September 2018 (Vol. 58, Issue 3)
What Do We Know about Sports Sponsorships?
Editor-in-Chief John B. Ford highlights the diverse and robust material in this issue’s special package on sports sponsorships. Advertisement typicality (how well an ad is seen to be representative of a particular product category) for the first time is explored in connection to sporting events, he notes. Another paper redefines and offers practical suggestions about ambush marketing—a practice that has become mainstream and increasingly sophisticated, while the last piece of the package shows evidence that the stock market does not value sponsorships equally.
Why Marketers Need New Measures of Consumer Engagement: How Expanding Platforms, the 6-Second Ad, and Fewer Ads Alter Engagement and Outcomes
It’s no secret that the average consumer wants a streamlined advertising experience, and Madison Avenue has responded in kind. The popularity of ad-blockers and time-delayed ad skipping; the running of shorter ads; and the availability of ad-free content on platforms such as Netflix are all indicators of this trend.
In this shrinking world of advertising, marketers need better tools to track these new viewing behaviors and patterns, according to Gian M. Fulgoni, cofounder and former CEO of comScore, Inc. “Metrics should be able to track viewing at the granular level of show by platform by geography,” he wrote. New measures should also integrate live and time-delayed viewing, while considering TV viewers’ shortened attention span. “Few viewers are giving the television set their undivided attention,” he observed, citing a 2017 eMarketer report that 178 million U.S. adults regularly used a second-screen device while watching TV. “Marketers need ways to measure and monitor the degree to which this distraction—and dilution of attention—is ‘devaluing’ a television advertisement campaign’s audience.” Ultimately, Fulgoni asserted, new measurement systems should “address the way advertising is responding to what the consumer wants: more platforms, less clutter, and fewer interruptions.”
Artificial Intelligence in Advertising: How Marketers Can Leverage AI along the Consumer Journey
The Cambridge Analytica scandal—in which the analytics firm used millions of Facebook accounts for political purposes—exposed the dark side of artificial intelligence. But on its bright side, artificial intelligence is changing for the better advertisers’ understanding of consumers, which benefits both sides of the marketing equation, according to Jan Kietzmann (University of Victoria), Jeannette Paschen (KTH Royal Institute of Technology, Stockholm, Sweden), and Emily Treen (Beedie School of Business at Simon Fraser University, Burnaby, Canada). “Many marketers are turning to artificial intelligence (AI) to transform (the) …seemingly endless supply of consumer-curated data … into valuable consumer insight,” the trio wrote. “There are, of course, risks involved,” they noted, but the same risks “create opportunities for marketers and advertisers to be more effective at understanding and reaching consumers at different stages of the consumer journey.”
To study how marketers grasp those opportunities, Kietzmann, Paschen, and Treen broke down AI into its various components, or building blocks, and then illustrated “the consumer processing activities, the advertising objectives and traditional advertising tasks for marketers at each journey stage.” Then, they highlighted how the building blocks of AI transform advertising tasks.
The combination of AI’s building blocks “allows advertisers to deepen their understanding of consumers and the consumer journey.” Among those building blocks, natural language processing (NLP) allows AI systems to analyze the nuances of human language. The authors pointed to Swedbank in Sweden, which “uses a virtual assistant with NLP to answer customer inquiries on its website’s homepage, allowing customer-service employees to focus more on revenue-generating sales without sacrificing service.” Other building blocks, such as image recognition and speech recognition help advertisers analyze consumer behavior and the meaning of spoken words.
Marketers must understand how “communications traditionally ‘work’ along the consumer’s decision journey,” starting with need recognition. “With AI, it is possible to understand emerging wants and needs in real time—as consumers express them online—and build richer profiles more quickly”—and advertisers can “manifest consumers’ needs or wants.” Pinterest, for example, “employs image recognition to learn about individual users’ particular style preferences through the images they have pinned on the site. The website then suggests other relevant images that reflect the user’s specific preferences, thus facilitating need or want recognition.”
Finally, emerging technologies in AI—such as Google’s virtual assistant Duplex—“make it entirely conceivable that AI soon will be woven so imperceptibly into the fabric of traditional advertising that it becomes indistinguishable from it—with all of its risks and promises,” the authors conclude.
WHAT WE KNOW ABOUT SPORTS SPONSORSHIPS
Advertisement Typicality: A Longitudinal Experiment—Can Sponsors Transfer the Image of a Sporting Event to Their Brand?
