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Exploring Managers' Perceptions of the Impact of Sponsorship on Brand

Equity

Article  in  Journal of Advertising · June 2001

DOI: 10.1080/00913367.2001.10673636 · Source: OAI

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Exploring Managers' Perceptions of the Impact of
Sponsorship on Brand Equity
T. Bettina Cornwell, Donald P. Roy and Edward A. Steinard II
Sponsorship of sporting and other events has become an increasingly popular marketing communications
vehicle. However, little research has investigated how sponsorship participation is beneficial to a firm and its
brands. This study explores how managers view the brand-equity-building capabilities of their sponsorship-
linked marketing programs over time. In a two-phase survey,fiftymanagers report on the value of sponsor-
ships in building brand equity. Findings show that "leverage," the use of advertising and promotion to sup-
port the sponsorship, and active management involvement are significant predictors of both the perceived
differentiation of the brand from its competitors and adding financial value to the brand.

T. Bettina Cornwell (Ph.D.,
University of Texas at Austin) is
Reader in Marketing, The University
of Queensland.
Donald P. Roy (Ph.D., The
University of Memphis) is an
Associate Professor, Middle
Tennessee State.
Edward A. Steinard II (MBA, The
University of Memphis) is National
Account Manager, Kellogg Company.
The authors acknowledge the
financial assistance of the
Department of Marketing at the
University of Memphis. They thank
Emin Babakus of the University of
Memphis, Marty Horn of DDB
Needham, Biljana Juric of University
of Otago, Helen Katz of Zenith
Media, and Rohert Sparks of the
University of British Columbia for
constructive comments on earlier
drafts of this manuscript, as well as
the editor, Ron Faher, and the
reviewers. They also thank George
Relyea of the University of Memphis
for his technical assistance.
The sponsorship of sports, causes, and events has become an established
communications tool seen as useful in building brand awareness, brand
image, and corporate image (Javalgi et al. 1994; McDonald 1991; Quester
1997; Turco 1995; Witcher et al. 1991). Brand awareness and image, in turn,
are integral to the idea of brand equity, the set of value-adding assets linked
to a brand (Aaker 1996). Both academic (Keller 1993; Park and Srinivasan
1994) and business writers confirm the role that sponsorship can play in
building equity for the brand. Keller (1993, p. 10, emphasis in original), in
his theoretical development of customer-based brand equity, notes that
"anything that causes the consumer to 'experience' or be exposed to the
brand has the potential to increase familiarity and awareness." Likewise,
promotion industry analysts find sponsorship popular as a "platform from
which to build equity and gain affinity with target audiences" (Smith 1996,
p. 15). Empirical work, however, concentrates on only a few brand equity
elements (for example, brand awareness [Sandier and Shani 1992], brand
preference [NichoUs, Roslow, and Laskey 1994], corporate image [Turco
1995], and adding financial value to the brand [Cornwell, Pruitt, and Van
Ness 2001]). No study has considered a broad range of equity elements (see
Cornwell and Maignan 1998 for a review). We therefore explore the poten-
tial of sponsorship to build various aspects of brand equity. Our purpose is to
develop an understanding of how managers view the brand-equity-building
capabilities of their sponsorship-linked marketing programs.

