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MARKETING NEWS | JANUARY 201914

scholarly insights SPONSORSHIPS

One Easy Way to Increase ROI from Sports Sponsorships Brands spend big money sponsoring sports because of its mass-market appeal and global audience. However, they may be under-investing in a group that’s potentially the most profitable: out-of-market fans.

BY MARC MAZODIER, CONOR M. HENDERSON AND JOSHUA T. BECK

T he global sports market posts double-digit revenue increases each year, soaring to $90.9 billion in

201 7. It’s an industry characterized by

big-dollar stars, passionate fans and high buy-in. The NFL, for example, notched sponsorship revenues of $1.32 billion for the 2017-2018 season and its games on

average command $134,009 for 30-second ad spots. Sponsors pay the high fees to gain mass-market visibility in a world of fragmenting media channels. They connect with fans via advertising, events and merchandise, but often favor local fans with whom they can build a more immediate connection.

Given the big money involved for sponsors, our new study, published in the Journal of Marketing, seeks to understand the impact of sponsorship on a little-studied group: out-of-market, or isolated, fans. It’s a timely topic because TV and digital media have helped grow a global fan base. In soccer, 80% of the British Premier League fans live outside of the U.K., one reason Chevrolet’s $560- millon sponsorship of Manchester United specifically targets out-of-market fans.

MARKETING NEWS | JANUARY 201916

scholarly insights SPONSORSHIPS

However, industry experts say as much as one-third of sponsorship budgets are wasted and only half of TV viewers can recall a sponsor of NFL games. So how can sponsors connect with out-of-market fans and determine their ROI?

Our research team posited that sponsorship effectiveness depends in part on where strong fans live relative to other fans. Based on an affiliation theory of sponsorship, which argues that sponsorship works by satisfying a fan’s affiliation needs, we predicted that fan isolation—or the experience of feeling separated from the team community—would trigger different affiliation motives and responses based on the level of fan identification. Specifically, we hypothesized that strong fans would seek team-based affiliations, whereas weak fans would affiliate with others in their immediate social environment. These different affiliation strategies should result in isolated strong fans being more receptive of brands that support their team (a “doubling- down” effect), whereas isolated weak fans would avoid brands that supported the team (a “desertion” effect).

To test this hypothesis, we studied 1,412 fans across three countries and three sports. We used two field studies to evaluate the effectiveness of real sponsors and four experiments to test the impact of real and fictitious sponsorships. Sponsorship performance was measured by a fan’s memory, attitudes, word-of-mouth and purchase intentions for sponsor brands.

Key findings Include: • Isolated strong fans exhibited increased

memory, attitudes, word-of-mouth and purchase intentions for sponsors. Isolated weak fans revealed the opposite behavior. For example, in our study of Premier League fans, more-isolated strong fans recalled the team’s brand sponsor 68% more than less-isolated strong fans. Similarly, when we studied fans of the NBA’s Los Angeles Lakers, isolation resulted in a 22% increase in brand sponsor purchase intention and word- of-mouth for isolated strong fans, but an 8% decline in purchase intentions and a 9% decline in word-of-mouth for isolated

weak fans. • In other experiments, when the strongest

fans were made to feel more isolated, they exhibited 46% better unaided recall of the sponsor brand, 38% more favorable attitudes and 91% greater likelihood to choose the sponsor brand instead of a competitor.

• A single exposure to a brand sponsorship advertisement for isolated strong fans is as effective as multiple exposures to the brand sponsor advertisement for all other fans.

• The work advances an affiliation theory of sponsorship, showing that sponsorship works because of the desire for affiliation, a desire that increases for strong fans when they are isolated from other fans. Sponsors have traditionally targeted the

strongest local fans with advertising dollars. Our research indicates that sponsors should instead prioritize a group that has been commonly ignored: strong fans that are out-of-market and more motivated to buy team goods and products from sponsors. In the digital era, companies can accomplish this goal by microtargeting fans by audience location and interests on social platforms such as Facebook, YouTube, Twitter and sports sites.

Marketers can use our research to spend advertising dollars more effectively. For example, it may drive more ROI to allocate a good portion of advertising spend to digital advertising targeting out-of-market fans rather than paying for individual 30-second TV spots. Sponsors can cultivate a digital fan base they can market cost- effectively, deepening loyalty and driving revenue with each offer. But they also need to take care not to antagonize isolated weak fans, whose loyalty may also grow over time. m

MARC MAZODIER is associate professor of marketing, Zayed University, and affiliate

professor, Kedge Business School.

CONOR M. HENDERSON is assistant professor of marketing, Lundquist College of

Business, University of Oregon.

JOSHUA T. BECK is assistant professor of marketing, Lundquist College of Business,

University of Oregon.

Sponsorship works because of the desire for affiliation, a desire that increases for strong fans when they are isolated from other fans.

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