There is little doubt that a tie-in between a brand and a special event can be quite lucrative. Past research often has shown that advertising typicality (how well an ad is viewed as representative of a particular product category) creates positive advertising effects. But up until this study, there was no known research that examined the level of typicality with respect to sporting events in particular. That knowledge gap was addressed by Marc Mazodier (Zayed University and Kedge Business School), Armando Maria Corsi (Ehrenberg-Bass Institute for Marketing Science, University of South Australia), and Pascale G. Quester (University of Adelaide). They tested two levels of typicality (high vs. low) of sponsors’ ads to assess whether sponsorship could transfer associations for the sponsor’s brand with the actual sporting event itself.
The authors ran two pretests and one main experiment involving more than 2,200 respondents. The type of experiment—discrete-choice experiment—was used to demonstrate its reliability as a method for assessing the typicality of various combinations of event-related elements.
Among the findings:
- “Event associations were transferred only when the event-related advertising messages, which communicated the association between the event and the brand, either explicitly or implicitly, were highly typical of the event.”
- “The restricted nature of some event elements, such as logos or taglines, improves the perceived typicality of an advertisement, so official sponsors may enjoy an edge.”
- As advice to brand managers, the authors recommended enhancing image transfer [and] increase the typicality of their advertisements “by including representative elements of the event, such as an athlete competing or a symbol of the city hosting the event.”
- For brand managers of nonsponsors, “the results point to a direct opportunity to ambush sponsors, by adopting advertisements that are as typical of event sponsors as possible.”
- That practice will lead to the transfer of the event image to the nonsponsor’s brand instead.
Ambush Marketing Is Dead, Long Live Ambush Marketing: A Redefinition and Typology of an Increasingly Prevalent Phenomenon
Ambush marketing is practiced by many of the world’s largest brands. But in recent years ambushing has become increasingly complex, taking on several forms, prompting researchers in Canada and the U.K. to reexamine the practice. They identified three types of ambush marketing and offered practical suggestions about each type for event owners, official sponsors, and ambushers. The research duo, Nicholas Burton (Brock University) and Simon Chadwick (Salford University Manchester) noted that “rather than the somewhat aggressive and targeted nature of the ambushes perpetrated in ambushing’s early years … there now is a growing sophistication in ambushing as organizations and brands learn what it is, what it can achieve, and how it should be organized.”
Indeed, given the chance of ambushing for nonsponsors, it is no wonder that organizers have found that protection is needed for official event sponsors against the efforts of nonsponsors looking to tie in with events through the practice of ambush marketing. Burton and Chadwick compiled a database of 850 ambushing cases, developed a framework from these cases, and then conducted personal interviews with key informants to produce meaningful strategic insights.
Describing existing definitions of ambushing as “inadequate in reflecting the complexity of ambush-marketing types,” the authors redefined the different forms as follows:
- Incursive ambushing: “the aggressive, predatory, or invasive activities of a brand that has no official or legal right of association with an event, deliberately intending to threaten, undermine, or distract from an event or another brand’s official event sponsorship”;
- Obtrusive ambushing: “the prominent or undesirably visible marketing activities of a brand that has no official or legal right of association with an event, which may either deliberately or accidentally undermine or distract from an official event sponsorship by another brand”;
- Associative ambushing: “the attempt by a brand that has no official or legal right of association with an event to imply or create an allusion that it has a connection with an event.”
“So embedded in the event-marketing landscape has ambushing become,” the authors warned, “that a growth in legislative means as a way of protecting against it has become a fundamental component of many countries’ and events’ sponsorship-protection measures.”
Finally, the authors noted that
- “Rights-holder-based counterambush marketing efforts are limited in scope to protect against different forms of ambushing and against different motives of ambushing brands,” and
- “Improved sponsorship relations and activation are increasingly important in responding to the potential threats posed for sponsors.”
How Does Wall Street React to Global Sports Sponsorship Announcements? An Analysis of the Effect on Sponsoring Companies’ Stock Market Prices
Carmen Abril and Joaquin Sanchez (Universidad Complutense de Madrid), and Teresa Recio (IE Business School) sought to answer the question posed by the title of their article by examining the announcements of 98 official sports sponsorships over 10 years. Their focus: the effects of those announcements on the stock prices of the sponsoring companies trading on 19 international security exchange markets. The sponsoring companies were based in 15 countries, representing half of the official sponsors of four major global tournaments: the Summer Olympic Games, the America’s Cup, the UEFA European Soccer Championship, and the FIF World Soccer Championship.
