (Bonham-Group 2003)

Sponsorship Growth in Figures

The global spread and development of sponsorship is reflected in double-digit annual growth rates over the last decades Why has this growth occurred? In the following sections, an attempt is made to explain the phenomenon

Worldwide Sponsorship Expenditure

Worldwide sponsorship expenditure has grown dramatically over the last 20 years and

in 2001 tipped the scale at USD 26 billion investment in sponsorship rights (SRI 2001) Since 1984, sponsorship rights expenditure has grown at the rate of 16 percent, equaling roughly five times the growth of the world’s economies (Figure 2)

CAGR E 2001–2005

13%

15.1

Figure 2: Worldwide sponsorship rights expenditure 1987-2005E Source: SRI 2001

It is important to note that these figures represent only the investments in sponsorship rights, and do not include further expenditures which companies

undertake in connection with the exploitation of these rights (cf Cornwell and

Maignan 1998, p 1) It is widely estimated that, on average, companies spend an additional amount of roughly 1.5 to 2 times their initial investment on the execution of

the sponsorship and on integrating it with their other communication activities such as advertising and promotions (cf Bruhn 1997, p 49) This leads to a cautious estimate

of a total amount of nearly USD 40 billion of expenditure associated with sponsorship

in 2001

The lion’s share of world sponsorship expenditure originates in the Americas with 43 percent of the total, followed by Europe with 31 percent (corresponding to the year 2000) A closer look at the development of these relative shares shows that the Americas have only recently surpassed Europe During the new economy boom, America’s spending grew at a much faster rate than that of recession-plagued Europe (Figure 3) With the further development of emerging markets, mainly in Asia, future sponsorship expenditure growth is likely to come from those areas, while growth rates

in the Americas and Europe will depend on to the economic recovery in these regions (Meenaghan 1998, p 4 f.)

4,245

4,660 5,397955

7,413

1,075 1,090

6.1%

12.8%

2.4%

17.0%

Figure 3: Sponsorship markets and growth rates by region 1998-2000 Source: SRI 2001

The vast majority of sponsorship investment (69 percent) goes to sports, reflecting both the popularity of the sector as a leisure activity and the fans uncritical embracing

of commercial activities (see Figure 4) Of the 15 percent which goes to the arts, the lion’s share is absorbed by sponsorships of popular music While sponsorships of the

“high arts” (defined as, e.g., classical music, opera, theater, dance, literature and art exhibitions) may provide access to carefully defined groups of people at the upper end

of the social classes, and corporate decision makers in particular, only popular music is able to generate mass audiences similar to those of sports Meenaghan (1998, p 9) notes that “popular music, with its broad appeal to youth markets, its excitement and imagery, is a mass-marketer’s dream.” At 12 percent, broadcast or program sponsorship is almost as popular as sponsorship of the arts Sponsorship of other proprieties, such as causes or NGOs, account for the remaining 4 percent

69 15

12

4

Others Broadcast

Arts

Sports

Figure 4: Breakdown of sponsorship rights expenditure (percent) by sector Source: SRI 2001

Reasons for Sponsorship Growth

The powerful and continuing growth in sponsorship rights expenditure can be attributed to a number of factors, both on the demand (sponsor) and supply (sponsee) sides (Figure 5)

Demand Side

Sponsors

Reasons for Sponsorship Growth

• Need of companies for

closer interaction with

(potential) customers

Supply Side

Sponsees

• Government policy on subsidies

–Withdrawal of the public sector from cultural and sports activities

• Increased need for funds due to higher standards, e.g.,

–Higher safety requirements –Professionalism en lieu of volunteer work

• Co-marketing opportunities –Wider reach (publicity) –Strengthening of sponsee brand through co-branding

Figure 5: Forces behind sponsorship growth Source: own illustration, partly based on Meenaghan 1983

Demand side factors

The main contributing factors on the sponsors’ side are the escalating cost of advertising space along with a simultaneous decrease in advertising efficiency, advertising bans for certain industries and the companies’ wish to interact more directly with their customers

