June 15, 2005 | Case Study

The Sponsor Trap

Does anyone recall who sponsored the Olympics — and do you remember correctly? As companies spend millions of dollars to sponsor sporting events, it's time to ask if sponsors are getting their money's worth.

Topics: Marketing

Eleven major companies — including Coca-Cola, Kodak and Adidas — paid $60 million each to become official sponsors of the 2004 Summer Olympic Games in Athens. The event reached 220 countries around the world, with a total of four billion consumers. It was an outstanding example of a growing trend, where companies spend more and more money on more and more sporting events. It’s time to ask, is it worth it?

Professors Gita Johar and Michel Pham studied how well consumers recall the sponsor after major sporting events. The answer: not well at all. Worse, they often credit a competitor. For example, Adidas sponsored the 2004 European soccer championships, but consumers were almost as likely to name Nike as the sponsor. Even correct responses often came from luck rather than from successful advertising; athletic-shoe companies often sponsor soccer, so Adidas makes a good guess.

As it turns out, consumers have a hard time associating sponsors with one-time events. A different group of companies sponsor the Olympics each time, so consumers don’t identify them with the Olympics over the longer term. Having multiple sponsors for the same event further weakens the link, and then even more companies find their way in by sponsoring individual teams. It’s no wonder consumers can’t keep it all straight. Last but not least, audiences don’t remember sponsorship nearly as well as more conventional marketing, like print and television ads.

So what can a sponsor do? Make sure you sponsor events closely related to your products so that guesses come out in your favor. That helped Adidas in the European soccer championships. On the other hand, maybe you will get the same benefit anyway, as Nike did, as long as you are a major brand; if you are a minor brand, you will certainly lose out, as consumers will give credit to your bigger competitors.

Also make sure to sponsor a series of events, rather than just one, and make sure to advertise before and after too. Otherwise competitors can steal your thunder by advertising during the event, even if they’re not sponsors, and so confuse consumers about who the sponsor really is. And track how consumers recall your sponsorship between events too, not just right after. Supplement sponsor recall measures that may simply reflect educated guesses with other measures of sponsorship effectiveness such as brand equity and associations.

But remember: in the end, it might not be worth it. It’s hard to make sponsorship stick.

 

Gita Johar and Michel Pham are professors of marketing at Columbia Business School.

Read the Research

Gita Johar, Michel Tuan Pham

"Relatedness, Prominence, and Constructive Sponsor Identification"

View abstract/citation  Download PDF  

Michel Tuan Pham, Gita Johar

"Market Prominence Biases in Sponsor Identification: Processes and Consequentiality"

View abstract/citation 

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