Sponsorship and Brand Equity

Journal of Advertising,
Volume XXX, Number 2
Summer 2001
Cornwell (1995, p. 15) defines sponsorship-linked marketing as "the or-
chestration and implementation of marketing activities for the purpose of
building and communicating an association to a sponsorship." This notion
of orchestration accentuates that the communication goals of sponsorships
are realized only through thoughtful management and considerable lever-
age of the sponsorship investment. Although building brand equity per se
has not been a major discussion in the existing literature on sponsorship,
the objectives of sponsorship overlap extensively with commonly agreed-
upon elements of brand equity. From the perspective of practical impor-
tance, our identification of the potential of sponsorship to build brand equity
and of management's interest in this capability is straightforward. From a
42
tbeory and measurement perspective, our task is more
difficult. Because tbe brand equity literature is rela-
tively new, tbere is no developed and agreed-upon
scale to measure brand equity. We could argue tbat
brand equity, as a concept, is a middle-range tbeory
(Leong 1985), in tbat we see its potential value as a
core concept in marketing and at tbe same time rec-
ognize tbat it is still fragmented and controversial.
Because our focus is on understanding bow manag-
ers view tbe brand-building capabilities of tbeir spon-
sorsbip-linked marketing programs, we bave selected
eigbt areas from Aaker's (1996) conceptualization of
brand equity to wbicb we believe sponsorsbip migbt
contribute. In addition to tbe elements of brand aware-
ness, brand loyalty, and perceived quality, we con-
sider "brand image" as a summary measure of
product-related associations, tbe intangible brand as-
sociation of "corporate image," tbe competitive brand
association of "brand differentiation," and tbe lifestyle/
personality brand association of "brand personality."
Also included is tbe summary outcome of brand eq-
uity, "adding financial value to tbe brand." Our ob-
jective is not to develop or test a comprebensive,
nonoverlapping scale of brand equity dimensions, but
ratber to consider tbose managerially relevant ele-
ments tbat contribute to building brand equity and
tbat migbt be enbanced by sponsorsbip.
Hypotheses Development
On tbe basis of work in management (e.g.. Black
and Boal 1994; Hamel and Prabalad 1994), Amis,
Pant, and Slack (1997) developed a resource-based
view of sponsorsbip. Tbey argued tbat sponsorsbip
can become a distinctive resource capable of offering
a firm a sustainable competitive advantage. Tbe de-
velopment of bypotbeses in tbis section regards cor-
porate investment in sponsorsbip as a distinctive com-
petence tbat may be developed by tbe firm. It is also
important to note tbat, tbougb we are concerned pri-
marily witb management variables and tbe percep-
tions of managers, brand equity is built in tbe mind of
tbe consumer. Tberefore, in bypotbeses development,
we outline bow consumer-based brand equity is de-
veloped tbrougb sponsorsbip-linked communications.
Duration and Brand Equity
In an early study of tbe electronics industry,
Armstrong (1988) found tbat, tbe longer a company
bad been sponsoring sports, tbe more likely sponsor
objectives bad moved from building awareness to
building image. We could also view tbe relationsbip
The Journal of Advertising
of sponsorsbip duration to brand equity from a com-
petitive advantage perspective. Amis, Slack, and
Berrett (1999) argue tbat a necessary precondition
for developing sponsorsbip into a distinctive compe-
tence is tbat it be "imperfectly imitable." Tbus, a
long-term sponsorsbip relationsbip is essential to tbe
development of unique outcomes tbat competitors can-
not duplicate. From tbe consumer perspective, tbe
duration of sponsorsbip association may influence tbe
strengtb of brand associations in memory (cf. Jobar
and Pbam 1999 for examples of bow tbis migbt occur
in sponsorsbip). Seeing a sponsor's name associated
with tbe same sporting event, year after year, gives
tbe consumer multiple opportunities to elaborate
about tbe significance of tbe product-sponsorsbip re-
lationsbip, tbus creating stronger associations in
memory (Keller 1993).
Hla: Tbe longer tbe duration of a sponsorsbip
relationsbip between a company and an
event, tbe greater is tbe perceived con-
tribution to brand equity elements.
Hlb: Tbe longer tbe duration of a sponsor-
sbip relationsbip between a company
and an event, tbe greater is tbe per-
ceived contribution to adding financial
value to tbe brand.
General Versus Distinctive Development
of Brand Equity
It bas been argued tbat sponsorsbip as a communica-
tions medium is not able to carry a detailed product-
based message, as does traditional advertising
(Meenagban 1991). Consequently, sponsorsbips bave
been viewed as valuable in generating awareness for
tbe brand and corporate images in a general sense
(Abratt, Clayton, and Pitt 1987; Hoek, Gendall, and
West 1990; Kuzma, Sbankbn, and McCally 1993;
Marsball and Cook 1992), but less bas been discussed
about tbeir ability to communicate a more sopbisti-
cated, specific message or contribute to otber aspects
of brand equity. From a management perspective,
generating awareness and image are perceived to be
naturally accruing and easily obtained benefits of
