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Does It Pay Off to Boost Advertising for Major Sports Events?

Should firms increase their advertising around major sports events? Maarten Gijsenberg analyzed short- and long-term own- and cross-advertising elasticities for 206 brands using four years of weekly data. Here, he summarizes his findings. (From Empirical Generalizations about Marketing Impact, 2nd ed.)

Advertising and Sports Events

Own advertising–sales elasticities are much smaller around major sports events compared to normal periods. Decreases in effectiveness amount to 75% for short- term elasticities and 45% for long- term elasticities. Reductions are strongest right before and during the event, and weakest right after the event. Cross-advertising elasticities are reduced as well.

Brands can escape from these reductions when they (1) invest heavily in advertising, resulting in higher share of voice (2) around events that focus on one sport. For such brands, long-term elasticities even increase by approximately 50% right after the event.

Evidence base

Time-series analysis of four years of weekly data on 206 brands across 64 consumer packaged goods categories in the U.K. (2002–2005); focus on sales effects of normal advertising

Managerial implications

If brands have sufficient budgets, it pays off to invest heavily in advertising, and increase share of voice around single-sport events in order to increase sales. If such funds are not available, brands should try to escape from the clutter. They can (1) shift their budgets to other marketing tools, or (2) concentrate advertising efforts on the weeks right after the event.

Investing in advertising around these events can still make sense when advertising is used as catalyst of other marketing activities or to build brand image.

Contributor

Maarten J. Gijsenberg, University of Groningen

Reference

Gijsenberg, Maarten J. (2014), “Going for Gold: Investigating the (Non)Sense of Increased Advertising around Major Sports Events.” International Journal of Research in Marketing 31 (1), 2–15

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