Investigating the Cost-Benefit of Sponsorship: An Analysis of Price, Exposure, and Marginal Returns in Motorsports

Abstract

The absence of a uniform metric of return for non-traditional marketing techniques, such as sponsorship, amplifies the challenge of analyzing ROI for such tactics (Clark, Cornwell, & Pruitt, 2002). The purpose of this study was to advance the scarcity of research that evaluates ROI in sponsorship. Utilizing the context of Formula One (F1) motor racing, we modeled both the returns from such efforts (in the form of exposure for the sponsoring brand) and the costs paid for affiliation. The study concluded with a comparison of the returns and costs as a measure of ROI for corporate sponsors. By explicating several factors that influence ROI for corporate sport sponsors, we contribute to brand marketers’ capacity to evaluate such non-traditional marketing opportunities and assist in future decision-making. Empirical research has demonstrated the value of brand exposure during televised sports programming (Levin, Joiner, & Cameron, 2001; Olson & Thjømøe, 2009) and indicated that the amount of exposure received as a result of a sponsorship is critical to quantifying the benefits to sponsorship (Pope & Voges, 1994; Pruitt, Cornwell, & Clark, 2004). To fully investigate sponsors’ televised brand exposure, we utilized multiple regression analysis to produce two highly predictive models (adjusted R2 =.86 and.79) that indicated that sponsored team points (p