It is today seemingly impossible to watch a sporting event without brand names plastered across every available piece of stadiums, equipment and the players themselves. To put it into context for a major sporting brand in Manchester United, commercial revenues now account for 42% at a grand £153m annually, eclipsing matchday revenues of £109m and TV rights at £102m.
Sports sponsorship is just one example, but the issue remains that despite incredible amounts of money paid by sponsors, individual cases are notoriously hard to justify given the lack of proof that they actually work. Unlike a specified sales promotion, where financial formulas help calculate a rough impact on sales and profits to determine whether it’s worthwhile, it is almost impossible to provide this proof with sponsorships.
Given the uncertainty, a debate has even emerged on how sponsorships actually work, based on two different perspectives.
First of all, in 1997, Hoek, Gendell, Jeffcoat & Orsman built upon Ehrenberg’s weak forces of advertising theory to suggest that sponsorship simply REINFORCES past decisions and behaviours. This can be seen in the example of Adidas forking out an estimated $130m to sponsor the 2014 FIFA World Cup – which was clearly not a tactic to create associations with football as the brand is already at lockerheads with Nike for market leadership. Instead, the argument is that by seeing Adidas on the biggest stage of world football, and not Nike, this acts as confirmation to sports fans that Adidas is the number one brand.
By contrast however, Crimmins & Horn (1996) maintain that sponsorship offers a PERSUASIVE impact. Their belief is that associations can be transferred from the sponsorship category to the sponsor itself in the mind of consumers, depending on the strength of link generated between brand and event, and the duration of association. For example, Strongbow’s 2013 “Earn It” campaign featured sponsorship of Tough Mudder – the gruelling 12-mile obstacle course designed to test all-around strength, stamina, teamwork and mental grit; with the intention of Tough Mudder’s associations of ‘masculine’, ‘strong’ and ‘energetic’ rubbing off onto Strongbow and repositioning the brand.
McDonald’s are a keen user of this tactic to overcome negative publicity surrounding its undeniable contribution to childhood obesity, with sports sponsorships including the annual Community Shield football match feeding into sports coaching programmes to keep kids active and demonstrate McDonald’s as a ‘caring’ and ‘concerned’ brand that’s doing its part to combat the epidemic.
Regardless of your perspective on sponsorships, research is finally beginning to emerge that demonstrates them to be effective, including Harvard Business Review’s study on London 2012 Olympic Games sponsors. This supports Crimmins & Horn’s PERSUASIVE impact perspective in referencing the specific case of BP, whose perceptions of “Working towards a cleaner planet” outdo competitors that are not associated with the Olympics.
To conclude, it is worth raising an issue that many brands are often wrongly assumed to sponsor events that they have no official association with – and can therefore reap the rewards without spending a penny! The aforementioned 2014 FIFA World Cup is an excellent example of this. According to research by GlobalWebIndex, Nike is assumed to have been an official sponsor, rather than Adidas, by nearly a third of UK and US consumers. This emphasises the skill of acknowledging when the high cost of sponsorship is not justified (from the perspective of Nike), but also to exploit the opportunity to be acknowledged as a sponsor (in the case of Adidas).