Consumers’ Perceptions of Sponsorship Sources

ABSTRACT - Increasing interest by firms into the potential communication impact of sponsorship has resulted in considerable expenditures in this area, yet to be matched by equal levels of research into the effectiveness of this technique. This study aims to dispel some of the uncertainty by exploring the sponsorship history and motives of a particular firm, and examining empirically the outcomes of such investments. It is particularly revealing that the very high public visibility of the sponsorship activity itself appeared coupled with an almost general mistaken attribution, at the expense of the rightful sponsoring organisation, of the credit for the sponsorship.

Citation:

Pascale G. Quester (1996) ,"Consumers’ Perceptions of Sponsorship Sources", in AP - Asia Pacific Advances in Consumer Research Volume 2, eds. Russel Belk and Ronald Groves, Provo, UT : Association for Consumer Research, Pages: 13-18.

Asia Pacific Advances in Consumer Research Volume 2, 1996      Pages 13-18

CONSUMERS’ PERCEPTIONS OF SPONSORSHIP SOURCES

Pascale G. Quester, University of Adelaide

ABSTRACT -

Increasing interest by firms into the potential communication impact of sponsorship has resulted in considerable expenditures in this area, yet to be matched by equal levels of research into the effectiveness of this technique. This study aims to dispel some of the uncertainty by exploring the sponsorship history and motives of a particular firm, and examining empirically the outcomes of such investments. It is particularly revealing that the very high public visibility of the sponsorship activity itself appeared coupled with an almost general mistaken attribution, at the expense of the rightful sponsoring organisation, of the credit for the sponsorship.

INTRODUCTION

Sponsorship is a recent phenomenon, which appears to transcend national boundaries (Meenaghan, 1995), with Europe and the United States representing the lion’s share of worldwide investments, totalling 69% of total world expenditures in 1993 (Sponsorship Research International, 1994).

In most developed countries, sports and, to a lesser extent arts sponsorships, have dominated the medium (Mintel, 1993 and 1994). In more recent years, other activities, including broadcasting, have benefited from the popularity of sponsorship as a communication tool (IEG Sponsorship Report, 1994) and new forms of sponsorship, such as cause-related marketing, have also appeared to blur furthe the difference between sponsorship and philanthropy, with which it is sometimes mistaken. However, a commonly accepted definition is that sponsorship involves any " investments... in an activity... in return for access to... the commercial potential associated with this activity" (Meenaghan, 1991).

Investments in sponsorship are of such magnitude that it is now impossible to ignore this emerging communication tool. With total expenditures growing from a mere $2 billion in 1984 to $10.8 billion in 1994 and estimates for 1995 showing a 11 % increase over the 1994 level, sponsorship has become a major form of communication for many companies. In some industries, such as liquor or tobacco, it may even be the only available mass communication technique, as a result of legislative constraints.

This paper reports the results of a study undertaken collaboratively with a firm heavily involved in sponsorship. The study attempted to ascertain consumers’ aided and unaided awareness of the sponsorship role of the firm in a number of activities. After a brief review of the literature dealing with the issue of sponsorship, the objectives and details of the study will be presented. Results will then be discussed in the context of consumer behaviour and marketing communication theory. Finally, recommendations pertaining to the management of sponsorship programs and directions for future research will be proposed.

PAST RESEARCH

The dramatic growth of sponsorship expenditures may suggest a similar increase in the academic research dedicated to sponsorship. However, this is not the case. In addition to a number of papers dedicated to the particular challenge of defining what sponsorship is and, perhaps more importantly, what it is not (Head, 1981, Sandler and Shani, 1989, Meenaghan 1991), the literature has seemingly concentrated on determining the reasons behind the success of sponsorship as a communication tool (Hastings, 1984, Gardner and Shuman 1987, Mescon and Tilson 1987, Dearsley and Jones, 1990, Young 1991, Meenaghan 1991) or its prospect for the future (Parker, 1989, Smith et al. 1990, Survey 1990, Meenaghan, 1991), leaving aside its potential impact on the targeted audiences.

