Decision-making Processes Surrounding Sponsorsiiip Activities
HANS MATHIAS
The rationale behind sponsoring is as varied as the definitions of sponsorship itself, A
THJ0M0E
logical approach to sponsorship decision making would dictate that firms should have
Norwegian School of
clear targets and goals for sponsorship. They should also make some attempt to
Management
[email protected]
coordinate sponsorship with other communications efforts while measuring its effects or return on investment. This paper describes the findings from a sample of large
ERIK L. OLSON Nonwegian School of Management
Norwegian businesses on how they define sponsorship, how much they spend and where, why they sponsor, and how they manage their sponsorship activities.
[email protected]
Large-scale sponsorship is relatively new to Norway, but this late start also has PEGGY SIMCIC BR0NN Norwegian School of Management
[email protected]
provided an opportunity for learning from those who have gone before. It is possible to conclude from this research that many firms have a variety of complex goals for their sponsorship efforts but not terribly high-quality management practices when it comes to decision making surrounding sponsorship.
in sponsorship spending, there is much that remains to be learned about how sponsorship works and what makes it effective (Cornwell and Maignan, 1998; Speed and Thompson, 2000). The current study attempts to provide some insight into the decision-making process of managers responsible for sponsorship activities by examining how they define sponsorship, how sponsoring fits into their stratej^ic planning and overaJl communication planning, and what sort of measurement of sponsorship effectiveness they regularly do. The sample is taken from the 400 largest firms in Norway, which includes a high proportion of foreign firms with operations in Norway. Nignifi there,1 Llifk'rfncc^ .is iionsponsor-
(Cont'd)
^''•'"'""' ^'f^'"'''"''-'"'^''^ sniJiUcr ~
~
Professional versus Nonprofessional Firms 2-2. sponsoring as % of communications
,
.
The tv\ o !)!nst
i m p o r t . i n t reasons l o i ' n o t spon^'O^in^; -v^is
Less
More
Professional
Professional
t/p
ih,:it "there is nn ftfccti\t' way to nuvisuii'
4.7
13,0
2,73/.01
budget
nsults iine.m
^,i)| niul t l i i l Spon^mini.-
'^ ^^''^^ expensive" (mean - 4,1). "Ihe other ^^ questions relating to effectiveness in
'Spor^som(^als^yi^or^s
reaching Urj^et markets .nd appropriate-
4-1, sponsorship based on personalmterests
3,00
1,71
2.98/.01
of top manager
' ' " • " ' *'' ^P'^'^^'"-'^^S for ihe t u m had "''-''"^^ '^^''"^^^ ^l^*^' '"'^F'^^^^ • ^ ., . , The hndingy mdicate that large Norvve-
4-5. sponsorship to improve awareness of
4.76
5,94
3,56/.00
company or brand
gian firtns that choose to sponsor have de\eloped sponsorship goals which arr in
4-6, sponsorship to improve company or
4.59
5,81
3.61/.00
brand image
keeping with the higher-ievel steps in Meenaghan's (1991) framework { spon-
4-7, sponsorship to meet or beat'competitor''s""l.64'
2,30
2.06/.04
pffnrts
^^'^'^^^P progression, despite their rather
'^^*'"' ^'^'^'' '^'^ sponsors. On other elements
4-8, sponsorship to increase sales
1,85
3,55
5.25/.00
4-9, sponsorship to improve relationships v^ith
3.06
4.23
2.72/.01
'°^^',,^t^*'^^'5'^''^
ot professional sponsorship management. , , , , , however, there is fess evidence t:hat N;or^^^^^.^^.^ fj,.^^, f^^^,^, ^Y^,,,^^^^^ , , „ their
goals with careful planning, coordination.
4-12. sponsorship for long-term effects
4.21
5.77
3.95/.00
4-13. sponsorship gives us advantages
3,79
5.23
4.73/.00
support the supposedly common sponst^r-
„ ^„ , ^, , , , ,, 4-14. we are satisfied with our sponsorship
, ^^ 4,26
r- ^ ^ 5.00
^ ^ ^^ 2.21/.03
^hip rationale of ego-gratification ot top ^ ^ ^ ' management (Cornwell and Maignan, '^ '^
program
In terms of spending patterns, sponsorship management, and funding sources, there were few differences between the two clusters. The more professional group spent a considerably larger amount on sponsorship (4,2 million kroner versus 0.5 million kroner, p < ,03), and sponsorship was a larger portion of their communications/marketing budget (13,0 percent versus 4.7 percent, p < ,01), The unprofessional group gave a larger portion of their sponsorship money as anonymous gifts (14.7 percent versus 5.9 percent, p < .09), They were also less likely to agree tbat their sponsorship decisions were strongly influenced by their marketing department 12
LOF
(5,29 \'ersus 6.00, p < .09), or public relations department (2,73 versus 3.78,/'< .08), The more sophisticated motivations and more commercial spending patterns further support the labeling of the clusters as "unprofessional" and "more professional."
Nonsponsoring firms Research questions also addressed firms who do not sponsor. Surprisingly, over 30 percent of the respondents claimed to not sponsor anything. As can be seen in Table 3, the types of businesses represented by the nonsponsors was very similar in profile to the firms that did sponsor. Only in
RESEBRCH November • December 2002
and researeh. While the findings do not
1W8; Meenaghan, lWl). they also do not suggest that much accounting is made ol the largo sums of money devoted to sponsorship activities- The lack ol interes! or ability io conduct research that would allow firms tn evaluate the eftecti\'enesN of their sponsorship programs cimtrnsts quite sharply with the specific spons(,)rship goals and considerable sponsorship budget that they employ. It therefore might be considered a paradox that most companies in our study claim thaf they are fairly satisfied with the results of their sponsorship even if they are not sure what those results are. To gain some added insight into this paradox, we showed our results to Asmund Berge, head of a leading sponsor-
DECISION-MAKING AND SPONSORSHIP
3
markets with even longer histories of
Differences between Sponsors and Nonsponsors
sponsorship (Hansen and scotwin, 1995).