According to the researchers, the results highlight the advantages of official sponsors. “A combination of the limited number of official sponsors—along with “the exclusivity rights granted for a specific product category and the broad opportunities for sponsorship-linked marketing activities—may enhance the distinctiveness of the sponsorship and its perceived value beyond the higher sponsorship fees.”
Among their findings:
- The global aspect of these sponsorships suggests that investors value international reach as an advantage.
- There was a “decreasing trend in the stock-market appreciation of global sponsorship announcements, suggesting the danger of the current increase in sponsorship fees.”
- “Not all sponsorships were valued equally by the stock market, and at current pricing levels, the sponsorship announcement of the America’s Cup not only does not create value but also destroys value for the company.”
- This, in turn, may be due to the limited reach of audiences, despite sponsorships’ high fees.
OTHER FEATURE ARTICLES
How Advertisers Can Keep Mobile Users Engaged and Reduce Video-Ad Blocking: Best Practices for Video Ad Placement and Delivery Based on Consumer Neuroscience Measures
Advertising researchers do not fully understand the impact that different ad placement and delivery vehicles have on the mobile user’s experience, observed Kimberly Rose Clark (Dartmouth College), with her colleagues at Merchant Mechanics—Kenneth Raj Leslie and Matthew L. Tullman—and Manuel Garcia-Garcia (Ipsos, Paris). Advertisers and branders, in turn, have scratched the surface of driving mobile’s capabilities to speak intimately to the consumer through video.
What is clear is that mobile users have reacted negatively to ads on their phones; roughly 21% of all smartphone users globally have ad-blocking browsers. For mobile advertising to be effective, advertisers need to find a way to “reduce the negative reaction associated with the onset of video ads, or risk being blocked entirely,” the authors wrote.
The ARF commissioned this research team to test the effectiveness of mobile video-based ads using neuroscientific measures. They collected neuroscientific data streams on mobile users to better grasp these people’s experience in real time. The data—visual fixations, heart rate, electroencephalography (EEG), skin conductance, and facial affect—helped assess users’ attention, engagement, and affect toward advertisements and the content in which the ads were embedded. Results showed that three practices led to positive user experience with ads:
- maintaining user volition (personal agency) to engage with ads
- limiting the disruptive nature of ads,
- incentivizing viewing.
Among their findings:
- Allowing the mobile user the choice to click to view video ads enhances viewing time and brand recall.
- Disrupting the experiential flow of content consumption with interstitial in-stream ads has a strong negative impact on emotion and leads to increased ad avoidance and low brand recall.
- Ad placement and delivery affect perception of both the ad content and the editorial content in which the ad is embedded.
Digital Advertising and Company Value: Implications of Reallocating Advertising Expenditures
Companies continue to shift spending away from traditional advertising toward digital-media channels—a trend that would appear to make sense in an increasingly digital media landscape. But is there a point at which those expenditures can have a detrimental effect? asked Judy Ma and Brian Du (California State University East Bay). Yes, in fact, according to their model, companies should refrain from overspending on digital vs. traditional advertising. Companies, they believe, should weigh the benefits of digital advertising—“adaptability of content, more efficient consumer targeting, and higher reach per dollar”— against the opportunity cost, which the authors defined as “forgone synergy between digital and traditional advertising.” They urge companies to identify “quantifiable bottom-line benefits from adding this relatively new form of advertising to the promotional mix.”
Among the benefits, “digital advertising has value-enhancing abilities over traditional forms of advertising: greater adaptability of content, more efficient consumer targeting, and higher reach per dollar.” On the flip side, however, “dedicating too many resources to digital advertising comes with an opportunity cost—companies forego the value-added, or synergy, benefits of diversifying advertising through multiple outlets.” That context was suggested in a 2003 study on integrated marketing communications (IMC), which Professors Ma and Du referred to as recognizing “how value is added through a comprehensive plan that evaluates the strategic roles of a range of different communication disciplines.”
To define company value, the authors used Tobin’s Q, a mathematical ratio between the market value of a company’s physical assets and its replacement value (the amount it would cost to replace those assets at the present time). Generally speaking, it is the difference between the company’s assets valuation on the market and how much the company would need to pay itself to replace them.
