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«Introduction Numerous researchers have documented the phenomenal growth in sponsorship that has occurred over recent decades and have linked this to ...»

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The Effects of Usage and Brand Perception on Estimates of “Ambush Marketing”

Janet Hoek and Philip Gendall, Massey University

Abstract

Although marketers have described “ambush” marketing as a parasitic activity that

encroaches on legitimate sponsorship, the evidence documenting alleged instances of

“ambushing” is more anecdotal than empirical. We suggest two initiatives are required to

address the ambiguity surrounding ambushing. First, marketers need to consider alleged

instances of ambushing from a legal perspective; this will help differentiate normal competitive behaviour from passing off or mis-use of trademarks. Second, they need to consider the effects other marketing variables, such as usage or brand perception, may have on estimates of alleged sponsor confusion. We examine instances of alleged “ambushing” in the FIFA World Cup and conclude that incorrect sponsorship associations may result as much from market structure and perceptions as from “ambushing”.

Introduction Numerous researchers have documented the phenomenal growth in sponsorship that has occurred over recent decades and have linked this to its increasingly commercial orientation, and the need for more sophisticated sponsorship management (see Parker, 1991; Scott & Suchard, 1992; Crimmins & Horn, 1996, Hoek, 1999, for example). Whereas sponsorship was once philanthropic, since the 1984 Los Angeles Olympics, it has become overtly commercial as companies bid for sponsorship rights and pay premiums to achieve exclusivity (Altobelli, 1997).

According to some researchers, “ambush” marketing has emerged as an unintended consequence of the emphasis on clearer financial returns. Companies unable to fund or secure sponsorship rights have allegedly resorted to tactics that create confusion over the true sponsor (Bean, 1995; Shani and Sandler, 1998). Described by Meenaghan (1998a) as occurring when “another company, often a competitor of the official sponsor, attempts to deflect the audience’s attention to itself and away from the sponsor” (p.306), ambush marketing clearly encompasses a wide range of activities. Meenaghan continues by outlining the effects of “ambushing”, which he suggests: “simultaneously reduce the effectiveness of the sponsor’s communications while undermining the quality and value of sponsorship opportunity being sold by the event owner” (Meenaghan, 1998a, p. 306).

Yet although much has been written about “ambush” marketing, considerable ambiguity surrounds this term and its status. In particular, Meenaghan’s definition suggests ambush marketing includes what are arguably normal competitive practices. Thus despite the rancour this practice arouses, there is surprisingly little discussion of its legal status, or of how its effects can be documented. In this paper, we examine the range of behaviours used as examples of “ambushing”. We then review measures of confusion said to arise from ambushing and explore the confounding role played by other variables, such as brand usage and perceptions.

Evolution of Ambush Marketing ANZMAC 2002 Conference Proceedings 2191 Researchers have described instances of ambush marketing as pre-meditated, designed to deprive official sponsors of the benefits they would normally obtain for the sponsorship (Meenaghan, 1994; 1996; Sandler and Shani, 1989, 1998). This behaviour arguably confuses consumers, so that they mistakenly attribute sponsorship of an event to the ambusher, rather than to the true sponsor (see also Payne, 1998). Overall, definitions of ambushing suggest it comprises virtually any attempt by a competitor to engage in promotion activities during a sponsorship.

As a result, companies that advertise or run promotions during a competitor’s sponsorship are considered ambushers, particularly if they use media spots during broadcasts of the sponsored event (Sandler and Shani, 1989; Graham, 1997; O’Sullivan and Murphy, 1998). Similarly, researchers have also described initiatives to secure alternative sponsorships, or subcategories of sponsorship such as broadcast rights, as ambushing (Meenaghan, 1994;

Graham, 1997; Payne, 1998). Cases involving conflicts between sponsors of an event and sponsors of the media rights to that event have led some major event owners, such as the IOC, to implement stricter contracts that ensure official sponsors have first right of refusal to media opportunities. However, as Bean (1995) pointed out, the cost of securing sponsorship rights may leave companies with few funds to promote their status. In addition, where official sponsors decline to secure media rights, they and the event owners may be unable to prevent competitors from obtaining them.