sponsorsbip. Tbey are also more general tban tbe
otber aspects of brand equity being studied. Tbere-
fore, building brand awareness, brand image, and
corporate image are cbaracterized bere as "general
brand equity elements," wbereas communication of
brand personality, differentiating tbe brand from com-
petition, developing an image of quality, and brand
loyalty are considered to be "distinctive brand equity
elements." If, as Amis, Slack, and Berrett (1999) sug-
Summer 2001
gest, sponsorship can become a competitive advantage,
then development of these distinctive brand equity ele-
ments will prevent imitation and sustain competitive
advantage but also will take greater involvement and
commitment on the part of management.
From the consumer perspective, it is easier to build
general elements of brand equity than distinctive ones.
If we consider the role sponsorship plays in communi-
cating a message from a hierarchy of effects perspec-
tive (Lavidge and Steiner 1961), sponsorship is most
valuable at early stages of awareness development.
Higher-order effects, such as preference and purchase,
are more difficult for any communication, including
sponsorship, to achieve. Although there are many
hierarchy of effects models in advertising and mar-
keting research (Rammond 1972), they have in com-
mon the modeling of the consumer's progression
through a series of stages in which less complex, less
involved consumer responses are found in early stages
and more involved, complex responses are found in
later stages. The brand equity elements of corporate
image, brand image, and general brand awareness
are simple, uninvolved consumer responses. Learn-
ing a brand's personality and differentiating the brand
from competitors requires that the consumer under-
stands what the brand has to offer and are associated
with the higher-order effect of knowledge (Lavidge
and Steiner 1961) or comprehension (Colley 1961).
Development of an image of quality in the mind of the
consumer implies a positive affective response, in con-
trast to simple brand image or corporate image, which
may not be positive (see Javalgi et al. 1994 for a
discussion of negative image effects in sponsorship).
Finally, brand loyalty is related to conviction and
purchase or adoption of the brand and would there-
fore be the most difficult to achieve.
H2: Overall, sponsorship will make a greater
perceived contribution to general elements
of brand equity (brand awareness, corpo-
rate image, and brand image) than to dis-
tinctive elements (brand personality, dif-
ferentiating the brand from competition,
image of quality, and brand loyalty).
Active Management and Brand Equity
Sponsorship-linked marketing programs have been
criticized for mismanagement and for neglecting the
measurement of program effectiveness (Gilbert 1988).
Crimmins and Horn (1996) find in their study of Olym-
pic sponsors that it is the brand's responsibihty to
articulate the meaning of the sponsorship to the cus-
tomer, and they suggest it is the brand manager's
43
responsibility to maximize the sponsorship's persua-
sive impact. We must ask, then, if there are conditions
in which sponsorships can be utilized to build distinc-
tive brand equity elements. Adopting the resource-based
view of sponsorship (Amis, Pant, and Slack 1997; Amis,
Slack, and Berrett 1999), we find that sponsorships
can be managed in such a way to produce a distinc-
tive competence. Generalized awareness or image can
be built simply by engaging in sponsorship, but ac-
tive sponsorship management is required to build a
more sophisticated meaning. Moreover, active man-
agement involvement should enable, ultimately, a
greater impact on the financial value of the brand.
H3a: The extent of active management in-
volvement in sponsorship development
will be associated with a greater per-
ceived contribution to distinctive ele-
ments of brand equity.
H3b: The extent of active management in-
volvement in sponsorship development
will be associated with a greater per-
ceived contribution to adding financial
value to the brand.
Leverage and Brand Equity
Advertising spending generally is considered to build
corporate reputation (Gregory and Weichmann 1997).
In a study of brand equity, Gobb-Walgren, Ruble, and
Donthu (1995) review the antecedents and conse-
quences of brand equity and suggest that firms with
larger advertising budgets achieve higher levels of
brand awareness and brand equity. This echoes the
work of Aaker and Biel (1993) on the relationship of
advertising to brand equity, in which they conclude
that a major contributor to brand equity is advertis-
ing. This logic can be extended to sponsorship; how-
ever, sponsoring differs from advertising in that the
sponsorship fee, which allows a sponsor to identify
with the sponsored event, may not carry with it a
meaningful communications component. Sponsoring
needs articulation through advertising to be effective
(Grimmins and Horn 1996), and it is the leverage (pro-
motional expenditures over and above the sponsorship
fee, including items such as advertising, sales promo-
tion, and client entertainment) that is so important to
successful sponsorship-linked communication programs.
It is thus the creative use of leverage by management
that will create a differentiating sponsorship.