Advertising costs have sky-rocketed over the last decades, mainly due to the larger

number of advertisers and increasingly fragmented media usage of target groups (Levermann 1998, p 18) At the same time, advertising efficiency has decreased

This means that not only is it harder to reach (i.e., provide a brand stimulus to) potential consumers, but that consumers do not respond to the advertisements as they used to, as they are showing signs of numbness The average consumer in Germany, for instance, is estimated to be exposed to between 200 and 2,000 commercial messages (depending on the source) – a number that has literally exploded over the last decades (Ernd 1993, p 139; Meyer-Hentschel 1996, p 12; Nickel 1997, p 59) Furthermore, media consumption has dramatically changed (Erber 2000, p 51 f.) Take the case of television Morgan (1999, p 14 f.) argues that, increasingly, the medium is used not as a source of information, but merely as a relaxing device Advertisers, he argues “are no longer in the communication business, they are in (…) the nuisance business” (cf Ernd 1993, p 19) A regularly conducted survey by the

British Newspaper Advertising Bureau shows that adult evening TV viewers able to correctly name a brand or product advertised in the show that they just watched decreased from 34 percent in 1965 to 8 percent in 1990 (quoted after Morgan 1999, p 17) It is therefore no surprise that marketers look for new ways of communicating to their consumers, preferably in an environment in which they would react positively to their messages, i.e., perceive, understand, elaborate, and remember them (Tomczak, et

al 1995, p 12)

Meenaghan (1983, p 13) links the first phase of major sponsorship growth in the UK

to the banning of cigarette advertising in 1965 (and later alcoholic beverages)

Sponsorship was not only one of the few available mass communication channels for manufacturers of self-destructive products (harmful or fatal to health) to link themselves with socially desirable activities but it also improved the public’s perception of their corporate brands

As the number of brands competing for attention in the market place has exploded in the last two decades, marketers have realized that providing extensive information, especially using media advertising, cannot duplicate the impact of customers’ personal experience with a brand A number of powerful brands, among them Swatch, Hugo Boss, and The Body Shop, have succeeded in building a very loyal customer base largely through the use of non-traditional media (Joachimsthaler and Aaker 1997, p 14) Event sponsorships provide a fruitful base on which to build a branding platform in which consumers can actively participate

Supply side factors

In the hay days of the Thatcher administration, Meenaghan (1983, p 13) noted that

“in a climate of increased economic austerity government financial cutbacks in

‘marginal’ areas have created a vacuum which many larger companies have been willing to fill.” A slow but steady withdrawal of the public sector from cultural and from sports activities has since been observed in other countries, too This has not

only resulted in the need for events and cultural institutions to look to the private sector for funding, but has also helped the proliferation of a “pecunia non olet” view of the public in embracing many previously commercial-free areas by sponsors

Not only do public sources of funds run dry, there is also increased demand for additional funds In today’s heavily regulated and – in some countries – litigious

environment, the staging of an event is getting considerably more expensive At the same time, events have expanded the services they offer to participants and spectators

At the Olympics, for instance, all athletes receive not only free accommodation and food but also free air travel from their home countries to the event (IOC 2002) A further cost driver can be identified in the crowding-out of volunteers by professionals

in many sport organizations such as governing bodies (e.g., FIFA, IOC, UCI) and clubs

Lately, the question of co-branding has started to occupy event organizers’ minds Partnering with strong sponsors enables events to significantly raise their profiles and may help acquire additional sponsors (Interview with Erwin Flury, 2003) Also, in many cases, sponsorships provide sponsees with access to sponsors’ communication channels and customer bases, thereby multiplying their publicity reach

2.1.2 Review of Sponsorship Definitions

As mentioned in the previous section, sponsorship has steadily developed over the past decades and adopted various forms along the way Consequently, historical definitions

of sponsorship (an overview of which is presented in Figure 6) must be seen as an attempt by practitioners and researchers to adequately describe an empirical phenomenon they were witnessing As was just implied, it must be noted that it were

in fact practitioners who supplied not only the earliest, but also very adroit and useful definitions This may be a consequence of the fact that the sponsors and sponsees felt a need to codify their activities, as they quickly pushed deeper and deeper into territory which, up to then, was widely regarded as off-limits for commercial activities