Authors have also explored the issue of sponsorship objectives, with most reported studies relying on interviews with sponsorship decision makers (Otker and Hayes, 1987, Abratt, Clayton and Pitt, 1987, McDonald, 1990, Hoek, Gendall and West, 1990, Crossley, 1991, Witcher et al, 1991). Many papers report a characteristic lack of audit activities with respect to sponsorship expenditures with 30 to 50 % of companies not measuring sponsorship outcomes (Amstrong, 1988, Abratt and Grobler, 1989, Sandler and Shani 1989, Witcher et al, 1991). Those firms evaluating formally sponsorship outcomes used a variety of techniques, including media coverage, expressed in terms of columns inches (Hulks, 1980, Tindale, 1990, Meenaghan 1991) or even sales monitoring, despite obvious limitations stemming from the number of other uncontrollable variables at play (Meenaghan, 1983 and 1991, Dearsley and Jones, 1990). Very few explored the potential changes in awareness and perceptions resulting from consumers’ interest in the sponsored activity (Mescon and Tilson, 1987, Smith et al, 1990).

THE STUDY

In order to explore the issue in more depth, the study investigated the particular history and decision-making process in existence in a prominent insurance company operating in South Australia. The main purpose of the study was to identify the managerial objectives of the company and compare them with measurable changes from the consumers’ perspective. Such comparisons have yet to be rigorously conducted before sponsorship can be considered a worthwhile communication technique. In particular, the issue of accuracy of consumers’ sponsorship source attribution remains to be explored. While the company involved in this study assumed that the public knew of its involvement in a number of sponsorship activities, there was also some doubt as to the extent of this awareness.

An internal investigative team of three middle management staff was therefore created for the purpose of an internal review of sponsorship operations and the author was invited to sit in on every meeting, comment and participate in the research design.

The initial phase of the study involved some desk research into the specific sponsorship activities undertaken in the past as well as a review of any policy documents mentioning sponsorship or stating the firm’s overt objectives in relation to its sponsorship decisions.

Face-to-face in-depth interviews were then conducted with members of the company’s Board, Executive and Senior management, with 4, 4 and 3 interviews conducted respectively. Board members interviewed included the chairman and deputy chairman as well as two commission members, the Executive included the chief general manager, the senior general manager (Insurance), the general manager (Corporate Services) and the group general manager (Hospital). The three management interviewees were the manager Public Affairs, the marketing manager and the manager Strategic Planning. All interviewees were given the opportunity to provide clearance to the transcripts of their interviews in order to ensure accuracy.

One dominant sponsorship activity, both in terms of expenditures and strategic purpose, was then identified and the research turned to assessing its specific outcomes, in relation to a stated public awareness objective. This was done through a large scale consumer survey in the Adelaide metropolitan area, investigating attitudes toward the firm as well as recall and accuracy of attribution of specific advertising campaigns based on that sponsorship activity.

TABLE 1

COMPANY SPONSORSHIP INVESTMENT IN 1991

TABLE 2

SPONTANEOUS AWARENESS OF SPONSORED ACTIVITIES

SPONSORSHIP HISTORY OF THE FIRM

Following a previously opportunistic decision making behaviour in relation to sponsorship, the company had reviewed its sponsorship practice in 1989. In particular, a formalised approval process was adopted such that sponsorship activities were categorised as either purely marketing orientated in the sense that the sponsorship activity could be seen as a vehicle used to maximise the firm’s exposure to a target audience or, alternatively, as more philanthropic in nature when the sponsorship activity fitted more into the role of good citizen, benefiting the community at large, which the company sought to play. Sponsorships falling into the first category were to be approved by the Board within the normal marketing budget annual allocation procedure whereas "Community Sponsorship" would be both initiated and approved solely at board level. In all cases, discussion with Corporate Affairs was required prior to any commitment of funds.

One of the expectation derived from this formalised process was the implementation of auditing activities based on media exposure (press, radio or television) and/or measures of exposure and recall of target audiences, and when possible, identification of additional business opportunities gained through the sponsorship.

In September 1991, the firm’s manager for Sponsorship and Promotions, following a request by the marketing group, stipulated three main criteria for undertaking corporate sponsorship. A good sponsorship program had to a) represent an alternative to straight advertising, b) contribute to business development and c) complement the "Good Citizen" identification.

A review of all sponsorship activities in effect in 1991 demonstrated some degree of variation amongst different programs. The firm’s involvement in a number of sponsorhip programs is summarised in Table 1.

As Table 1 demonstrates, the company was involved in a wide variety of sponsorships, spanning from trivial to substantial in terms of expenditures. Furthermore, some of these activities involved additional expenditures such as advertising, thus making particular programs even more expensive than suggested above.