H4a: Hi^er sponsorship leverage will be associ-
ated with a greater perceived contribution
to distinctive brand equity elements.
44
H4b: Higber sponsorsbip leverage will be associ-
ated with a greater perceived contribution
to addingfinancialvalue to tbe brand.
Method
Our researcb design included a two-stage survey of
corporate sponsorsbip managers, witb data collected
during tbe summer of 1996 and again in tbe summer
of 1997. Tbe first four-page survey was distributed
via fax, detailed tbe university-based researcb, and
requested participation in tbe study. Conditions out-
lined by Dickson and Maclacblan (1996) as favorable
to tbis metbod generally were met. Tbe survey sam-
pling frame consisted of tbe entire communications list
of tbe 1996 Sports Sponsorship Factbook, a directory
tbat lists 1,165 companies sponsoring various sports,
as well as a personal contact for eacb. Tbis list offered
tbe best contacts for key informants, people knowl-
edgeable about tbe issues being researcbed and able
and willing to communicate about tbem (Kumar, Stern,
and Anderson 1993). We recognize tbat utilizing key
informants requires some researcb trade-offs between
cost and tbe potential for error (Brown and Luscb 1992).
Altbougb tbere is potential bias stemmingfi-omvested
interests and social desirability, we believe tbese
managers posses tbe most relevant information.
Sports sponsors witb no fax number or witb inter-
national numbers were deleted, leaving a total of 1,116
individuals. We attempted to fax eacb organization
up to tbree times but could not reacb 84 of tbem.
Initial returns came by fax (some tbe same day). Af-
ter 99 responses were received and tbe rate of return
bad tapered, a follow-up survey was faxed to a ran-
domly selected balf of tbe nonresponding managers.
(Long-distance faxing costs probibited refaxing tbe
entire list of nonrespondents.) Tbe total number of
responses was 182, wbicb represents 17.63% of tbe
1,032 successful facsimiles. Ultimately, only 146 sur-
veys were usable. We believe tbis low response rate
bas two causes: corporate privacy policies (wbicb
were mentioned by some firms) and tbe deluge of
sponsorsbip solicitations. Solicitation of sponsorsbip
support bas become problematic, witb some firms
receiving more tban 1,000 requests per year
(Copeland, Frisby, and McCarville 1996). Our univer-
sity logo on tbe cover page was assumed by some com-
panies to be a request to sponsor a university sport.
One ye£ir later, tbe second survey instrument was
mailed to tbe 146 respondents of tbe first survey. Tbis
time lag afforded several advantages. First, managers
bad adequate time to observe sponsorsbips and any
brand-equity-building effects stemming from tbem.
The Journal of Advertising
Second, tbe 12 montbs enabled us to measure tbe man-
agement practices in place during tbe year for wbicb
sponsorsbips were being assessed. Tbird, distancing
tbe measurement of sponsorsbip initiation, policy, and
managementfi-omtbe assessment of tbe sponsorsbip's
contribution to brand equity elements was tbougbt to
reduce any social desirability response bias. Two re-
ports on sponsorsbip, considered to be of interest to tbe
respondents, were enclosed witb tbe second question-
naire to encourage participation. A faxed follow-up re-
minder was sent to all nonrespondents. Twenty of tbe
original survey respondents could not be reacbed in tbe
second data collection (due to cbange of address/fax or
personnel). Of tbe 126 questionnaires delivered, 51 com-
panies (40%) responded, and 50 completed question-
naires were deemed usablefiromtbe second survey.
Survey Instruments
Tbe survey instruments were developed witb sponsor-
sbip managers in mind and pretested witbin a company
situation. Revisions resulted in sborter, less cluttered in-
struments, tbougbt to be more easily comprebended and
tberefore more likely to be completed, liie first survey
instrument was devoted to a detailed imderstanding of
tbe company and its overall sponsorsbip management
activities. Included were questions about tbe company,
any establisbed sponsorsbip policies, sponsorsbip proposal
evaluation metbods, sponsorsbip oversigbt, leverage, and
metbods used to measure sponsorsbip effectiveness. Re-
spondents also were asked to list tbe firm's tbree largest
sponsorsbip commitments in terms of financial invest-
ment, and tbe remaining questions were tied to eacb oftbe
sponsorsbip activities listed. For eacb sponsorsbip, tbe
respondent provided information on target audience, ef-
fectiveness of tbe sponsorsbip in reacbing tbe target audi-
ence, duration, leverage ratio (promotional cost: sponsor-
sbip fee), and initiation of tbe sponsorsbip.
Tbe second-stage survey was based on a two-page
instrument. To ensiure tbat tbe managers responded
witb regard to tbe same sponsorsbips in botb surveys,
tbe second survey instrument listed tbe sponsorsbips
reported to us in tbe previous year, and tben followed
witb eigbt brand equity questions for eacb sponsorsbip
listed. Respondents were asked to indicate tbeir agree-
ment or disagreement using a five-point Likert scale
witb ancbors of "very good" and 'Very poor."
Measures in the First Survey
Leverage and Duration. Respondents were asked
about tbe relationsbip between promotional spend-
ing and tbe sponsorsbip fee. Tbis question was worded
46 The Journal of Advertising

