An Empirical Comparison of Ambushing and Sponsorship Effects: the Case of 2006 Fifa World Cup Germany™

The authors greatly acknowledge the financial support of the German Ministry for Education and Research (BMBF–FKZ 01 HQ 0523) for this research. INTRODUCTION Sponsorship as a marketing tool has grown remarkably during the last two decades, especially with respect to endorsement of worldwide sports events. Overall, global expenditures are forecast to reach $37.7 billion in 2007, up 11.9 percent from $33.7 billion in 2006 (anonymous 2007). Events like the Formula One, the Olympic Games and the FIFA World CupTM have become fully globalized in terms of media coverage. Therefore, especially many large international companies use the FIFA World CupTM as a platform for building, strengthening and maintaining their brand equity. For a sponsorship license, enabling the sponsors to market the partnership with the 2006 FIFA World CupTM worldwide, companies have spent about $53 million US each (anonymous 2006). Hence, companies that engage in sponsorship have to be sure about the effectiveness of their investment (Johar, Pham, and Wakefield 2006), which can be endangered if too many official sponsors share a visitor’s attention. To maintain exclusivity for the official sponsors, FIFA has limited their number to fifteen “Official Partners” and six “National Partners,” who paid $17 million US each for local advertising rights. Still, sponsors do not seem to be satisfied with the granted exclusivity. While too many sponsors will most likely result in reduced sponsorship effectiveness for a single sponsor, a second–and probably more severe–threat is the activity of ambush marketers. Ambush marketing is defined as “the practice whereby another company, often a competitor, seeks association with the sponsored activity without payment to the activity owner” (Meenaghan 1994, 77). Despite enhanced legal precautions to protect the interests of official sponsors (Townley, Harrington, and Couchman 1998), many examples of ambush marketing in the context of the FIFA World CupTM can be found (e.g., Nike, O2, and Puma). Existing research on ambush marketing focuses on describing the phenomenon and examining strategic issues related to the practice of ambush marketing (e.g., Collett and Johnson 2006; Crompton 2004; Crow and Hoek 2003; Ettorre 1993; Farrelly, Quester, and Greyser 2005; Meenaghan 1994; Meenaghan 1998a; Meenaghan 1998b; Payne 1998), ethical and legal issues (e.g., Crompton 2004; McKelvey 2003; McKelvey 2006; O’Sullivan and Murphy 1998; Townley, Harrington, and Couchman 1998; Uphoff, Massey, and Brown 2006) and consumer perceptions of ambush marketing (Grohs, Wagner, and Vsetecka 2004; Lyberger and McCarty 2001; McDaniel and Kinney 1998; Mizerski, Mizerski, and Sadler 2001; Sandler and Shani 1989; Shani and Sandler 1998). However, research revealed only one study that deals with the effects of ambush marketing on brand evaluation (McDaniel and Kinney 1998). Moreover, existing studies evaluate the effects of ambush marketing at only one point in time. The predominance of the research on brand effects of sponsorship is either static (e.g., Becker-Olsen and Simmons 2002; Javalgi et al. 1994; Lardinoit and Quester 2001; Menon and Kahn 2003; Pope and Voges 1999, 2000; Ruth and Simonin 2003; Speed and Thompson 2000; Stipp and Schiavone 1996; Turley and Shannon 2000) or is based on data using different respondents over time, making it impossible to analyze effects on the individual level (e.g., Easton and Mackie 1998; Nebenzahl and Jaffe 1991; Quester and Farrelly 1998; Stipp 1998). As a consequence, further studies are needed in order to obtain insights about the effects of ambush marketing strategies on brand evaluation over time. In the present paper, we (1) use learning theory to develop a dynamical perspective of sponsorship and ambush marketing effects on brand perception and (2) investigate the proposed effects based on a panel survey that was conducted before and after the 2006 FIFA World CupTM. In accordance with these research objectives, the paper is organized as follows. First, we briefly describe our rationale for choosing the two brands that are used in this research. Second, we briefly discuss the theoretical background of the study and develop our hypotheses based on existing literature. After describing the methodology, we present the results of the empirical analysis, which is based on panel data gathered from 254 respondents. The paper concludes with a discussion of the key findings and their managerial implications to both official sponsors and ambush marketers.