Year Author Definition Critical assessment

1971 UK Sports

Council

“A gift or payment in return for some facility or privilege which aims to provide publicity for the donor.” (quoted according to Meenaghan

1983, p 8)

Too narrow “Gift” is an inappropriate term in combination with “in return”

Publicity is not only aim

1983, p 8)

First time commercial benefit was recognized as general sponsorship aim “Independent activity” and

“not intrinsic” are too limiting

1977 Waite “(1) A commercial organization (sponsor)

provides resources for the benefit of a leisure activity (sponsored)

(2) The sponsor does so with the expectation

of gaining some commercially valuable benefit

(3) The sponsored activity consents to the sponsor company using a facility it has to offer in exchange for the resources it accordingly receives.” (Waite 1979)

“Leisure activity” does not account for other sponsees, e.g., environmental causes Sponsorship does not always consist of a “facility”

to be used

1977 Simkins “ (1) A sponsor makes a contribution in cash

or in kind (…) to an activity which is in some measure a leisure pursuit, either sport or within the broad definition of the Arts

(2) The sponsored activity does not form a part of the main commercial function of the sponsoring body (…)

(3) The sponsor expects a return in terms of publicity.” (quoted according to Meenaghan

1983, p 9)

“Leisure pursuit” excludes other common forms of sponsorship (see above) Sponsorship may very well form “a part of the

commercial function”

“Publicity” may not be the only aim of sponsorship

1983 Meenaghan “The provision of assistance either financial

or in kind to an activity by a commercial organization for the purpose of achieving commercial objectives.”(Meenaghan 1983, p

9)

Not only commercial organizations can be sponsors, e.g., non-profit organizations, individuals

1985 Von Specht “(1) The provision of money or in kind

assistance by a company (…) The sponsee

is a person, group of persons or institutions within the areas of sports or culture

(2) The sponsor (…) receives previously defined services in return These services (…) contribute directly or indirectly to the marketing objectives of the company The support of the sponsee can only be regarded

as a by-product of the engagement

(3) Sponsorship is a distinct marketing instrument (…)2 (v.Specht 1984, p 4)

Definition excludes other common forms of sponsorship (see above) First author to define sponsorship as a distinct marketing instrument

1986 Bruhn “Planning, organization, execution and

controlling of all activities which relate to the provision of means by companies for persons and institutions from the areas of sports, culture and the social sector to attain entrepreneurial marketing and communication goals.”3 (Bruhn 1986, p 3)

Process view not helpful

No specification of means Sponsors and sponsees too narrowly defined (see above)

Fittingly defines goals as serving “marketing and communication” purposes

1987 Gardner/

Shuman

“Investments in causes or events to support corporate objectives (e.g., enhance company image) or marketing objectives (e.g., increase brand awareness), and are usually not made through traditional media-buying channels.”

(Gardner and Shuman 1987, p 11)

Sponsor not and sponsee too narrowly defined Acknowledges that sponsorship objectives may

be outside the marketing realm

2 Translated from original German version by the author

3 Dito

1989 Drees “The provision of money, in-kind or services

by the sponsor to a selected sponsee with the aim of utilizing this engagement with its defined counter-services by the sponsee for defined, mostly communicative goals.” 4

(Drees 1989, p 16)

Broad definition makes it suitable for any form of sponsorship

Does not provide definitions

of the sponsor and sponsee

1991 Meenaghan “Sponsorship is an investment, in cash or

kind, in an activity, in return for access to the exploitable commercial potential associated with that activity” (Meenaghan 1991a, p 36)

First modern-day definition Broad definition makes it suitable for many forms of sponsorship

Stresses commercial exploitation

associated with that property.” (quoted according to Roy 2000, p 19)