Tabie 1
Sponsor industries for Respondents of the First and Second Surveys

Sponsor Industry First Survey Second Survey

n % n %
Automotive related 39 26.7 11 22.0
Food/beverage 18 12.3 11 22.0
Retailer/restaurant 13 9.0 4 8.0
Consumer goods 13 9.0 5 10.0
Financial services 11 7.5 3 6.0
Entertainment/lottery 11 7.5 2 4.0
Sporting goods/apparel 11 7.5 3 6.0
Communications/office 10 6.8 2 4.0
Airline 8 5.5 3 6.0
Service provider 5 3.4 3 6.0
Marine products 3 2.1 3 6.0
Not reported 4 2.7 0 0
Total 146 100 50 100

Measures in the Second Survey
Tbe pinpose of tbe second survey was to measure
brand equity and sponsorsbip success. Eigbt items ques-
tioned the value of the sponsorship in (1) building brand
awareness, (2) building positive corporate image, (3)
building positive brand image, (4) differentiating tbe
brand from tbat of tbe competitor, (5) building tbe
brand's personality, (6) building brand loyalty for tbe
brand, (7) building an image of quality for tbe brand,
and (8) adding financial value to tbe brand. Questions
1-7 measured tbe brand equity elements outlined pre-
viously. Tbe last question on "adding financial value to
tbe brand" was included as a summary measure of tbe
overall value of sponsorsbip to tbe brand.
Characteristics of Survey Respondents
Tbe 146 first-survey participants varied by title but
were all able to provide detailed information regarding
company sponsorsbips. Tbe respondents to tbe first
survey were responsible for 344 sponsorsbips witb re-
ported financial investments in sponsorsbip of $225
million. In a cbeck for nonresponse bias, no significant
differences were found between first-survey
nonrespondents and second-survey respondents on any
survey cbaracteristic. Tbe sponsors' industries and tbe
types of sponsorships in which they engaged are shown
in Tables 1 and 2, respectively. Despite tbe low re-
sponse rate, tbere are several indicators tbat support
the representativeness of oiur sample. For example, the
strong representation of motorsports and golf sponsor-
ships in our sample parallels the national emphasis
placed on sponsorship of these sports. During the same
time period as our study, motorsports was the most
often sponsored event, and golf was the second most
popular (Smith 1996, p. 15). A wide range offirmswas
represented in the study; twenty-eight firms (19.17%)
were 1996 Fortune 500 companies.
Findings
Duration and Brand Equity
Hla and b stated tbat, tbe longer tbe
duration of a sponsorsbip relationsbip between a com-
pany and an event, tbe greater is tbe perceived contri-
bution to brand equity elements and adding financial
value to tbe brand. To examine tbese bypotbeses, long-
term sponsorships (duration greater than five years)
were contrasted with short-term sponsorsbips (dura-
tion of less tban three years). To consider the contrast
of long- and short-term durations, midrange sponsor-
ship durations were dropped for tbis analysis. Table 3
reports multivariate t-tests for tbese differences. Tbe
findings of tbe test are just sby of significamce at tbe .05
level (Wilks' lambda=.83, F (8, 79)=2.029,p=.053). All
differences, bowever, were in tbe expected direction,
indicating tbat long-term sponsorsbips were viewed by
managers as making more of a contribution to brand
equity elements and tbe financial success measvire.
Therefore, Hla and b receive limited support.
Summer 2001
as follows: "Wbat are the approximate budget ratios
for eacb sponsorsbip (Promotional Cost: Sponsorsbip
Fee)?" Closed-end answer alternatives were "ratio of
1:1 or less," "ratio of 2:1," "ratio of 3:1," "ratio of 4:1,"
and "ratio of 5:1 or greater." Tbese ratios were based
on business press discussions of typical leverage ratios
in sports sponsorsbips. Duration of tbe sponsorsbip
was measured by tbe following closed-end question:
"Please indicate tbe number of years your organization
bas engaged in tbese sponsorsbips." Answer alterna-
tives were tbree years or less, tbree to five years, and
five or more years.
Management Involvement Index. Altbougb many
autbors bave written about tbe importance of spon-
sorsbip management, empirical work typically takes
tbe form of a survey on management motivations,
objectives, and outcomes (e.g., Scott and Suchard 1992;
Thwaites and Carruthers 1998) or case studies that
evaluate management's contribution in a post boc
manner (e.g.. Amis, Slack, and Berrett 1999). In ligbt
of tbe importance of sponsorsbip management to spon-
sorsbip outcomes, an objective measure is needed.
Tbus, a management involvement index reflecting
tbe degree of active management of sponsorsbip ac-
tivities was developed. Tbe information constituting
this measure is based on tbe answers managers pro-
vided to several questions on tbe first survey instru-
ment. Tbe index was developed on the basis of tbe
following five elements.
First, one point was given for indication of an es-
tablisbed corporate policy regarding tbe types of spon-
sorsbips tbat would not be. undertaken (e.g., restricted
form of participation, restricted affiliations, restric-
tion to particular sports). Maintenance of a consis-
tent image in tbe development of sponsorsbip is a
concern in many industries (e.g., fast food; see Cousens
and Slack 1996). Setting policies "up front" regarding
tbe nature of sponsorsbip participation belps man-
agement stay focused. In addition, some restrictions,
sucb as category exclusivity, can increase tbe distinc-
tive impact of tbe sponsorsbip program (Amis, Slack,
and Berrett 1999).
Second, one point was given for indication of a for-
malized sponsorsbip proposal evaluation metbod.
Witb the large number of unsolicited sponsorship pro-
posals managers receive (Copeland, Frisby, and
McCarville 1996), an effective mecbanism for priori-
tizing tbese is a key management instrument.
Tbwaites and Carrutbers (1998), in tbeir study of tbe
application of management guidelines to Englisb
rugby, suggest tbat baving a proposal evaluation
metbod in place is a determinant of effective sponsor-
sbip management; Several evaluation scbemes are
45
found in tbe literature (e.g., Irwin and Asimakopoulos
1992), and naturally, firms develop tbeir own.
Tbird, one point was given for indication tbat balf
or more of tbe sponsorsbip evaluation metbods were
active (e.g., consumer survey, focus groups) ratber
tban passive (e.g., commercially available services).
Altbougb Tbwaites and Carrutbers (1998) place value
on employing a range of sponsorsbip measures, in tbis
index, tbe type of measurement utilized by manage-
ment is empbasized. Active evaluation metbods require
more management involvement and bave tbe potential
for more company-specific, distinctive analysis.
Fourtb, one point was given for indication that the spon-
sorships were initiated by tbe company ratber tban by an
outside agency or tbe sponsorsbip properties tbemselves.
Sponsorsbip-linked marketing programs differ fraia tradi-
tional advertising and promotional campaigns in tbat tbey
must meld tbe interests of at least two parties (tbe com-
pany and tbe sponsored event) and usually many more.
Tberefore, participation in sponsorsbip programs is often
a result oftbe persuasiveness of tbe to-be-sponsored group.
As an example, Polonsky and colleagues (1995) find tbat
the majority of rugby sponsorsbips in Australia were initi-
ated by tbe sport, not tbe sponsoring organization. In
addition, top management's sport interests so often
are reflected in a firm's cboice of sport to sponsor
(Croft 1995) tbat, wben stud5dng motivations for spon-
sorsbip expenditures, Scott and Sucbard (1992) in-
cluded a motivational subject area called "manager's
cultural and sporting interests." Tbis bas been termed
tbe "bobby motive" (Tbwaites and Carrutbers 1998)
and "ad boc" deciding (Amis, Slack, and Berrett 1999).
In contrast, wben tbe firm initiates tbe sponsorsbip
agreement, it bas greater potential to matcb corpo-
rate goals and objectives. Also, tbis firm bebavior is
more likely tbe product of management involvement
tban management reaction.
Fiftb, tbe index also included one-balf point for eacb
sponsorsbip reported, as an indication of management's
commitment to sponsorsbip as a promotion metbod.
Eigbty-seven percent of large Canadian sponsors (n=65)
surveyed by Copeland, Frisby, and McCarviUe (1996)
reported that they had, in the past, discontinued a
sponsorship. Reasons most often cited included low re-
turn on investment and limited value in reaching cor-
porate objectives. Other reasons te drop a sponsorship
included changing corporate priorities, budget cutbacks,
poor execution by event organizers, increased sponsor-
sbip costs, and conflict witb organizers. Witb all tbese
cballenges involved witb sponsorsbip, tbe maintenance
of several sponsorsbips is an indication of management's
commitment to tbe promotional approacb beyond tbe
casual "bobby motive."
Summer 2001 47

