Brand recommendation may be the ultimate yardstick for measuring sponsorship effectiveness in the digital age
Thoughts from the Aha! Research team: Sponsorship of sports, arts, and charitable events has developed into a mainstream marketing activity no longer in need of extensive introduction and justification. It is regarded as an important tool for marketers who seek to achieve favourable publicity for a company and/or its brands within a certain target audience by associating it with a popular activity not directly linked to the company's normal business. In fact, event sponsorship of particularly big-ticket events with global audiences, such as the FIFA World-Cup, Rugby Sevens, and the Olympic Games, accounts for a significant investment by corporate brand marketers and continues to grow. Over the past two decades, the growth in sponsorship-linked marketing expenditure has outstripped the growth in advertising expenditure by several percentage points with the (non-Olympics year) 2007 figure for sponsorship topping US$37 billion worldwide.
To justify these hefty investments, marketers and their agencies are spending great effort on evaluating the effectiveness of their sponsorship investments through brand visibility measurements such as brand awareness, brand recall, and brand recognition. Other measurements are also employed such as brand image transfers, purchase intent, and future financial performance analysis. However, the correlation between increased brand visibility and increased brand sales has been difficult to establish as extensive performance analysis is prohibitively complex. Visibility measurements are merely first-line measures of sponsorship impact and do not themselves serve to facilitate understanding of consumer engagement with sponsorship. Clearly, there is a need for a measurement tool that is easy to administer, analyze, interpret and most importantly, has a strong link between sponsorship investment and brand profitability.
In the digital age, marketers need to reconsider the applicability of traditional measurements of sponsorship effectiveness. They need to recognize the importance of online social media in building their brand equity. The power of word-of-mouth is amplified exponentially through online social media and gossip is no longer limited to groups “gathering around the water-cooler”. When a consumer makes a brand recommendation online, it has an immediate and global audience and carries the credibility of a non-commercial message. As a result, the consumer is increasingly taking control over the marketing communication function and the firm is no longer in exclusive control. Online word-of-mouth through consumer generated advertising, product review blogs, and other social media, can build or destroy brands in the wink of an eye.
For corporations as well as brands, online social media offer immense opportunities to build equity globally so building and monitoring positive brand recommendation through word-of-mouth should be an essential element of any brand strategy. Unquestionably, brand recommendation has never been so important to marketers.
Several studies have found that, in most industries and in most economic conditions, brand recommendation is a strong predictor of future growth and profitability. This necessitates that one of the primary communication objectives of marketers should be to increase the propensity for consumers to recommend their brand though word-of-mouth.
If brand recommendation is a significant driver of brand equity and is also strongly correlated to future brand growth and profitability, it may just be the ultimate yardstick for measuring sponsorship effectiveness.
A study conducted by Hong Kong based Aha! Research among Mainland Chinese consumers in the online panel of Global Market Insite (GMI), found that brand recommendation is a valid measurement of sponsorship effectiveness. Over the three days immediately following the closure of the 2008 Beijing Olympics, a total of 1,330 online surveys were completed. The sample of online consumers surveyed was over the age of 18 and closely representative of China’s national online population.
This study found that brand sponsorship has a positive effect on both brand recommendation and attitude towards the brand. Claimed sponsorship (correctly or incorrectly recognizing a brand as an official sponsor) is critically important in achieving high levels of brand recommendation. Sponsors with a high level of claimed sponsorship, achieved a higher level of recommendation than sponsors with low levels of claimed sponsorship. Likewise, non-sponsor brands with a high level of claimed sponsorship also achieved high levels of brand recommendation, thus suggesting successful ambush marketing.
The findings clearly underscore the fact that the distinction between an official sponsor and a non-sponsor is critical.
Measuring brand recommendation in digital social media should be an essential element of measuring the effectiveness of sponsorship on future earnings. This does not only apply to measuring sponsorship effectiveness, but to all marketing activities.
To justify these hefty investments, marketers and their agencies are spending great effort on evaluating the effectiveness of their sponsorship investments through brand visibility measurements such as brand awareness, brand recall, and brand recognition. Other measurements are also employed such as brand image transfers, purchase intent, and future financial performance analysis. However, the correlation between increased brand visibility and increased brand sales has been difficult to establish as extensive performance analysis is prohibitively complex. Visibility measurements are merely first-line measures of sponsorship impact and do not themselves serve to facilitate understanding of consumer engagement with sponsorship. Clearly, there is a need for a measurement tool that is easy to administer, analyze, interpret and most importantly, has a strong link between sponsorship investment and brand profitability.
In the digital age, marketers need to reconsider the applicability of traditional measurements of sponsorship effectiveness. They need to recognize the importance of online social media in building their brand equity. The power of word-of-mouth is amplified exponentially through online social media and gossip is no longer limited to groups “gathering around the water-cooler”. When a consumer makes a brand recommendation online, it has an immediate and global audience and carries the credibility of a non-commercial message. As a result, the consumer is increasingly taking control over the marketing communication function and the firm is no longer in exclusive control. Online word-of-mouth through consumer generated advertising, product review blogs, and other social media, can build or destroy brands in the wink of an eye.
For corporations as well as brands, online social media offer immense opportunities to build equity globally so building and monitoring positive brand recommendation through word-of-mouth should be an essential element of any brand strategy. Unquestionably, brand recommendation has never been so important to marketers.
Several studies have found that, in most industries and in most economic conditions, brand recommendation is a strong predictor of future growth and profitability. This necessitates that one of the primary communication objectives of marketers should be to increase the propensity for consumers to recommend their brand though word-of-mouth.
If brand recommendation is a significant driver of brand equity and is also strongly correlated to future brand growth and profitability, it may just be the ultimate yardstick for measuring sponsorship effectiveness.
A study conducted by Hong Kong based Aha! Research among Mainland Chinese consumers in the online panel of Global Market Insite (GMI), found that brand recommendation is a valid measurement of sponsorship effectiveness. Over the three days immediately following the closure of the 2008 Beijing Olympics, a total of 1,330 online surveys were completed. The sample of online consumers surveyed was over the age of 18 and closely representative of China’s national online population.
This study found that brand sponsorship has a positive effect on both brand recommendation and attitude towards the brand. Claimed sponsorship (correctly or incorrectly recognizing a brand as an official sponsor) is critically important in achieving high levels of brand recommendation. Sponsors with a high level of claimed sponsorship, achieved a higher level of recommendation than sponsors with low levels of claimed sponsorship. Likewise, non-sponsor brands with a high level of claimed sponsorship also achieved high levels of brand recommendation, thus suggesting successful ambush marketing.
The findings clearly underscore the fact that the distinction between an official sponsor and a non-sponsor is critical.
Measuring brand recommendation in digital social media should be an essential element of measuring the effectiveness of sponsorship on future earnings. This does not only apply to measuring sponsorship effectiveness, but to all marketing activities.
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