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Measuring Sponsorship Effectiveness

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By Bill Harvey, Stu Gray and Gerald Despain

A prior version of this report, and accompanying methodology, was originally presented to the Advertising Research Foundation (ARF) in October 2000 and published in the ARF Journal of Advertising Research in November 2002. This updated version includes additional findings developed through February, 2006, the date of the presentation of a cross-publisher study to the Interactive Advertising Bureau's Advertiser Forum. Bill Harvey is President and Founder of Next Century Media and Co-Chair of the New Media Model Committee of the ARF. Gerald Despain is Chief Technical Officer of Next Century Media. Stu Gray is the former Senior Vice President of Media Research for BBDO and a member of the Board of the ARF. The Sponsorship Effectiveness Index (SEITM) was founded by Next Century Media, American Demographics Magazine, and Studio One Networks to develop a Sponsorship Effectiveness Index that enables advertisers to measure the impact of program sponsorships within various new media environments.

Sponsorship is again on the rise, and marketers have called for new efforts by researchers to measure the business value of this form of marketing communications. The methodologies appropriate to making sponsorship accountable are similar to those used for other forms of advertising, and the effects of sponsorship fit within the continuum of effects known as the ARF Model. What causes Persuasion in the sponsorship context appears, however, to be different from what causes Persuasion in the advertising context.

Background To This Study

In 1999, Next Century Media was approached by Studio One, a major creator and syndicator of sponsored content on the Internet and in broadcast outlets, and was asked to develop a methodology for measuring the effects of Internet sponsorships. In subsequent meetings with industry associations, including the Association of National Advertisers (ANA) and the American Association of Advertising Agencies (AAAA), American Demographics magazine, Studio One Networks and Next Century Media organized SEI LLC., whose purpose is to make those methodologies applicable across all media, including television and event sponsorships. The methodology has been applied first to the Internet and is expanding, using constant yardsticks across all media. Between 2000 and 2006, SEI has executed 30 sponsorship studies for ten top advertisers.

American Demographics, a Crain relationship, is the exclusive publishing partner in SEI Inc. with special focus on delivering insight into the study's findings. The SEI findings in this paper are presented by kind permission of American Demographics.

Current Questions

Sponsorships were the original advertising form on radio and television. Sponsored events today generate more total dollars than all media advertising combined (from a combination of sponsor expenditure plus ticket sales). On the Internet, sponsorship revenues are expanding faster than banner revenues. In the future, the rise in penetration of Personal Video Recorders such as TiVo, as well as the duplication of PVR function by cable and satellite set top boxes is expected to increase the consumer's ability to avoid normal advertising. Pundits are proclaiming that the future shall be a new Golden Age for sponsorship, product placement, and cast presenter commercials, in an effort by marketers to keep up the consumer's diet of marketing messages in face of the new hurdles - avoiding zapping by merging into the programming.

Despite all of the indicators pointing to the need for a clear understanding of the business value of sponsorships, marketers today remain unsure of how sponsorship works and how to properly measure its business value. Marketers see sponsorship as something different from advertising - but there has been no general clarification of how sponsorship differs from advertising, and what this implies in terms of how to make sponsorship accountable. Thus there has been a recent groundswell of interest expressed by advertisers and agencies alike in devising new forms of research to measure the business effects of sponsorships in all media - including events.

Previous Studies

In 1968, we were privileged to work on a C.E. Hooper project for a pet food advertiser to measure the effects of a sponsored Special on CBS in prime time. The cast presenter commercials were seamlessly integrated into the program. Hooper was measuring the scatter plan for that advertiser as well, and applied the same on air testing methodology to measuring the Special. The attitude shift and commercial recall measures for the Special were approximately three times the scatter plan averages. In the latter case, what was being measured was a combination of product-sell commercials plus sponsorship. One indeed wonders what the recall and attitude shift results would have been if the sponsorship did not include product sell commercials. Today, sponsorship generally does not include product sell - although perhaps it might in the future if the combination turned out to be as potent in general as in the case just cited. This potential potency suggests that the industry develop its sponsorship measurement tools so as to be able to distinguish causes and effects to this degree - i.e. separating out the effects of sponsorship itself from accompanying product sell advertising, if any.