The company had also undertaken in previous years a tracking study of consumers’ perceptions, conducted on a episodic basis and probing in particular into the spontaneous awareness of activities sponsored by the firm. Table 2 summarises the findings of this tracking research conducted from November 1989 to June 1991.

As can be readily seen in Table 2, the public’s perception figures suggest that much, if not all, of the firm’s investment in the area of sponsorship serves very little purpose in relation to its corporate image : Nearly three quarters of respondents are unable to name any cultural, sporting, community or educational activities supported or sponsored by the firm, despite the considerable expenditures involved.

THE MANAGEMENT PERSPECTIVE

While a detailed content analysis of the interviews is beyond the scope of this present paper and will be dealt with elsewhere, it is pertinent to note here that a number of common themes emerged as to how the firm should be conducting its sponsorship operations.

Most respondents stated that all sponsorship should fit the overall corporate objectives and relate in some ways to the core insurance business. The notion of returns or outcomes was also generally mentioned as important, but was cited along with a concern for a caring image and the need for social responsibility. Management also stated that the role of sponsorship had to be seen within the wider framework of marketing and should ultimately aim to create some degree of competitive advantage.

Several respondents also felt that a set of common criteria should guide the choice of any sponsorship activity and that each target market may need to be addressed with different sponsorship projects, each monitored in the light of its specific objectives.

Two respondents emphasised the need to generate sales, even when the hospitality or entertainment component of the sponsorship is seemingly dominant. Further more, the value of sponsorship as an internal means of creating or maintaining staff morale was also mentioned by one respondent.

Respondents of the initial executive survey agreed in general that the firm was facing particular challenges in relation to sponsorship. Firstly, they felt that the "culture" of the insurance industry was relatively hostile to very visible and brash undertakings in the area of marketing communication. Secondly, some felt that the internal "climate" of the firm was also unconducive to the company embracing an open sponsorship drive in the foreseeable future.

Lastly, the company functional division was such that marketing decision makers within the firm may be lacking an adequate understanding of their marketing tasks and, thus, may also fail to comprehend the role of sponsorship within the communication mix.

When asked to nominate which sponsorship component was most critical to the firm, a clear concensus emerged, supporting the selection of the single most expensive sponsorship program as the focus of further empirical investigation.

THE 1992 OMNIBUS SURVEY

That specific sponsorship activity, characterised by its high level of direct as well as related expenitures was thus selected for the purpose of the consumer survey. Part of the product-related category, this sponsorship program aimed to promote road safety and involved, amongst other things, financing a special education program for school students, delivered in schools by members of the police force. An advertising campaign, depicting the educational program, was produced and broadcast widely so as to inform the general population of the firm’s role in sponsoring this educational initiative. Another commercial, emphasising the penalty for drink driving was also developed and broadcast heavily over the same period of time, informing the public of the firm’s sponsoring role, which it shared equally with The Department of Transport, with respect to road testing.

The consumer survey aimed to explore the public’s recollection of the firm’s involvement in sponsorship and a total of 12 questions were included in an Omnibus survey of the Adelaide metropolitan area, gaining responses from a randomly selected sample of 400 people aged 18 and over. Sex and age profile of respondents were analysed and found to be representative of the South Australian population at large. The survey was conducted over a weekend in June 1992.

The 12 questions explored both general and specific issues in relation to the firm’s involvement in sponsorship, including for example recall of specific commercials as well as spontaneous recall of sponsored activities and general statements of attitudes about the company. When specific commercials were recalled, respondents were further prompted as to which organisation they thought had sponsored the activity depicted or mentioned in the advertisement.

General awareness of firm’s sponsorship

The June 1992 survey revealed some slight decline in relation to consumers’ general awareness of the sponsorship activities of the firm. Some 24.7% of respondents were able to nominate at least one activity, which compared unfavourably with a previous level of 25.3% in June 1991. This, however, followed heavy television scheduling of sponsorship-related advertisements in the three months leading to the survey, providing early warning signs as to the effectiveness of the communication campaign.

Sports sponsorship ranked highest amongst the spontaneously cited sponsored activities, with one in five respondents stating they were aware of the firm’s involvement in this area. On a more positive note, "road safety" experienced a considerable improvement with 6% of the respondents aware of the film’s sponsorship in June 1992 when only 2.7% of respondents of the June 1991 tracking survey were able to cite this as one of the firm’s undertakings.