The content of advertisements, particularly the use of images or logos associated with the event, has also attracted criticism if these suggest similarities with the official sponsors’ trade dress (Hoek, 1997; Meenaghan, 1998a). Researchers have also commented on the use of official tickets as prizes in sweepstakes or other competitions, and have suggested that these practices also imply a contractual association. For example, Bean (1995) discussed NHL v Pepsi 92 D.L.R.4th 349 (B.C., 1992), where the National Hockey League (NHL) alleged that Pepsi’s “Pro-Hockey Playoff Pool” deliberately created confusion with the NHL Stanley Cup Playoffs, which Coca-Cola sponsored.





Overall, marketers suggest ambush marketing encompasses a wide range of different actions, including the use of simultaneous promotions, purchase of sub-category rights, and misappropriation or forgery of trademarks available only to official sponsors (Meenaghan, 1998a). However, while some activities, such as passing off, clearly breach the law, other actions, such as purchase of lawfully available media opportunities, do not. Marketers’ use of the term “ambush marketing” creates emotive connotations that do nothing to clarify the legal issues that ultimately determine the outcome of any dispute.

In some cases, the dispute outcome will also depend on evidence of consumers’ views and subsequent behaviour. To date, few researchers have investigated consumers’ reactions to instances of alleged ambushing and those who have, have drawn divergent conclusions.

Thus, while Tripoldi & Sutherland (2000) suggested that “ambush marketing” might change consumers’ purchase intentions and subsequent behaviour, Shani and Sandler (1998) argued that ambush marketing had little material effect on consumers’ behaviour (see also Bean, 1995).

Work into the effects of “ambush marketing” has explored consumers’ association of events and sponsors, but has not examined the potentially confounding role of their current usage behaviour, or even the current market share of the brands involved. Nor does it examine responses according to respondents’ interest or involvement in the event (Sandler and Shani, ANZMAC 2002 Conference Proceedings 2192 1989, for example). These are potentially serious deficiencies, since respondents who have not followed an event, no matter how well publicised this is, are likely to provide responses that reflect either their own purchase behaviour, or their knowledge of the market in general.

That is, if they do not know which brands sponsored an event, they may reason, “I buy a good brand and this is the sort of thing it would sponsor” or “X is a big brand, so it must have sponsored this event”. This study therefore examined the potentially confounding effects of brand usage and brand perception on sponsorship associations in the context of the 2002 FIFA World Cup (FWC).

The FWC provided a suitable vehicle for this work as, although adidas were official sponsors, Nike provided apparel to several teams and conducted high profile advertising throughout the FWC tournament. Similarly, PepsiCo has endorsement contracts with several high profile players, including David Beckham and Rivaldo, but, unlike Coke Cola, was not an official sponsor. FIFA successfully obtained an injunction restraining PepsiCo from using an advertisement that suggested a sponsorship association (Marketing Law, 2002). In addition, both Visa and MasterCard linked their advertising to soccer, even though only MasterCard was an official sponsor. Other official sponsors used in the experiment included: Hyundai, Fuji, McDonalds and Samsung.

Method

The fieldwork for this project involved 399 mall intercept interviews conducted by trained interviewers with a randomly selected cross section of the public aged 18 years and over.

The overall response rate to the survey was 51%. Respondents initially viewed a randomly presented set of logos and identified those they thought were official sponsors of the FWC.

In total, respondents classified sixteen brands, from eight product categories, of which seven were official sponsors (two control brands were also included). Respondents also identified which of these brands they currently used and they nominated one from each pair as the superior brand. Respondents were also asked questions about the FWC’s outcomes and they indicated their interest in and the extent to which they followed the tournament.