In the same year, we were also fortunate in participating in another Hooper study, which used approximately 250,000 coincidental calls to measure the immediate recall of TV commercials from 10AM to 10PM in each local time zone. By 1968 there were only a handful of sponsored programs left on television, as the scatter plan had become the dominant TV media strategy. The immediate commercial recall on these sponsored programs was about 2.5 times the average scatter plan level.

In 1990, CBS commissioned Norman Hecht Research to conduct a series of studies measuring the effects of five prime time TV Specials. The advertisers were Anheuser-Busch, AT&T, Chrysler, GM, Hallmark, McDonald's, Pepsico, Reebok, and Valvoline. The Top Of Mind Brand Awareness was increased up to +230% with a median increase of +17%. Top Of Mind Advertising Awareness was increased up to +500% with a median increase of +24%. The most significant measure, at the persuasion level, was a Purchase Intent increase of up to +40% with a median increase of +20%. As a benchmark, at about the same time, one of the leading commercial pretesting companies, rsc, found that persuasion increase caused by the average TV commercial tested was on the order of magnitude of +5%.

There are other historical cases as well, suggesting the higher efficacy for sponsorship versus straight advertising. We continue being interested in exploring this further and in better understanding what makes sponsorship work.

Hypotheses of the Sponsorship Effectiveness Index Studies

  1. Sponsorship has recall and persuasion effects like traditional advertising.
  2. Sponsorship operates through different cognitive processes than those utilized by traditional advertising.
  3. Advertising changes the consumer's perception of a specific product while sponsorship changes the consumer's perception of a specific sponsor - which can rub off positively on the brands of that sponsor in terms of willingness to purchase those brands.
  4. Sponsorship positive business effects are maximized when:
    a. The target audience is highly involved in the subject of the program or event being sponsored.
    b. That audience perceives there to be a scarcity of content in the subject area relative to their appetite for it.
    c. The program/event is executed so as to produce a high level of satisfaction with the material by the audience.

Methodology

When Internet users click on a link to a sponsored program they are intercepted by an invitation screen.

Before they are admitted to the program, they must answer yes or no to a question as to their willingness to answer a few questions "to help us improve the program" which they will be asked upon leaving the program. They may be offered an incentive ranging from a free magazine to a $15 gift certificate at a popular book chain, depending on the degree of the advertiser's willingness to incent respondents.

Users answering "no" are allowed to go to the program and are not contacted again. Users answering "yes" are also allowed to go to the program, and a random half of them are sent to a version of the program where the sponsor is not mentioned (the control group). Everything else about the program is identical across the exposed group and the control group. As respondents leave the program by any means (e.g. click on a banner, hit the back button, etc.) they receive a short onscreen questionnaire, which is the same for both the exposed group and control group. A person's status (agreed to participate or not, control or exposed group, already responded to questionnaire or not) persists across multiple sessions to prevent duplication of participants or showing sponsorship logos to the control group.

The questionnaire begins with questions about the editorial content and how it might be improved. It then goes on to questions relevant to measuring sponsorship effectiveness, which are adapted for each sponsor's studies to reflect communications measures that advertiser has found to be most predictive of sales, and which are therefore routinely used to assess advertising performance in tracking studies and in commercial pre-testing. The difference in these measures is attributed to the effect of sponsorship, as all other variables have been held constant.

SEI's software can be calibrated so that all users clicking to go to a sponsored program may be intercepted, or a specific percentage of them can be intercepted.

Findings

Consideration Set

The key success measure for many advertisers is Consideration Set. The consideration set is that group of brands within a product category that the particular consumer is willing to buy. The brand decision at each purchase occasion balances mood, situation, availability, price/promotion, and advertising recency - among the known factors - to select one brand (or more) out of the present consideration set. To be in this set gives a brand a chance of being purchased; to be out of this set is to have a virtually zero chance of being purchased.

Automotive marketers have the following footrule: in buying a new car, the average consumer considers six makes, test drives three, and buys one. This points up the importance of being in the consideration set level of the car buying funnel.