Respondents were also asked to spontaneously nominate the type of sponsorship which they felt would be appropriate for the company. Only 60 % of respondents answered this question and of these, 41.1% nominated sports, a result consistent with the documented Australian interest in sporting activities. A distant second was road safety with 18%, followed by community service (9.5%). All other areas gained only negligible support.

These results changed dramatically when respondents were prompted in their answers as to what form of sponsorship would be more appropriate for a firm such as the one involved in the study. When provided with a showcard listing possible types of sponsorship, less than 5% of respondents would not name any and for those who did nominate an area, road safety and medical research dominated with scores of 90.5% and 80.5 % respectively. Sports and community services ranked also high with 56.4% and 46.6 %, respectively, of respondents citing them. Arts only gained support from one in five respondents.

Specific awareness of road safety sponsorship activity

Respondents were shown a photographic extract from the drink driving commercial and asked to state whether they could recall viewing th advertisement. The vast majority of respondents answered affirmatively (72.3%). Close to 21% said No while only 6.6% were unsure. However, when asked to name the organisation behind the campaign, the most frequently given answer, by almost half of the sample (49.4%) was The Department of Transport or The Government, followed by Police (20.2%) and thirdly the firm itself (17.5%). Considering that the true joint sponsors, The Department of Transport and the company both displayed a 2-seconds tag in the advertisement, it is worthy to note that the insurance company fared much worse than the Department of Transport, its co-sponsor, did.

Respondents were also shown a still picture from a television commercial relating to the road safety education program, also funded by the firm and were asked whether they could recall seeing it prior to the interview. Again, a very high proportion of respondents stated that they had seen it at least once (74.3%) against 20.7% who said they had not and 5 % who were unsure. Prompted awareness was highest among unmarried males (85.5%), respondents in the "other" category in terms of occupation (i.e. students and unemployed, 84%) and young couple or young family households (83.3%).

53.1% of respondents said they were unaware that the firm was sponsoring any such educational program prior to the interview, against 43 % who gave a positive response and 3.2% who were unsure. This compared well with previous tracking data where only 28.6% of respondents stated that they were aware of such sponsorship being undertaken by the firm in October 91.

As expected, awareness appeared to be assisted by exposure to the related commercial since respondents admitting to not having seen the commercial exhibited a much lower awareness level of 28.9% only.

While not as dramatic as in the drink driving campaign, there is, however, a significant discrepancy between the proportion of respondents recalling the advertisement and those correctly attributing the credit for the sponsored activity to its rightful source.

DISCUSSION

While the issue of sponsors’ mistaken identification has been raised in the literature under the name of Ambush Marketing (Sandler and Shani, 1989), it is usually seen as a strategy undertaken by an aggressive competitor setting out to "steal" the benefit of the sponsorship from its rightful source. Yet, the evidence provided in this paper shows that such mis-attribution may occur even when two co-sponsors share the same amount of airtime without any particular attempt by one to overshadow the other.

In this particular instance, respondents may have responded on the basis of whom they would have expected to sponsor rather than who they actually knew sponsored and this may have affected their ability to process the information provided to them by the content of the commercials. Consumers’ expectations have been shown to affect their perceptions in a number of studies (Tom et al., 1987, Helgeson and Beatty, 1987) and in the present case, may contribute significantly to the demonstrated inaccuracy of the public’s mistaken attribution of the sponsorship role.

The existence of this "incidental" or "involuntary" Ambush effect has been suggested elsewhere in relation to other forms of sponsorship such as Sport and Event-related sponsorship programs (Quester, 1996).

A number of consumer behaviour theories may be called upon to explain such inaccuracies of sponsorship source attribution. For example, it may be that the need for cognitive consistency requires that consumer overlook one of the sponsors in favour of the one(s) seen as more "logical" or "natural" for the type of activity sponsored. In the present case, The Department of Transport or The Police are both considered more likely sponsors and the public, therefore cites them more readily. Also, expected areas of sponsorship ted to reflect the Australian interest in sports and respondents tended to see a possible connection between the company and its sponsored activities only once they were provided with a show card. It is possible, therefore that a less philanthropic investment in any sporting activity may have enabled a more accurate recognition of the role of the company as sponsor.

In relation to marketing communication theories, one could argue that the order in which the sponsors were introduced in the sponsorship-related advertisements may have also greatly influenced the degree to which the audience recalled them. While both sponsors were given an equivalent airtime, a 2-second visual tag, a regency effect may have favoured The Department of Transport. It would fail to explain, however, how the Police, with no sponsoring involvement whatsoever in the educational program, could have ranked as second most likely sponsor, ahead of the sponsoring company.