Tabie 2
Sponsorship Types for Respondents of the First Survey and Second Survey

Sponsorship Type First Survey Second Sun/ey

n % n %
Motorsports 83 24.4 35 28.0
Golf 31 9.1 11 8.8
Olympics 23 6.8 3 2.4
Baseball 21 6.2 5 4.0
Collegiate sports 17 5.0 7 5.6
Tennis 15 4.4 2 1.6
Basketball 13 3.8 7 5.6
Football 10 2.9 5 4.0
Other sports 76 22.4 35 28.0
Nonsports 49 14.4 14 11.2
Unknown 2 0.6 1 0.8
Total 340 100 125 100

Tabie 3
Duration of Sponsorship and Mean Ratings of Value in Buiiding Brand Equity
and Adding Financial Value to the Brand

Duration of Less than Duration of More than

3 Years, n=39 5 Years, n=49
Brand Equity Dimension (Meanf (Mean)^
Brand awareness 3.77 4.20
Corporate image 4.03 4.45
Brand image 4.03 4.31
Differentiate brand 3.36 3.98
Brand personality 3.74 4.04
Image of quality 3.77 4.12
Brand loyalty 3.31 3.78
Add financial value 3.44 4.02
Mean ratings on five-point Likert scale with 5 equal to "strongly agree." For example, in response to the item "This sponsorship was valu-
able in building brand awareness," more managers indicated "agree" or "strongly agree" when sponsorship duration was more than five
years than when sponsorship duration was less than three years.