Most widely used definition

by practitioners Draws heavily on Meenaghan’s definition

Figure 6: Overview and critical review of sponsorship definitions

Among the early definitions, Meenaghan’s (1983, p 9) is cited most often: sponsorship is “the provision of assistance either financial or in-kind to an activity by a commercial organization for the purpose of achieving commercial objectives” Meenaghan, while not the first to point out the commercial aims of sponsorship, formally introduced the term “commercial sponsorship” in an attempt to clearly distinguish his definition from the term patronage In 1991, he supplied a more generalized version of this definition which leaves the nature of the sponsor open This view has found its way into most contemporary definitions of sponsorship Given the fast pace in marketing practice and research, the longevity of Meenaghan’s early definition is remarkable

The authors reviewed in Figure 6 have been influential in developing one of today’s most widely used definitions of sponsorship: “The relationship between a sponsor and

a property, in which the sponsor pays a cash or in-kind fee in return for access to the exploitable commercial potential associated with the property.” It is provided by the

4 Dito

International Events Group (IEG, 2003), one of the leading (and few) sources of information for the sponsorship industry (cf Roy 2000, p 19)

A key factor in defining sponsorship seems to be neglected in all of these definitions: sponsor and sponsee enter a contractual relationship (e.g., Drees 1989, p 93 f.;

Bruhn and Mehlinger 1999) The legal aspect is highly important in the context of the event site exploitation of sponsorships As sponsors become more active in shaping the events that they sponsor, the more carefully the relationship must be governed For the remainder of this thesis, the following broad definition of commercial sponsorship will

be adopted It consists of four distinguishing elements:

the right of association with the sponsee

(4) To attain specific commercial goals (e.g., marketing communication, improving customer

relationships)

After reviewing what sponsorship is, it also important to point out what it is not It is

especially important not to confuse sponsorship with other traditional corporate or private activities such as patronage or philanthropy, both of which are based on

charitable, altruistic activities – with no strings attached, because there is no exchange

of rights (Javalgi, et al 1994) Meenagahan (1983, p 11) identifies two factors that

distinguish sponsorship from various forms of corporate giving: the type of recipient activity and the motives for involvement The later appears to provide the most rigid distinction The acid test is to see whether the donor is prepared to give support anonymously The distinction between sponsorship and patronage is often not made by corporations (which in some cases summarize both under ‘corporate affairs’) and in public discussions (cf Hofmann 2002, p 99)

A term closely related to sponsorship is endorsement Endorsement specifies the situation where an individual performer, club or organization is paid a fee to use specified products (Meenaghan 1983, p 10) Endorsements are normally undertaken in

conjunction with sponsorships In fact, they are so closely related that, for example, the German terminology and literature does not even make a distinction between the two

2.1.3 Advances in Sponsorship Research

When reviewing the advances in sponsorship research, it is useful to keep in mind the relatively newness of the discipline Sponsorship practice has evolved and changed so many times since its early days that researchers have struggled to keep up with its developments (Meenaghan 1998)

In an extensive and almost comprehensive review of more than 80 articles from the English, German, and French-speaking research communities, Cornwell and Maignan (1998) identified five main research streams, which are summarized in Table 1 Minor additions were made to this excellent basis where deemed necessary One the one hand, this included adding authors in order to fill the gap between 1996 (the year up to which the review is current) and today On the other hand, one particularly substantial piece of research by Anne and Chéron (1991) appears to have been overlooked by the authors

Research topics Main contributors

(in chronological order)

Nature of sponsorship Definitions of sponsorship,

identification of characteristics, development of sponsorship in specific country or area

Meenaghan 19835 Hastings 1984 Gross, et al 1987 Meenaghan 1991b

Managerial aspects of

sponsorship

Corporate motivations and objectives with respect to sponsorship, description of target audiences and media objectives

