An attitudinal approach to determining Sponsorship ROI

Abstract

PurposeUsing multi-wave survey data, the authors quantified the financial impact of a sponsorship. The purpose of this paper is to predict the number of new buyers based upon changed brand attitudes, consistent with a hierarchy of effects model. The authors then established the financial return on the sponsorship spending by estimating the customer lifetime value (CLV) of these new buyers.Design/methodology/approachThe authors collected the data around a major college football bowl game. Six phases of data collection were used to determine purchasing behavior and brand attitudes of attendees before and after the sponsored event, in comparison to television viewers of the event and the general public. The authors applied Lavidge and Elrick’s (1961) attitudinal constructs as the independent variables in a logistic regression to predict future purchase. The final data collection was used to validate the model’s prediction.FindingsThe findings show that the model accurately predicted the number of new customers after one buying cycle for the sponsor’s products. The authors also quantified the positive impact of the sponsorship on the CLV of existing customers within the same time frame.Originality/valueThe managerial implications of this study are significant. Sponsorships are highly risky, with fixed outlays up front, and unclear benefits to be realized in the future. The authors provide a methodology that not only allows sponsors to measure the effectiveness of the sponsorship, but to determine the return on their sponsorship investment. The authors have taken consumer behavior theory from marketing communications research and combined it with CLV tools, thus allowing marketers to determine the number of new customers that a sponsorship generates, as well as how it influences the buying patterns that drive CLV.