General Versus Distinctive
Development of Brand Equity
As expected, sponsorsbips were perceived by managers
te contribute more value te general elements of brand
equity than te distinctive elements. A paired t-test of the
average general and ciistinctive element scores showed a
significant difference in tbe expected direction (t (92)=6.645,
p<.001). Tbe ranked average contribution of sponsorsbip
te brand equity elements is sbown in Table 4. On a five-
point scale witb a score offivecorresponding witb tbe term
"strongly agree," tbe mean of tbe general measures of
brand equity was 4.19, and tbe mean of tbe distinctive
measures of brand equity was 3.87. Tbe contribution of
sponsorsbip te corporate image (4.28) was highest, fol-
lowed by brand image (4.24) and brand awareness (4.05).
H2 is tberefore supported, in tbat sponsorsbips were per-
ceived by managers te make a greater average contribu-
tion te general elements of brand equity.
Altbougb our interest is primarily in the theoreti-
cal cut between general and distinctive elements, it is
also important to note that tbis grouping is supported
empirically. Altbougb a single-factor model fit tbe
data (cbi-square=16.83, df=14, p=.O2, goodness-of-fit in-
48
Table 4
Ranked Average Ratings of Sponsorships' Contribution to Brand Equity Elements
Brand Equity Elements
Corporate image
Brand image
Brand awareness
Image of quality
Brand personality
Differentiate the brand
Build brand loyalty
dex=.95, adjiisted goodness-of-fit mdex=.9O, and root mean
square residual=.O32), examination of the standardized
residuals of the single-factor model suggested that a model
other than a single-factor solution would fit the data bet-
ter. In particular, two items had standardized residuals
exceeding 1.96, and a third was moderately high (1.78). As
Anderson and Gerbing (1988, p. 417) note, 'Svhen another
factor on which [an item] should belong exists, an obverse
pattern of large positive residuals will be observed with
the indicators of this factor." Indeed, the three l a i ^ load-
ings were noted for items hypothesized to form the "dis-
tinct brand equity elements" factor.
An oblique two-factor solution was estimated by con-
straining the correlation between factors to be .99. A two-
factor model with estimated and correlated errors between
image elements (due to methods factors, cf Gerbing and
Anderson 1984)fitthe data (chi-square=7.73, df=12,p=.81,
goodness-of-fit index=.98, adjusted goodness-of-fit in-
dex=.95, and root mean square residual=.O21). These com-
bined analyses confirm that, though the brand equity ele-
ments are highly correlated, there is evidence of a two-
factor solution supporting the theoretical discussion of
general versus distinctive elements.
Because of the correlated nature of the dependent
variables (Table 5), multivariate regression using the
MANOVA procedure in SPSS (Tabachnick and Fidell
1989) was used to test hypotheses regarding the pre-
dictors, active management (H3a and b), and leverage
(H4a and b). This approach was used to determine the
presence of multivariate significance before univariate
analysis was conducted. The multivariate result was
significant (Wilks' lambda=.66, F (16,166)=2.369,
p=.003), which indicates that one or more univariate
relationships are significant. The following sections re-
port the results of these univariate analyses.
Active Management and Brand Equity
H3a received support for only one of the four distinc-
tive brand equity elements (Table 6). In analyzing indi-
The Journal of Advertising
Wean Standard Deviation
4.28 .86
4.24 .84
4.05 1.05
4.04 .83
4.01 .93
3.75 1.01
3.68 1.02
vidual measures of brand equity, the extent of active
management involvement in sponsorship development
was positively related only to differentiating the brand
fi-om competitors (t=2.814, p<.05). Differentiating the
brandfiromcompetitors is a distinctive measure of brand
equity that responds to cultivation by management.
Also shown in Table 6, H3b received support. The ex-
tent of active management involvement in sponsorship
development was positively related to adding financial
value to the brand (t=2.931,p<.05).
Leverage and Brand Equity
Of the distinctive brand equity elements, leverage
was a significant contributor to differentiating the
brand from its competitors (t=2.814,p<.05. Table 6),
providing only partial support for H4a. Higher spon-
sorship leverage was related to greater perceived con-
tribution to the financial value of the brand (t=3.198,
p<.05), thereby supporting H4b.
Discussion and Implications
The most important contribution of this study is to
demonstrate that, as perceived by managers, spon-
sorships under active management can contribute to
the difficult task of differentiating a brand from its
competitors and adding financial value to the brand.
This supports the theoretical perspective of Amis, Slack,
and Berrett (1999), which views corporate sponsorship
as a distinctive competence that can be developed by a
firm. The management index in this study valued the
manager's focus through a corporate policy on sponsor-
ship appropriate to the firm and through firm initia-
tion of sponsorship activities. These acts of managing
are particularly importeint in developing a differenti-
ated image and in adding financial value to the brand.
A second major contribution of this research is to
offer empirical support for the importance of leverag-
ing a sponsorship. In addition to active marketing
Summer 2001 49

Tabie 5
Correlations of Dependent Variabies

BA Cl Bl DB BP IQ AF BL
Brand awareness (BA)
Corporate image (Cl) 46
Brand image (Bl) 68 .61
Differentiate brand (DB) 65 .39 .66
Brand personality (BP) 64 .47 .70 .58
Image of quality (IQ) 48 .54 .61 .45 .58
Add financial value (AF) 52 .32 .59 .61 .52 .42
Brand loyalty (BL) 59 .46 .58 .51 .60 .51 .50