Mihalik 1984 Abratt, et al 1987 Gardner and Shuman 1987 Armstrong 1988

Crowley 1991

Measurement of sponsorship

effects

Examination of communication effectiveness and sponsorship effects, determination of causal relationships between

sponsorship stimuli and

Otker and Hayes 1987 Ryssel and Stamminger

1988 Anne and Chéron 1991 Pham 1991 and 1992 Gwinner 1994

5 Confusingly, Tony Meenaghan published his ground-breaking paper in 1983 under his full name John Anthony

Meenaghan, His later and current work appears under the name Tony Meenaghan

consumer perception Rajaretnam 1994

D'Astous and Bitz 1995 Hansen and Scotwin 1995 Bennet 1999

Gwinner and Eaton 1999 Pham and Johar 2001

Strategic use of sponsorship Predominantly analysis of

ambush marketing practices

Sandler and Shani 1989 Meenaghan 1994

Legal and ethical considerations

in sponsorship

Legal constraints and tax implications of sponsorships, use

of sponsorships to promote products detrimental to health (tobacco, alcohol)

Ledwith 1984 Aitken, et al 1986 Townley 1993 Wise and Miles 1997 Bruhn and Mehlinger 1999

Table 1: Streams of sponsorship research and main contributing authors Source: based on Cornwell and Maignan 1998

The historical development of the research streams can be readily derived from this overview As with any new research topic, authors in the early days (i.e., 1980-1988) were primarily concerned with descriptive research into the nature and managerial aspects of sponsorship, trying to get to grips with the subject A key question for these researchers was why sponsorship should be chosen over other forms of marketing communication, especially advertising At the time many authors could not satisfactorily answer the question, but rightfully pointed out the (ab-) use of sponsorship to fulfill prestige goals of top management From today’s perspective three main characteristics of sponsorship vs advertising which are supported by the contemporary literature are worth mentioning: Most importantly, sponsorship is able

to cut through media clutter to get the attention of the consumer – and the consumer receives the commercial message in a positive mood state (e.g., Gardner 1985; Pham 1992) Second, with sponsorship the message and the medium are closely linked (e.g., Meenaghan 1996) Third, sponsorships can target multiple audiences at the same time (e.g., Crowley 1991; Aaker and Joachimsthaler 2000) However, there is still no clear and decision-oriented framework for choosing between advertising and sponsorship This descriptive phase lasted until the early nineties, when researchers turned their interest to ambush marketing The legal and qualitative aspects of this practice were a prime object of research following the games in Los Angeles, Seoul and Calgary, where parasitic advertising first appeared on a broad scale

Discussion about sponsorship ethics needs to be seen in the light of legislative efforts

to ban sponsorships which promote products such as (mainly) tobacco – and to some extent also alcohol As discussed earlier, the ban on advertising these products is often credited with contributing heavily to the proliferation of sponsorship as a means of marketing communication

Since the early and mid-nineties however, researchers are mainly concerned with the

measurement of sponsorship effects Two aspects are of special interest:

measurement of sponsorship efficiency and identification of the causal effects of sponsorship on sponsors’ brands – the area to which this thesis also hopes to make a contribution

Measurement of sponsorship efficiency

Many authors underline the need for companies to install proper controlling instruments Firms are criticized for often operating with exposure-based measurements such as media reach while neglecting more precise tracking measurements, which measure changes in brand equity induced by the sponsorship

Measurements generally proposed for the latter are awareness of the sponsorship engagement, general awareness of the brand, and image dimensions of the brand; these items are to be evaluated on a regular basis (e.g., Quester and Farrelly 1998) Otker and Hayes (1987) were the first to present the findings of a broad sponsorship efficiency study, which focused on tracking measurements It found that Philips’ (the Dutch home electronics manufacturer) sponsorship of the Football World Cup 1986 had a positive impact on the association between Philips and football in general, but did not have a significant effect on the awareness or the image of the Philips brand

Effects of Sponsorships on Brand Equity

The argument about how to best measure sponsorship was followed by a quest to

determine the nature of sponsorship effects and the factors which might influence

them The key constructs in this area of research are image transfer, consumer involvement and fit between sponsor and event In this section only a brief introduction is given, as the topics will be discussed in greater detail at the end of this chapter

Researchers of image transfer look at how an association is forged between the

sponsored entity and the sponsor in the mind of the consumer, which leads to a transfer