Table 1 shows the combined SEI studies across four different packaged goods brands and four different automotive brands. The comparison is on willing to consider between those who saw the sponsor on the program versus the control group who saw the same program but without the sponsor being mentioned.

The average lift for packaged goods was 25% (one quarter again as many consumers). The average lift for automotive was 55% (half again as many consumers).

Table 1 Sponsorship Effect on Consideration Set for a Car Maker

Sponsored

Unsponsored

Lift

Confidence Level

 Packaged Good        

 Intab Sample Size

 1621

 1560

   
 Considering Sponsor

 63.7%

 51.2%

 +24.6%

 100%

 Automotive        
 Intab Sample Size

 480

 505

   
 Considering Sponsor

 11.7%

 7.5%

 +55.0%

 97%

Purchase Intent for Packaged Goods

In SEI studies for four packaged goods products we asked about purchase intent, which across these studies increased by an average of +26%.

Table 2 Sponsorship Effect of Intent-To-Purchase

Intent To Purchase Sponsor

Sponsored

Unsponsored

Lift

Confidence Level

Packaged Goods

       

Intab Sample Size

1595

1533 

   
Packaged Goods

39.1%

30.9%

 26.3%  100%

Brand Perception

A major clue to the way that sponsorship works is provided by a third measure, Brand Perception. The underpinning of today's Persuasion measurement is a cognitive attitude shift model in which (a) attitude is a predisposition to behavior and therefore predictive of behavior (b) the predisposition to buy a brand is the mathematical resultant of (b1) the desirability weights that a specific consumer places on various benefit dimensions of a specific product category and (b2) the degree to which that consumer perceives each brand in the category in terms of its ability to deliver each of those benefits.

Horace Schwerin, Al Achenbaum, Russ Haley, Jack Landis and many others deserve credit for establishing this important model (not the only important model) of how advertising works. The present work is aimed at helping sponsorship catch up with advertising in terms of having a similar level of understanding of how the process works.

Within the latter context, in the sponsor's product category, having one's brands perceived as one of the best in terms of product attributes would be a good thing; therefore, we would expect that if sponsorship worked like advertising, then given the positive results seen with the other data above, we would expect that the perception of the sponsor's brands as one of the best would be higher in the exposed group than in the control group. For some studies, we asked the respondents to rate their attitude towards the sponsoring brand. Although the average across all brands showed a +19% lift, some advertisers did not show a significant positive lift as expected commensurate with the consideration/intent measures in product attribute perception among those exposed to the sponsorship.

Table 3 Sponsorship Effect on Product Attribute Perception

 

Sponsored

Unsponsored Lift

Confidence

 Packaged Goods        
 Intab Sample Size  580  509    
 Brand Preception "one of the best"  36.9%  31.0%  19.0%  97%

What this potentially means (pending much further research) is that sponsorship increases willingness to consider and intent to buy brands not for their own product characteristics and the benefits derived there from, but for some other reason. What that reason or those reasons might be we shall postulate in our conclusions.

Sponsorship Impact on Opinion of Sponsor

In several of these studies, respondents were asked if the sponsor's act of bringing them the content had changed their feelings toward the sponsor or their brand. Among those exposed to the sponsor, the percentage who said that the sponsorship might have improved their opinion of the sponsor or their brand averaged 28% ± at a 95% significance level.

Table 4 Improved Opinion Towards Sponsor

   

Sample Size

 

% Might Have Improved Opinion

 

± @ 95%

Average

1039

 

27.6%

 

3%

 

These substantial numbers corroborate the dynamic changes implied by the exposed/unexposed comparisons, and indicate that the audience was at least in some cases consciously aware of how the sponsorship influenced them. These supplementary findings triangulate the basic findings and lend credence to the explanation of an underlying appreciation/gratitude effect driving the process of persuasion via sponsorship (see conclusions below).

Summary of SEI Studies

Between 2000 and 2006, SEI has run sponsorship studies on numerous publisher sites and multiple brands. Although the criteria for measuring advertising effectiveness vary by brand/product type, the studies consistently show a positive lift of sponsorship effectiveness between the control group and those exposed to the sponsorship.