Table 6
Univariate Regression Analysis of Coefficients and Significance

Dependent Variables Predictor Variables B t-Value Significance

Brand awareness Leverage 12960 1.51 .14
Management Involvement Index 04027 .47 .64
Corporate image Leverage 04358 .61 .55
Management Involvement Index 02528 .35 .73
Brand image Leverage 11796 1.73 .09
Management Involvement Index 08761 1.29 .20
Differentiate brand Leverage 18677 2.38 .02*
Management Involvement Index 22040 2.81 .01*
Brand personality Leverage 04544 -.59 .56
Management Involvement Index 09735 1.26 .21
Image of quality Leverage 07233 1.05 .30
Management Involvement Index 00906 .13 .90
Brand loyalty Leverage 05515 .65 .52
Management Involvement Index 09258 1.10 .28
Add financial value Leverage 23430 3.20 .002*
Management Involvement Index 21440 2.93 .004*
'Significant at p<.05.
Notes: Multivariate test results: Wilks' lambda=.66, F(16, 166)=2.369, p=.003.

management, increased leverage significantly contrib-
uted to perceptions of differentiating the brand from
competitors and adding financial value to the firm.
This finding contributes to the growing argument that
sponsorships must be supported by collateral invest-
ments in advertising and promotion. It also contributes
to the paradigm shift taking place with regard to the
proper role of advertising in relation to other promo-
tion and commxmication alternatives (Rust and Oliver
1994). Promotional programs in which sponsorship-
linked marketing is the focus of the communications
platform and traditional advertising has a supporting
role are not exceptions to the rule any longer. In sum-
mary, this is the first time in the literature on sponsor-
ship that management inputs to sponsorship have been
measured objectively and then related to managers'
perceived sponsorship outcomes.
This study offers some support to the popular wis-
dom that longer sponsorship relationships lead to
stronger perceived effects on brand equity. Thus, the
role of sponsorship duration continues to be worthy of
additional researcher attention. Sponsorship dura-
tion is important because a repeated sponsorship link
is needed to register with the consumer and can argu-
ably function like repetition in advertising by activat-
ing linkages to the brand node in the consumer's
memory. In addition, because sports sponsorship is
event based and requires more orchestration than
50
traditional communications media, there is perhaps
a steeper learning curve for managers seeking to maxi-
mize sponsorship's contribution to brand equity.
Limitations and Suggestions to
Researchers
The inability of the active management index to
predict managers' perceptions of sponsorship's con-
tribution to building brand personality, an image of
quality, and brand loyalty might be related to the fact
that the management index is more oriented toward
controlling the sponsorship than toward developing
it. Future research might be directed toward forming
an index that measures the key management activi-
ties that contribute not only to managing and control-
ling, but also to developing sponsorships (e.g., brand-
event congruence assessment). The absence of a sig-
nificant relationship between leverage and the three
brand equity elements of building brand personality,
an image of quality, and brand loyalty might be be-
cause this study did not control for the type of lever-
age utilized by the firm. For example, coupon distri-
bution in conjunction with sponsorship might further
the goal of developing brand loyalty, whereas spon-
soring a celebrity in advertising that matched the
image of the sport and brand might be used to build
brand personality. In summary, even more detailed
information than that collected for this study will be
needed to examine more fuUy the contribution of spon-
sorship to distinctive elements of brand equity.
Our sponsorship leverage measure (promotional
cost: sponsorship fee) was not discriminating at the
lower end of the ratio. The data were skewed toward
the 1:1 ratio and therefore limiting. Future studies
should seek to develop a more refined measure of
promotional spending. This might be accomplished
by refining a ratio scale as utilized in this study.
Another alternative would be to gather actual promo-
tion and sponsorship fee figures. This alternative,
however, might be hampered by corporate confidenti-
ality policies.
This study was limited to sports sponsors, and find-
ings may not be generalizable to sponsorship of the
arts, charitable events, or other types of sponsorship.
Although we believe the sample to be representative
with regard to sports sponsored, the low response
rate raises other questions of generalizability. Even
though managers offered critical assessments of some
sponsorships, it is probable that respondents with a
lack of perceived success were less likely to have re-
sponded to the second survey; therefore, the data
may be biased by underrepresenting managers with
The Journal of Advertising
less positive sponsorship outcomes. Because the sur-
veys were sent to specific persons and because we
requested their name and address if they wished to
receive a summary of the results of the study, we feel
that consistency was maintained between the two
surveys with regard to the respondents. However, it
is possible that, despite our efforts to reach the same
manager with both surveys, they may have been com-
pleted by different people. Also, the use of a single
key informant in each company could be improved by
the use of multiple informants from various audi-
ences. Future studies also might focus on the devel-
opment of consumer-based brand equity built in the
minds of consumers.
In summary, this research makes a first step in un-
derstanding how managers view the value of sponsor-
ship-Unked marketing in building brand equity. It also
suggests that the potential contribution of sponsorship,
when seeking to build a sophisticated, long-standing
communications platform, is largely unrealized. These
findings invite future research on the relationship be-
tween the management of sponsorship-linked market-
ing and the development of brand equity.
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