..
"This suggests that this somewhat ad hoc
•—-————————^~—
Nonsponsoring Firms
N
Mean
basis for making sponsorship decisions is
6-1. Sponsoring is too expensive. ^„ , , .^, ^ 6-2. It IS too difficult to find out how effective
50
4,1
51
5,0
'""^t unique to Norway. Although the lack of coordination and " research on sponsorship efforts might be
51
3,5
53
', 3,9
sponsoring is in achieving our goals.
explained by the sales-oriented sponsor-
6-3. Sponsoring does not reach our target group.
,.. r 6-4. We do not thing that sponsoring is ^^®.9.^.^.t^.f°''.,°,^.L'r,°,^,P^^y:
r.
".
,,
Does your company sponsor today?
Turnover 1998 (1000 NOK) : : ^.^•..,°^.^.^.P',°y,®.^.^.,^.^^^,
Yes
No
Mean 2,810,758 ,
Mean 516,316
N 129
.^.^1®.
^^?,
^?.
P value 0,15 : 9.'.^!
Does your company sponsor today? By industry Industry
Yes %
No %
,
^ • N,
ship environment m Norway, our survey of nonsponsors indicates that many perceive that there is no effective means of measuring sponsorship effects even if they had a budget for it, Tn addition, the J 6 ' mean for those in the professional cluster indicafed agreement with the statement „ ,. . u •( ^ we would do more research if we knew how," This is not a new issue, as even the long history of efforts to measure adver-
Total %
tising effects have not yielded methods ^ ^ that are universally accepted as valid and
.^,^.',^.
H'.^
^1:^.
cost effective (Vakratsas and Ambler,
..,f..,I..,.^P!^^.,. Service, finanace, insurance
^L^. 21,8
^^'^ 21,8
^°'2 21,8
^99^)- ^" addition, the most common method of determining sponsorship ef-
IT, communication
13,8
16,4
14.8
Manufacturers, energy
17,2
12,7
15,5
^^'^' ^ ^ ° ™ y ^^'^ ^^ ^ ^ ' ^ advanced markets such as the United States is the
100:0
100,0
1X)O,O
SUM.% i\'art;o!i Jiifq - o.Hi
measurement of sponsoring brand expo,ure on media coverage of the sponsored event (Kate, 1996; Rosen, 1990; Corfez, 1992). While this might be an appropriate method for measurement of such sponsor-
ship consulting firm in Norway (Berge,
While the sales presentation might em-
ship goals as building brand awareness, it
2001). He commented that the findings
phasize commercial objectives such as
is clearly not appropriate for more ad-
were not very surprising because the Nor-
higher awareness or closer relationships
vanced goals such as changing brand im-
wegian sponsorship market was still very
with suppliers as a means to justify fhe
age or enhanced relationships with stake-
sales-oriented. In his own dealings with
asked-for spending/contribution, the pro-
holders/customers.
many of the largest Norwegian sponsor-
cess made it more difficult to find "extra"
The results do show, however, that a
ing firms, he found that many were mak-
money for measurement purposes and
small minority of firms do seem to be
ing sponsoring decisions based on sales
made coordination with other sponsor-
making an effort to determine the effects
presentations by sponsor objects in need
ship and communication programs diffi-
of their sponsorship activities by choosing
of funding. In many cases the opportunity
cult. In addition, because part of the spon-
methodologies that are appropriate for the
to present the sponsorship opportunity
sorship choice was based on personal re-
sponsorship goals they have. This does
was based on personal connections be-
lationship criteria, he felt that there might
not mean that they are completely satis-
tween the sponsor object and manage-
be a reluctance to spend money finding
fied with the methods they have available,
ment at the potential sponsor. This meant
out that the sponsorship did not achieve
but that they believe it is worthwhile to do
that the choice of what fo sponsor was of-
its "commercial" objectives. Although our
the best job they can to determine the ef-
fen not part of the "official" communica-
sample is limited to large Norwegian
fects that sponsorship is giving them. The
tion strategy and budgeting process.
firms, the findings are similar to other
overall results, however, suggest tbat
November . December 2 0 0 2 JOURIIIIL DF llDllEBTtSIRfi BESEflBCH 1 3
DECISION-MAKING AND SPONSORSHIP
most firms in Norway, and probably cither markets, are still waiting tor more effective and efficient ways to research sponsorship effects, and that this desire will probably grow as firms become more professional in their approach. The methods that evolve will need to encompass the variety of sponsorship goals and aims used by firms today, even in late-developing markets such as Norway, The lack of budgeting for measurement indicated by the survey of current sponsors also means thaf these measures will also need to be cost effective, l^ft
REFERENCES 'loi-k, \ ~ l . Vli-( ,r.^\\• fjill, \'N7 ABH.AI I, Rl >si I I, a n d i'li n-K S, t Jjditi \'R. •'Th t i v a l t i a t i o n iit S p ( i r t s S p n n s o r s h i p . ' ' iiiteriui
iioiiii! journal of Adrcr/i^iii^^ S (19^9): 3'Si--(i2,
