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The effects of sponsorship

Sponsorship has developed into a sophisticated communications tool from humble beginnings. What was once little more than an opportunity for advertising and corporate hospitality in the 1970s, is now a way of achieving a number of marketing and corporate communication objectives (Masterman,2007, pp.11 ). Even though sponsorship has been recently that much developed, in fact it dates way back into history; actually it dates from Ancient Greece and Rome. Roman history shows us that the use of events for political purposes was widespread, the extend to which this was the case is obvious by the fact that in 63BC the sponsorship of events had to be regulated. (Masterman,2007, pp.12 ) It is apparent that during these years both individuals and organizations have contributed in various organizations for the good of society. For that , however, it is also obvious that they have required a return on investment. On the other hand it should be noted that not all sponsorship types work as a marketing communications tool . “Cause-related sponsorship is a form of public relations rather than a replacement for advertising; In cause-related sponsorship the sponsor will give money or in kind sponsorship to “good causes” in exchange for an association with the good cause, and any positive image held by the consumer about the event or charity” (Bennett and Sargeant, 2005). But how much has sponsorship really developed?

There is a growing demand for events to sponsor, which has led to the formation of new sponsorship opportunities in sectors beyond the traditional spheres of sports and the arts (Meenaghan , 1998). Between 1984 and 1997, worldwide expenditure on sponsorship as a corporate communications medium, increased from $2 billion to $18.1 billion(SRI, 1998) Accordingly, in the UK sponsorship market grew from 4 million pounds in 1970 (Buckley) to an estimated 1996 valuation of 491 million pounds (Mintel, 1997). The 1984 Olympics in Los Angeles was the start of a new era ; These Games were entirely commercially funded by the private sector , made a profit of $215 million (Catherwood and Van Kirk, 1992) and moreover gave the opportunity to many event organizers and sponsors to familiarize with the sponsorship’s effects. The consequence was a growth of new types of sponsorship rights and the beginnings of new thinking about the objectives for sponsorship. (Masterman, 2004). Advertising as the main method of marketing communications seeks to influence brand image through both the message content and media/media vehicle elements of the advertisement. In the case of sponsorship both the media and message aspects are interwoven with the message implicit in the perceived personality attributes of the sponsored event or activity ( Meenaghan and Shipley, 1999 ). One of the most frequently seen, type of sponsorship is the event related sponsorship of sports and arts events ( Rowley and Williams, 2008). Corporate event sponsorship has become increasingly popular as a marketing communications vehicle (Cornwell and Maignan ,1998) and this paper is concerned mainly on this industry.

With the arrival of television and television commercials, in 1941 in the USA , came new opportunities for advertisers to reach wider and larger audiences, especially in the International event industry. The reputation of sport was an attractive television programming proposition and so as more sports events were broadcast , the bigger the interest became in the use of sport as a means for brand promotions (Masterman, 2004 ). In 2002 more than 70% of sponsorship dollars were invested in sport and sports events (Crompton, 2004). Obviously, one of the most important reasons for the increase in sports sponsorship is that sport sponsorship can reach large and diverse audiences – with typical example the 37 billion television viewers of the 1998 FIFA World Cup (Lardinoit & Derbaix, 2001).

From an academic perspective , sponsorship has been a subject of attention for scholars since the early 1980s. All this time-consuming research has added to a rather broad understanding of the goals , decision-making process, and performance measurement issues relating to sponsorship(Cornwell and Maignan, 1998). According to Bal, Quester and Plewa (2009) academics firstly investigated the tenets of sponsorship persuasion through a cognitive lens; Using associative learning (Javalgi et al, 1994), meaning transfer (McCracken, 1989) or image transfer (Gwinner and Eaton, 1999) . More specifically, many scholars have attempted to evaluate sponsorship effectiveness like : Copeland et al in 1996, Cuneen & Hannan in 1993, Irwin & Sutton in 1994, Lardinoit & Derbaix in 2001, Levin et al in 2001. However, most have concentrated mainly on the use of a single variable, such as consumer awareness or effect of sponsor image as a forecaster of sponsorship effectiveness (Meenaghan, 1998); like Pope and Voges in 1994, Stotlar in 1993, and Turco in 1994. This paper will try to show most of the variables for sponsorship effectiveness, investigating some sponsorship examples from the Event Industry.