It is more probable that several of the above factors, as well as some interaction, may have been at play to explain the results of the survey. People perceived and remembered, sometimes wrongly, the sponsors they felt were more likely to be involved in that sort of activity, and/or may have limited their attention to the first name shown in the advertisements.

The overall high recall of the advertising campaigns would have, on face value, comforted the company in its sponsorship strategic decisions, and indeed had done so in the past. An analysis of source attribution, on the other hand, showed that unless it could correct the public’s perception and recollection of its involvement, it was indeed failing to communicate in a beneficial manner in terms of corporate image improvement.

RECOMMENDATIONS

The study also revealed that a firm investing considerable resources in sponsorship may suffer from a lack of focus as well as from a potential mis-perception, by the target audience, of the sponsorship source. A review of the firm’s history and current portfolio of sponsorship programs seemed to indicate that sponsorship activities were too dispersed and varied to provide measurable returns and were, in general, ill-defined in terms of target audiences. The closer analysis of two particular campaigns relating to the road safety sponsorship further demonstrated the real danger of the public’s mistaken perceptions with respect to sponsors’ identity.

The internal audit team concluded that the list of sponsorship programs should be consolidated and that further research was required to assess more reliably the outcomes of each individual program. While some may be continued despite poor performance in terms of business or public exposure, such decisions should be made at Board level, based upon the perceived philanthropic value of such investments, and these expenditures should not be part of the marketing communication budget for which specific objectives must be set and re-appraised on a regular basis.

Previously assumed sponsorship-related expenditures, eg. Corporate boxes, were identified as belonging more appropriately to the client or staff entertainment category rather than to the sponsorship category and were thus excluded from the sponsorship investment portfolio.

With estimated sponsorship investments of the order of A$2 million for 1992/1993, the firm agreed to adopt a matrix system displaying current and future sponsorship expenditures in terms of dollars and awareness and set out to operate a gradual shift from the left hand side to the left hand side of this matrix as pictured in Figure 1 and Figure 2.

CONCLUSIONS AND FUTURE RESEARCH

While the case of a single firm precludes generaisation, it provides enough empirical evidence to question the rationale and trust which many managers place in sponsorship as a communication tool. The organisational decision process preceding the sponsorship investment seems to be such that too many activities are undertaken, sometimes with vague objectives, if any. In companies where an audit is conducted, it may be, as in the case of the firm involved in this study, that the main beneficiary of the sponsorship effort, in terms of awareness at least, is a co-sponsor or even possibly a non-sponsor.

Future research should attempt to assist in the generalisation of the findings uncovered by the present study. In particular, it may be critical for prospective sponsors to research their markets in order to confirm that their role as sponsor would not be so unexpected as to generate a high risk of mis-attribution. Likewise, the choice of co-sponsors may be conditional to some prior research assessing whether a possible overshadowing or incidental Ambush effect might occur.

FIGURE 1

SPONSORSHIP PORTFOLIO - CURRENT

FIGURE 2

SPONSORSHIP PORTFOLIO - PROPOSED

Obviously, measuring sponsorship effectiveness in terms of awareness, as in the case of the firm involved in this study, is conditional to such awareness objectives being clearly stipulated by sponsorship decision makers themselves. In many firms, the process is less formal or even inexistent, and future research should therefore attempt to measure sponsorship effectiveness when other types of objectives have been set, such as employees’ morale or customers’ loyalty, for example.

The interaction between sponsorship and other elements of the promotional mix, such as advertising or below-the-line activities, also deserves to be examined in more detail. Determining optimal levels of expenditures in sponsorship-related communication activities would be of prime interest to companies currently embarking on expensive sponsorship programs. Furthermore, the tacit nature of the message and the emotional involvement of the audience in the sponsored activity suggest that sponsorship may exercise an emotive rather than cognitive influence on consumer behaviour but this remains as yet untested.

Finally, the possible impact of sponsorship decisions on other areas of the marketing mix provides opportunities for further studies. Intuitively, one might argue that some transfer may occur in terms of image between the sponsor and the sponsored activity (and vice-versa) but the extent to which this may affect the overall consumer perception of the company or its product remains uncertain. How sponsorship investments would affect a brand’s positioning and thus its equity, price level or distribution network are all questions which researchers should address in the future.

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