Abstract
With increases in sponsorship expenditures outpacing traditional advertising, return on investment warrants greater scrutiny. Research overwhelmingly focuses on returns, however, while neglecting the associated investment. This study contributes to the literature on sponsorship costs by analyzing multiple years of prices paid for sponsorships of Formula One racing teams. Contrary to past research, when sponsor industry and sponsorship level were controlled for, prices were not influenced significantly by congruence, clutter, sponsoring company size, or performance of the sponsored organization. Results indicate that the sponsoring company’s brand equity and shared nationality with the sponsored team predicted price premiums, suggesting agency conflicts among advertisers.
- Received January 10, 2019.
- Received (in revised form) November 13, 2019.
- Accepted January 2, 2020.
- Copyright © 2021 ARF. All rights reserved.
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Vol 61 Issue 1