“Sponsorship can be defined as an investment in cash or kind in an activity , in a return for access to the exploitable commercial potential, associated with that activity. The company promotes its interests and brands by tying them to a specific and meaningfully related event or cause”( Pelsmacker et al, 2001, pp. 293). In addition, Meenaghan and Shipley(1999) offer a more specific definition of event sponsorship; they define event sponsorship as: “the right to associate with the profile and image of an event and to exploit this association for commercial ends.(Meenaghan and Shipley,1999, pp. 328).

It has been around 40 years now, since sponsorship has developed to provide an integrated way of achieving a number of marketing and corporate communication objectives, including driving sales, developing favourable brand associations and awareness, awareness of corporate image , and internal relations development ( Masterman, 2007, pp.24 ). Consumer sponsorship now represents one of the most rapidly growing and perhaps interesting areas of marketing activity. (Meenaghan, 1998) Today it is quite frequent to hear sponsors and event owners refer to one another as marketing partners reflecting the reality of longer-term , closer and more positive relations between the sponsorship parties (Meenaghan, 1998). Surveys conducted among American and European firms have found that sponsorship investments generally pursue two main objectives: increasing consumer awareness and improving corporate image(Armstrong, 1988 .Gwimmer,1997 ) . Keller( 1993 ) , defined brand awareness as “brand recall and recognition performance by consumers” (Keller, 1993, pp .2). Recall increases as a function of duration of exposure to sponsors, previous brand awareness of sponsors, message length and design, sociodemographic variables of the spectators and interest in the event sponsored (Walliser,2003). Corporate Image on the other hand is defined as “the impressions of a particular company held by some segment of the public”(Johnson and Zinkhan, 1990, pp. 347).Although enhancement of corporate image is one of the most important communication objectives for corporate sponsors(Javalgi et al, 1994), image-related evaluation has received once again considerably less research attention(Turco, 1995).

According to Pelsmacker et al. (2001) other main reasons why companies use sponsorship in their marketing strategy are: to increase profit over a short period; to achieve larger market share; and to reposition the brand /product in the minds of consumers (Pelsmacker et al, 2001 ),by earning goodwill for entering into a commitment on behalf of a cause outside itself, which is really important to people (McDonald, 1991). In addition, companies may use sponsorship to: eliminate any negative feelings that consumers may hold about the brand/company ; and propose a link between the event and the brand (Fill, 2005) . For example in sports, sponsorship entails recognition of a company with a specific sport, team, or player. In addition, the sponsor can be linked with a place. For example, the Utah Jazz basketball team's home site is known as the Delta Center, after its sponsor, Delta Airlines ( Nichols, Roslow, Dublish, 1999). Another important effect of sponsorship is the consumers’ purchase intention(Claussen, Kim,Kim, 2008)According to MacKenzie and Lutz (1989), attitude towards advertising is one of five antecedent variables (ie: credibility, perceptions of ads, attitude towards the advertiser, attitude towards the advertising and mood) that may influence attitude towards a specific advertisement. Attitude towards the advertising then has a significant and positive influence on attitude towards the brand.

Many authors consider brand sponsorship of arts , and music events even as a way of embedding brands in cultures and the processes associated with the experiential scope of consumption (Holbrook and Hirschman, 1982). More specifically, according to Hackley and Tiwsakul ( 2006) “brand exposure in popular entertainment confers ‘coolness’ on the brand and enhances the realism of the entertainment setting”(Hackley and Tiwsakul, 2006,pp. 65). Furthermore, sponsorship, when is undertaken on a large scale , automatically confirms the prestige values of a company : size, financial muscle, international status. (McDonald,1991), which also forms another important effect for the sponsoring company. Additionally , according to Wright ( 1988) the association between the sponsor and the sponsored entity is long lasting, even when the sponsor withdraws. Thus, there could be some revolutionary benefit linked to sponsoring, at least as far as the consumer recognition is concerned. Therefore , according to McDonald, (1991) we understand that sponsorship promotes the sponsoring company, and it is intended to do so. In other words it is a promotional spend, intended to achieve a marketing objective and an alternative to other ways of spending marketing money; Most of the companies would certainly agree that the benefit to themselves as well as to the cause should be planned and evaluated no less carefully than other marketing spending do .

It is far from obvious how sponsorship “works” on a company image : not nearly so straightforward as advertising. As far as one can judge from what has been published , very few companies have made serious attempts to develop this understanding or to reflect it in measurements they take (McDonald, 1991 ). According to Nelson Elizabeth, the cost of research in relation to particular sponsorship spends often appears to be relatively high , compared to the equal cost of researching media advertising , for example. Another reason why not sufficient research has been conducted on the topic, is that since it is difficult to see, conceptually, how sponsorship works for the sponsor’s image , people have difficulty visualizing it and they tend to believe that it cannot be measured; As Nelson keeps on arguing “There is also a strong body of opinion in marketing circles that sponsorship can not be monitored”. Even though, Marketers see sponsorship as something different from advertising , there has been no general clarification of how sponsorship differs from advertising and what this implies in terms of how to make sponsorship accountable. (Harvey, 2001).