Table 5 Summary of SEI Sponsorship Studies - Advertiser's Main Measure

 

 

 Prepared Food Products
 Food Products
 Health Products
 Household Products
 Automotive
 Financial Services
 TOTAL
Sponsored

Intab Sample

Favorable
 822 58.6% 
 431  29.9%
 243  33.7%
 125  34.4%
 480  11.7%
 82  42.7%
 2183  28.9%

Unsponsored


Intab Sample

Favorable
 831  48.0%
 362  27.9%
 255  24.3%
 112  13.4%
 505   7.5%
 88  27.3%
 2153  +28.9%




Lift
+22.1%
+ 7.3%
+38.8%
+156.9%
+55.0%
+56.5%
 +28.9%




Confidence
100% 
 47%
 98%
 99%
 97%
 97%
 

What is True Sponsorship?

There is an unfortunate tendency for some Internet media to misuse the term sponsorship. What then do we consider to be true sponsorship? A true sponsorship has:

  •  Exclusivity/Visibility. There is a single sponsor. There is no advertising for any other brand. It is easy to see the sponsorship credit. It is not a true sponsorship if it is difficult to see the sponsorship logo because it is too small, poorly placed on the page, or is lost among regular ads on the page.
  • Emotive Connection. It is perceived as giving the user a no-strings-attached gift of valued content. It is not a true sponsorship if it is promotion for a brand. It is not a true sponsorship if there are hidden or obvious product plugs in the program/editorial content. It is not a true sponsorship if there is hard sell advertising for the sponsor or if to the consumer what is meant as sponsorship looks like just more advertising.

SEI LLC has tested a variety of different modes of sponsorship, comparing them on ascending and descending levels of messaging, creative, integration, and exclusivity.

IAB Study 2003

During April-September, 2003, The Interactive Advertising Bureau in conjunction with CondeNet, Forbes, Primedia, Register.com, Studio One Networks, TerraLycos, and Yahoo, under the sponsorship of Volvo through Euro RSCG Circle.com, engaged SEI LLC to conduct a major industry landmark study of the two main types of Internet sponsorship, True Sponsorship as defined above versus Common Sponsorship (the latter consisting of all other forms of Internet sponsorship, characterized mainly by having more than one advertiser visible on the page).

In this study the lift in Willingness To Consider Volvo was compared between the two forms of sponsorship. Of course, respondents did not know Volvo was behind the study, and Volvo was not mentioned by name anywhere in the questionnaire or in the recruitment screen. All SEI LLC studies utilize this same double-blind methodology ("double" meaning that neither respondents nor interviewers know the identity of the study sponsor - in the case of SEI there are no interviewers so only respondents need to be kept in the dark).

The results clearly show a dramatic lift in Willingness To Consider Volvo created by True Sponsorship, with no significant change in Willingness To Consider produced by Common Sponsorship.

 

 

True Sponsorship
Common Sponsorship
Sponsored

Intab Sample

Favorable
92 7.6% 
873  4.4%

Unsponsored


Intab Sample

Favorable
 127  1.6%
 841  5.6%




Lift
+383%
-   22%




Confidence
96% 
 75%

Recommendations

Following are some implications for sponsored programming/events which we have drawn from our findings:

  • Make sure that your sponsorship of the content is VISIBLE.
  • If appropriate, someone involved in the program/event might THANK the sponsor for sponsorship of the program/event.
  • This "Thanking" might be carried over to advertising and PR for the program/event.
  • Be wary of the potential dilutive effects where there are multiple sponsors for the same program/event.
  • Adhere to the rules of True Sponsorship - the gift of real value to the audience.

Summary And Conclusions

As sponsorship remains an important marketing element with the promise of playing an even larger role in the future, the present work began with the objective of developing tools with which to quantify the business building effects of sponsorship. At the present stage of this endeavor, some intriguing findings have emerged, which are perhaps worth discussing in terms of their potential implications.

The first hypothesis was that Sponsorship has recall and persuasion effects like advertising does. The SEI studies appear to confirm the existence of a persuasion effect.

