Why Deal Characteristics Matter
It is generally believed that sponsorship success, in terms of consumer perceptions, is all about activation—in other words, the activities that the sponsor has organized for potential consumers at the event. Or is it? In a recent Journal of Marketing article, David M. Woisetschläger, Christof Backhaus, and T. Bettina Cornwell ask whether sponsorship deal characteristics hammered out at the corporate level influence consumers’ perceptions of the sponsor’s motives. Is it a feel-good, affective sponsor, or is it calculative and perhaps scheming or selfish? In the case of a sports team sponsorship, does the firm have a relationship with the team, or is this sponsorship deal obligatory because the firm is the largest employer in the team’s city?
Consider this example: In 2012, Chevrolet began a seven-year sponsorship of Manchester United. The deal caused a stir because of the price ($600 million) and because the Chevy brand, as American as baseball and hot dogs, was sponsoring a soccer team from the English Premier League. With the $85 million per year “quid pro quo” connotations of the international deal, it is not surprising that some viewed the partnership as a fiasco.
The overarching nature of a sponsorship deal negotiated by management includes key characteristics such as duration, contract fee, and relationship type. Although these deal-making characteristics set the stage for the sponsorship relationship, they tend to be overlooked as factors that contribute to consumer perceptions. In this research, the authors examine how sponsorship deal characteristics affect consumer inferences, attitudes, and behavioral intentions toward a sponsor and a sport property in a partnership.
A Framework for Understanding Motive Inferences in Sponsorship
Even if people don’t know every detail about a particular sponsorship deal, they try to make sense of the “marriage” of the sports team and the brand. This includes assessing the fit between the partners as well as trying to understand the motives behind the partnership. The article’s framework proposes that people infer a mix of affective, normative, and calculative sponsor motives.
- Affective motives are inferred as result of good intentions directed at the sponsored property.
- Normative motives are inferred if firms are perceived to be doing their civic duty in supporting properties.
- Calculative motives are inferred if firms are perceived to engage in sponsorship primarily to reach markets and sell products and services.
The thinking is that attribution of affective and normative motives strengthens the perceived relationship between the partners, resulting in an improved evaluation of the property with regard to brand attitude and loyalty. Selfish attributions, in turn, are likely to result in negative outcomes.
How motives are attributed depends on factors such as contract length, regional proximity, and sponsorship fees: these deal characterstics provide a basis for inference making. For instance, long-term relationships evince genuine commitment, and regional linkages signal a natural connection and positive sponsor motives. Costly contracts, in contrast, may elevate attributions of predominantly calculative motives.
To test the framework, Woisetschläger, Backhaus, and Cornwell looked at 44 sponsorships in the German football league, viewing existing deals through the knowledge that 2,787 consumers already had about brands and sports partnerships. The authors also examined the proposed relationships through an experimental field study in the context of handball, a comparatively low-profile professional sport.
Key Findings
The first important finding is that consumers do make inferences about sponsor motives, and this affects sponsorship outcomes such as brand attitude and loyalty. The first study finds that sponsorships with high fees and distant international sponsors reflect calculative motives of the sponsors. To some degree, stadium naming rights deals also are seen as more calculative than, say, perimeter logo sponsorships.
In contrast, close geographic proximity of a sponsor to a team is associated with affective motivations. Such deals are perceived as positive and suggest that sponsors care about a team or sport. Both studies show that the longer sponsors commit to a sponsee via the contract duration, the more positive the inferred motives and brand perceptions tend to be.
There are, however, some interesting differences between the soccer study and the handball study. In the handball study, high fees paid by a brand to partner with a sport were not perceived as calculative. In this lower-profile sport, higher fees seem to be seen as helping to keep the sport alive.
Conclusions
For practitioners, the results show that there’s more to sponsorship deal characteristics than just governing the relationship between the sponsor and the sports team—the nature of the deal conveys a subtle message to consumers. Management should take seriously not only decisions about contract duration, sponsorship fees, and the regional focus of their sponsorships but also communication about these characteristics. In particular, although short-term sponsorship contracts have the advantage of greater flexibility, management should take into consideration that such deals can lead to negative motive inferences. Similarly, geographically distant sponsorships might be attractive in terms of gaining a foothold in new markets, but these can come with negative motive associations.
In deal-related communications, managers might emphasize the longevity of their sponsorship. Sponsors of high-profile sports properties should also address any negative effects of high sponsorship fees—for instance, by providing explanations of the benefits resulting from the sponsorship. International firms could emphasize local or regional operations and employees from the region. In all these instances, storytelling around the sponsorship may provide additional information for inference making.
The results also reveal that sponsorship characteristics affect the sponsored property. Overall, these findings suggest that sports should not treat sponsoring as primarily a revenue-generating activity. Instead, they need to be aware that sponsorship decision making conveys messages to fans and other stakeholders. Sponsored properties should prefer long-term commitments to short-term sponsorship deals and weight the value of regional partnerships differently than (inter)national sponsors. Sports team managers should also avoid perceptions of sponsor investments being overly dominant in their decision making.
David M. Woisetschläger is Professor of Services Management, Technische Universität Braunschweig.
Christof Backhaus is Professor of Marketing, Marketing and Strategy Group, Aston Business School, Aston University.
T. Bettina Cornwell is Edwin E. & June Woldt Cone Professor of Marketing, Department of Marketing, Lundquist College of Business, University of Oregon.