Sports sponsorship vs. advertising

Advertising delivers a clearly defined message in a very controlled environment. It communicates an exact message in a pre-defined schedule of where and when it will appear. This makes determining exposure relatively easy. However, advertising is non-interactive. Although the target audience may hear or see an ad, the brand does not become part of the fans' experience.

By contrast, the message a sponsorship delivers varies by each and every fan based on his or her impression of the event. But what sponsorship does provide are many opportunities for exposure, including promotional materials for an event, signage, JumbotronsTM, on-site booths, cups and servicing items, premiums/give-aways and verbal mentions by commentators.

Marketers turn to sponsorship to develop a heart/mind connection. By leveraging the emotional power of a personality, sport or event, a sponsor can create a strong tie between his brand and the fans. The frequent appearance of a brand name or logo establishes the company as part of what that personality, event, or league represents. Sponsorship usually creates a stronger tie with fans than advertising.

36% of sports fans in America can name at least one advertiser associated with the top 20 sports leagues. Only 17% can name a sponsor. So which creates the better ROI - advertising or sponsorship? That depends on your objectives. Brand managers and marketers first need to determine the role event and sponsorship marketing plays in their company's integrated marketing communications plan.

Selecting a sponsorship involves more than just finding one that fits into the marketing budget. The type of sponsorship - e.g. league or athlete ? - will have a substantial impact on its ultimate effectiveness. Among Americans, event sponsorship makes a much stronger statement than athlete sponsorship. In fact, our evidence is that despite the vast amount of dollars invested in them, athlete sponsorships generate the least impact.

This choice of event, league or athlete sponsorship is critical. First, the liaison has to be credible for the target market - and it must be positive. For instance, with questions about illicit drug use currently plaguing USA Track and Field, a company that sponsors this property could not only confuse fans but may also generate negative impressions of their brand.

Quantifying ROI

There is a long-running debate about whether or not the impact of sport sponsorship can be accurately quantified. We believe it can. To make it all worthwhile, a sponsor has to know the value his investment created. Not only does measuring ROI provide an assessment of what has happened, it also provides a useful negotiating tool when future sponsorships are being considered. For example, the NFL uses ROI measurements when valuing and negotiating sponsorships. Their most publicized deal is their eight-year, $ 384 m Gatorade sponsorship, the second largest in U.S. sports sponsorship history.

To compare the effectiveness of a sponsorship against other marketing activities, a comparable ROI is required - and the evaluation process is similar to that used for advertising. Sponsorship ROI measurement consists of three elements: media exposure, awareness and purchase, and commitment. The weight of these three elements varies by the sponsorship's scope and duration. For U.S. based sponsorships, awareness is often the key element, followed by commitment and brand usage, and finally media exposure. In general, sponsorships take about three years to mature i.e. a successful sponsorship shows increases in brand awareness and commitment by the third year. For one-time events, awareness and media exposure are the key aspects since commitment is not built with single events.

Media exposure is the most common method used to measure ROI. It benchmarks a dollar value on your sponsorship, and includes television, news/promotional segments, print, on-site, radio and any international audience data. However, when evaluating sponsorships, it is important to note that 15 seconds of logo exposure creates a smaller dollar value than 15 seconds of advertising.

Measuring media exposure has traditionally been done by individuals looking and listening for brand names or company logos on signage at stadiums, JumbotronsTM, team marks, verbal mentions and event materials. However, today's newest and most sophisticated method to determine exposure uses digital technology. This provides faster and more reliable information because it eliminates the human error. It also provides a better range of coverage including logo position and size - and can even measure exposure time to a hundredth of a second.

To calculate the potential sales value generated by a sponsorship, the awareness level of the brand is multiplied by the fans' actual purchase or intent to purchase ratio. The types of questions asked to determine awareness include overall awareness of a league or event, category awareness, and the brand image associated with the sponsored team, player, event or league.

Commitment is the final factor in the calculation of ROI. Stronger than satisfaction or loyalty, commitment is a measure that combines both attitudes and emotion and has the ability to predict future behaviour. It determines the strength of the relationship between a consumer and a brand and is a key element in brand building. Commitment measures enable a sponsor to answer questions like:


• which sponsorship creates the strongest relationship with my target customers?


• which sponsorship has the greatest potential for attracting new customers?

The more committed a fan is, the more he or she is prepared to spend. It is possible to calculate the financial impact of sponsorship activities by analyzing the average expenditure for each commitment segment.

Measuring each of the factors in an ROI evaluation independently is necessary in effectively managing your brand communication. When these elements are combined, the result is a wide-angle view of sponsorship that includes opportunity as well as attitudinal, emotional and behavioural measures.