The authors used a “hand-matched proprietary dataset of 1,538 companies from 2001 to 2012 to document that digital share—the ratio of digital advertising to traditional advertising—has an inverted U-shaped relationship with company value.” What that suggests is:
- “Shifting resources from traditional to digital media provides the greatest marginal benefit to company value when digital share is low.
- The marginal benefits to company value, however, decrease as digital share increases.
- When a certain threshold is reached, increasing the proportion of digital advertisements will have a negative impact on company value.”
Ma and Du advised managers:
- to consider digital share— the proportion of ad expenditures in digital to traditional media—when making resource-allocation decisions.
- Digital ads provide the most benefit when the current level of digital spend is low.
- The beneficial impact of increasing digital share becomes detrimental when the current ratio of digital to traditional advertising exceeds 15:1.
Online versus Offline Promotional Communication: Evaluating the Effect of Medium on Customer Response
As a retailer, what is the best way —via either online or print flyers— to reach your customer and induce his or her intention to make a purchase? According to field studies by this research team from Italy and Spain, both online and print communications have equal effects, and in some cases a retailer might benefit from ceasing print communications altogether. Although the results are not definitive, the authors believe marketers can use the insights to set strategy depending on whether they are focused on reducing marketing costs, sustaining the reach of their communications, or pursuing a balance between cost reduction and reach.
Overall, the study provides useful insight to “better assess media effectiveness, particularly for marketers,” Marco Ieva and Cristina Ziliani (University of Parma), Juan Carlos Gázquez-Abad (University of Almería), and Ida D’Attoma (University of Bologna) wrote.
The setting for their field experiment was a European supermarket chain with 37 stores that targets its customers with a biweekly print flyer and an online flyer available on its website. The experiment compared the effectiveness of each medium to evaluate the memory and actual shopping behavior of more than 9,000 retail customers. Results suggest that “retail and brand investment in print and online advertising can be based on cost and reach considerations only,” the authors wrote. “Print and online advertisements can be complementary as long as they are employed to target different audiences.”
In fact, they added, retailers whose prime goal is to reduce costs could cease print communication entirely, and instead rely on online formats exclusively. “By shifting to online communications, however, retailers may reduce the reach previously granted by print,” the researchers warned, although a fully online promotional strategy could grant greater flexibility. “For instance, retailers could leverage customer data on purchase behavior to target consumer segments with personalized offers; the categories, brands, or products featured in the flyer could be customer specific.”
For retailers that prefer to focus on sustaining the reach of their communications, a mix of print and online is best. “This strategy relies on insights derived from customer online browsing behavior. Retailers could send print flyers only to those customers who never opened an online flyer, by using addressed mail instead of door-to-door distribution.
“The remaining customers could be targeted with online flyers that are customized on the basis of purchase-behavior history at the customer level….This approach takes advantage of the flexibility of online media without losing the reach of print.”
Finally, the authors encouraged retailers seeking to balance cost reduction and reach to “reduce costs by making print promotional communication available in store and through online media only.” They could place the flyers at the store entrance only, and stop delivering to the customers’ homes, but reaching customers digitally.”
Ultimately, the study supports increased investment in online promotional communication, which, in turn has implications for retail negotiation and manufacturer relationships. “Digital flyers, for example, have virtually no limits to the number of pages and versions, thus creating opportunities for featuring more brands, products, and categories. This could result in a greater volume of promotional contributions (fees) that retailers receive from suppliers,” the authors wrote.
The research team acknowledged a number of limitations that they hope will prompt future research. Limitations included survey issues (including attrition and possible self-selection bias), and the fact that the type of device used to browse online flyers was not standardized “to maximize ecological validity.”
Future study should explore the effects of type of device utilized and measure the heterogeneity of customer response, the authors suggested. Researchers also should explore contexts in similar low-involvement purchase situation that include exploring how media effectiveness changes, depending on
- the type of brand (private label vs. leading or following brands)
- type of promotional communication (price vs. nonprice)
- type of channel (e-commerce, brick-and-mortar, and m-commerce).