The second hypothesis was that Sponsorship operates through different cognitive processes than those utilized by traditional advertising. Although it is too soon to draw any firm conclusions, there does indeed appear to be support for this hypothesis. If it were advertising, sponsors ought not to have seen virtually flat or negative results on brand perception along with dramatically positive results on consideration set and purchase intent. As marketers have long suspected, sponsorship appears to have its positive business effects based on different cognitive processes than straight product sell advertising.

The third hypothesis was that Advertising changes the consumer's perception of a specific product while sponsorship changes the consumer's perception of a specific sponsor - which can rub off positively on the brands of that sponsor in terms of willingness to purchase those brands. This would appear to be the case in the studies of brand attribute perception change. We might speculate that where sponsorship works, the perception of the sponsor changes in the direction of "those are pretty good folks, I ought to try to give them a fair chance."

We might characterize this as Gratitude or Appreciation. Scales such as Trust, Liking and Respect might also measure this dimension. The perception of the sponsor has changed in a positive way, and as hypothesized, that change in perception of the sponsor - although the perception of the brands did not change - did positively change the consumer's willingness to buy the brands.

In looking at the present work in the context of the updated ARF Model, we would ascribe the primary sponsorship effect analyzed herein as belonging within the Persuasion Level. It is a special case of persuasion where the people behind a brand become more attractive rather than the brand itself becoming directly more attractive through the increased perception of one or more of its valued benefits.

Don Schultz and Scott Bailey, in their provocative paper "Customer/Brand Loyalty in an Interactive Marketplace" (Schultz and Bailey, 2000), make profound references to Aristotle's concept of distributive justice, and its derivative, J. Stacy Adams' concept of inequity in social exchange. A consumer may change behavior based upon a perceived inequity in a situation. One such perceived inequity situation might be feeling grateful for a sponsor having brought me a program, while I have not recently considered buying that sponsor's product.

These studies indicate that the sponsorship of content can cause audiences exposed to increase their willingness/intention to buy the sponsor's product - not a surprising finding since that has always been the expectation which causes advertisers to use sponsorship. However, the uncertainty as to this outcome has held sponsorship investments down to a couple of percentage points of total advertising expenditures. This accumulating body of work ought to give advertisers more certainty as to the return on sponsorship investments and therefore lead to marketing allocation shifts in the direction of sponsorship which reflect the higher levels of persuasion found in this type of marketing communication as compared to similar measures taken of, for example, television commercials.

The empirical proof of performance that has always been missing in this form of marketing communications comes at the right time. Looking ahead, it is expected that television audiences will become increasingly able to avoid exposure to television commercials through the use of the digital version of VCRs started by TiVo and today beginning to be built into cable and satellite set top boxes. In response, advertisers and their agencies have begun to develop more entertaining commercials, increasing use of product placement, self-selected longform programercials, and in this mix, sponsorship should also rise to compensate for the lost commercial impressions. The data we have collected supports the wisdom of using sponsorships more in the future as a way of merging with the programming to avoid zapping and at the same time actually increase persuasion effects per dollar over current average marketing methods.

References

Advertising Research Foundation (1961), Toward Better Media Comparisons

Advertising Research Foundation (2000), Making Better Media Decisions. Available at:http://www.arfsite.org/Webpages/PrimaryPages/MediaModel_7_23_web.pdf

Chook, Paul (1983), Advertising Research Foundation Model for Evaluating Media: Making the Promise a Reality

Harvey, Bill (1997), The Expanded ARF Model: Bridge to the Accountable Advertising Future, Journal of Advertising Research, March/April 1997

Jim Spaeth (2001), The "New" ARF Model.Informed, Advertising Research Foundation, Vol. 4, No. 3, June 2001. Also available at:http://www.arfsite.org/webpages/informed/vol4-no3/vol4-no3.pdf.

Schultz, Don E. and Bailey, Scott (2000), Customer/Brand Loyalty in an Interactive Marketplace, Journal of Advertising Research, May/June 2000

Source

Valuation of Online Program Sponsorships. Bill Harvey, CEO, Next Century Media; Andrew Susman, CEO, Studio One Networks. "Measuring the Effects of Sponsorships." Bill Harvey, Stu Gray; Gerald Despain. May 2006.

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