Results and Discussion

We first examined the effect respondents’ viewing behaviour had on their ability to correctly identify the FWC sponsors. Overall, respondents’ ability to identify the sponsors was weak – at best, half correctly identified Coca Cola as a sponsor, while only 24% identified Hyundai and 16% identified IBM, a brand from a product category that had no official sponsor. For brands such as Coca Cola and adidas, which were both identified by around 50% of the sample, the number of games respondents watched had little effect on their ability to identify the sponsor. However, smaller brands such as Samsung and Hyundai, which fewer respondents recognised as official sponsors, were more affected by respondents’ exposure to the event. This suggests a double jeopardy effect where big brands are more readily recognised as sponsors, irrespective of respondents’ knowledge of or interest in the event. By contrast, recognition of smaller sponsors depends heavily on exposure to the event.

We next examined how respondents’ usage behaviour affected their identification of official sponsors. Table 1 contains the results of these analyses.

Table 1: Sponsor-Event Association and Usage Behaviour

–  –  –

Table 1 suggests that brand users are more likely to associate the brand with an event than are non-users. For official sponsors, this effect was not large (with the exception of adidas);

however, for larger non-sponsors such as Pepsi, Nike and Sony, users were significantly more likely to associate these brands with the FWC than were non-users. This again suggests a double jeopardy effect where users of well-known brands have a greater propensity to associate those brands with an event than do users of less well-known brands. These findings also query the effectiveness of sponsorship as a marketing tool for smaller brands hoping to establish themselves against larger brands. For example, Sony outperformed Samsung, the official sponsor, and Toyota was as likely as Hyundai to be named as a sponsor, even though only Hyundai held official sponsorship rights.

Overall, this table suggests that usage mediates respondents’ association of brands with events, particularly for smaller brands. However, larger brands were more immune to usage effects and were generally less affected by respondents’ usage behaviour. We also examined the relationship between perceived brand superiority and sponsorship association. Table 2 contains the results of these analyses.

Table 2 reveals some brand perception effects, although these are not straightforward. For example, although Coca Cola was immune to perception effects and was associated with the FWC almost irrespective of whether it or Pepsi was viewed as the superior cola drink, adidas produced quite different results. In this case, 40% of those who viewed adidas as the superior brand of sporting equipment associated it with the FWC while 51% of those who nominated Nike as the superior brand associated adidas with the FWC.

Interestingly, a higher proportion of those who viewed smaller brands as superior associated them with the event (see Samsung and Hyundai). This suggests that sponsorship may have a reinforcing role that helps consolidate and maintain the behaviour of existing users.

–  –  –

Marketers wishing to take action against competitors who they believe have infringed their rights as official sponsors should consider their legal position, as this ultimately determines the redress available to them. The term “ambush marketing” does nothing to clarify marketers’ legal rights and risks obfuscating the options they have.

When taking action against competitors, marketers wishing to establish confusion also need to consider the role played by consumers’ brand usage behaviour and their perceptions of different brands within a product category. The results from this study suggest brand usage mediates consumers’ association of brands with an event, thus complicating marketers’ ability to hold a competitor responsible for any confusion over the official sponsor of an event. The results also suggest the presence of Double Jeopardy effects, which militate against the ability of smaller brands to use sponsorship to establish themselves against larger competitors. Respondents’ perception of competing brands also appears to affect their association of sponsors with events, though these results were not straightforward and require replication and extension.

Overall, confusion over the official sponsors of an event may arise from many sources, of which competitors’ simultaneous promotions may be only one. Marketers wishing to communicate their status as official sponsors may need to pay more attention to the provisions of their sponsorship contract, to ensure competitors’ ability to undertake simultaneous promotions is minimised. However, they should also be mindful that the success of their sponsorship is also likely to depend on consumers’ current behaviour and brand perceptions.

–  –  –

Altobelli, T. 1997. Cashing in on the Sydney Olympics. Law Society Journal. 35 (4), 44-46.

Bean, L. (1995) Ambush Marketing: Sports Sponsorship Confusion and the Lanham Act. 75 (Sept.), 1099-1134.



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