The Role of Guilt in Influencing Sustainable Pro-Environmental Behaviors among Shoppers: Differences in Response by Gender to Messaging about England’s Plastic-Bag Levy
There’s very little research on the role of guilt as an influence on sustaining pro-environmental behaviors among shoppers. In this study, Sidharth Muralidharan (Southeast Methodist University) and Kim Sheehan (School of Journalism and Communication, University of Oregon) examined shoppers’ response to a recent law that England has enforced charging five pence for a single plastic bag. The law was meant to motivate shoppers to bring reusable bags. The researchers asked:
- Do male and female shoppers perceive guilt differently?
- Can guilt in an advertising context motivate shoppers to bring reusable grocery bags?
Findings from a survey in Study 1 of this research showed that “high guilt was more impactful on women and helped generate favorable attitudes and behavior.” The experiment for Study 2 explored the theory of psychological ownership and found a “moderate level of guilt using advertisements related to egoistic and biospheric concerns.” In fact, egoistic concerns like saving money were more effective than biospheric concerns, such as the health of the planet. “This effect was stronger for women and men,” the authors noted.
Among the findings:
- Whereas the shopping bag law helped motivate shoppers to bring reusable bags to the store, about half the sample continued to buy plastic bags after the law was enforced.
- Significant differences between genders existed only in the high-guilt condition, in which women had more favorable attitudes than men.
- Among women, attitudes were significantly more favorable in the high-guilt condition than in the low-guilt condition.
- Women are more eco-conscious than men, however, their proenvironment behavior primarily stems from egoistic concerns, like saving money.
The researchers suggested that policy makers take note of the “favorable attitudes toward the carry-bag law and proenvironmental behavior. The interplay of guilt and egoistic versus biosphere advertisement appeals could help the carry-bag law garner more support, especially among women.”
How to Implement Informational and Emotional Appeals in Print Advertisements: A Framework for Choosing Ad Appeals Based on Advertisers’ Objectives and Targeted Demographics
How should brands choose print-advertising appeals given their objectives and target group demographics? What is the most effective strategy to nudge the consumer along the several steps to purchase? A German research team consisting mostly of academics, along with a furniture-maker executive, compared the effects of informational and emotional appeals of magazine ads. They used data from German magazine publishers to differentiate the effects of magazine ads for different five marketing objectives, and they applied their work to a “hierarchy-of-effects” model, while accounting for the moderating effects of age and gender.
By relying on data from a large-scale market-research initiative of the major German print media companies—the Ad Impact Monitor—the study benefited from a sample of 77,628 interviewees and 1,141 real advertisements. The researchers—Thorsten Teichert (Universitat Hamburg), Dirk Hardeck (Hardeck Mobel GmbH, furniture maker in Bochum, Germany), Yong Liu (Aalto University School of Business, Helsinki), and Rohit Trivedi (Universitat Hamburg)—believe their findings “not only are relevant to research but also are of immediate benefit for European advertising professionals.”
The seminal hierarchy-of-effects model (Lavidge and Steiner, 1961) essentially plotted the persuasion process of advertising. According to the model, advertisement messages nudge consumers along several steps: awareness, knowledge, liking, preference, conviction, and purchase. Since then research has developed a wealth of variants on the basis of that model, including DAGMAR, which provided the framework for this study examining informational and emotional effects within the purchase funnel.
Five variables served as proxies of marketing objectives along that model:
- closer advertisement-examination intention;
- information-search intention;
- positive attitude change;
- integration into the evoked set
- purchase intention.
First, the researchers tested the effects of informational and emotional ad appeals and their interaction with age on the different stages of the persuasion process. Afterward, they studied in more detail differences in the effects of ad appeals due to age and gender effects.
Among their practical findings:
- “Emotional appeals (strategy) should be used more frequently than informational appeal, as it is more effective in four of the five persuasion objectives, with the exception of ‘integration into the evoked set’.
- Emotional appeals also is very effective when an ad’s objectives are to create awareness and brand liking among a target audience, irrespective of gender.
- Against generally accepted belief, emotional appeal exerts a stronger impact on male than on female target groups across the five decision phases.
- When an advertiser is addressing a relatively younger audience, emotional appeal has a stronger effect than informational appeal, especially in the early stages of the persuasion process.
- As a marketer starts dealing with more mature target audiences, informational appeal should be preferred over emotional appeal, especially if the marketer’s objectives are to induce information search intention, move the brand into the evoked set, or influence consumer purchase intention.”
Coming in December 2018:
What We Know about Digital Attribution
As a preview to December’s special theme section on digital attribution, John B. Ford reviews seminal work that JAR has published on this topic.