Probably the most trustworthy measurement service in the field, at least in the United Kingdom, is the RSL Sponsorship Tracking Study. This “monitors the effectiveness of sponsorship every single week of the year and currently evaluates the performance of around 350 companies or brands on a spontaneous basis and 55 in considerable detail”(Parker, 1990). But the measures used by RSL , at least so far, have not progressed beyond wide measures of awareness and “favorability”. It is argued though, that these types of measure are not an alternate for the understanding of consumers’ perception and response. It is possible with simple 5 point scales to track, before, during and after the occurrence of a sponsored event , movements in awareness of which companies are sponsors, how familiar people are with each company and how favorable they feel towards it; According to RSL there are many examples where “favorability” was correlated with awareness of the sponsorship or of advertising , or both (McDonald, 1991 ) . In other words , the more people know that a specific company/brand is a sponsor, the more “favourable” they feel towards it. Thus , what these measures possibly indicate according to McDonald 91991), usually is that anyway a considerable group of people already approve of their sport or music concert, for example, being sponsored, and feel favorably disposed to the sponsoring companies; As more people have the sponsorship brought to their attention by publicity, they are reminded of something they already approve of; So, actually these measures are functional mainly as first –level data of the impact of the sponsor’s publicity (McDonald, 1991).

However, we need more than “favorability” if we are to understand how sponsorship may modify how people “see” a company. There is often an objective to improve some desirable aspect of image. Otker and Hayes ( 1987) list a number of examples of intended image transfer, including

This sport involves energy, energy is provided by Mars bars and Mars is sponsoring it;

-This sport is brought to you by video, Philips video cameras are recording it, and Philips is sponsoring it.

In other words, a synergy is sought between the event and the company values: if one can directly link the event to a product , so much the better. (McDonald, 1991).

Practitioners increasingly distinguish sponsorship as an reputable and effective method of marketing communications (Cornwell et al, 2001). There are many reasons for that. Firstly, brand insight and awareness is more effectively influenced by sponsorship than other marketing communications tools (Cornwell et al, 2001) since the brand is linked to an event held in high regard by the viewing audience (Crimmins and Horn , 1996). According to Kotler and Scheff(1997) brand perception is more effectively influenced by sponsorship because it is creating also an emotional tie with the consumer ( Kotler and Scheff, 1997) and moreover it is encouraged by the easiness with which arts sponsorship may obtain successful media coverage (Cowan, 2005). Hence, as Marketers have long assumed , we see that sponsorship appears to have its positive business effects based on different cognitive processes than straight product-sell advertising. (Harvey, 2001).

The growth of the use of sponsorship as a communications tool began naively . Advertisers initially saw value in sponsorship rights that included potential media exposure and at a cost that was less than advertising rates. But, whilst the visible cost of a sponsorship might appear to be small, compared to advertising, the true cost of a sponsorship is certainly much higher because the exploitation needed for success will require further investment (Davies and Quattrocchi, 2002). Inevitably, there is a negative impact of the sponsoring body’s objectives, on the artistic quality or autonomy of the sponsored events. (Butler, 2000). It is expected that in accepting private investment , artistic programming must consider not only the needs of the audience , but also those of the sponsoring bodies/sponsors, increasing the tension between the marketing concept and the “Romantic idea of the arts”(Lee, 2005, pp.292). To sum up, obviously, the benefits from sponsorship are difficult to be quantified in materialistic and indubitable terms. The results of the studies conducted in the past showed that to maximize sponsorship effectiveness, sponsors should go further than brand awareness efforts and develop more effective marketing strategies in order to enhance consumers’ positive perception of sponsor’s image. According to McDonald (1991) we are able to understand sponsorship’s effects and evaluate them. And since sponsorship needs to be designed with care and exploited effectively, people should know enough about it , about how people are likely to respond or about how sponsors want them to respond. Hence, there is a need for a better understanding of the mutual benefits of arts events sponsorship to sponsor and recipients and an improved understanding of the extent and nature of image transfer between the sponsored event and the sponsor brands ( Rowley and Williams, 2008). . So, hopefully, sponsorship will continue to be a major promotional tool for corporate marketers, despite the lack of publicly available measures of effectiveness.

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