A market research technique called conjoint analysis can help managers predict what kind of affinity marketing program is likely to offer the best return on investment for their brand.
How should companies determine the best way to allocate marketing dollars between conventional promotional programs and affinity marketing programs? The former simply stress the benefits of buying a specific brand, while the latter prominently and publicly identify a company’s association with a particular sport, entertainment event, nonprofit organization or social cause. Experiments we have conducted suggest that the research method known as conjoint analysis could be a valuable market research tool to help companies predict which of several alternative affinity marketing affiliations would provide the best return on investment. Furthermore, based on both theory and our initial findings from a set of studies using conjoint analysis, many companies will obtain better returns through creating an affinity with a social cause than through affiliating with other, more clearly commercial ventures.
The Potential Returns From Affinity Marketing
According to an article in the IEG Sponsorship Report, spending on sponsorships in North America during 2005 was expected to reach $12.1 billion, with 69% going to sports, 10% to entertainment tours and attractions, 5% to the arts, 4% to festivals, fairs and annual events, 3% to associations and membership organizations and 9%, or about $1.15 billion, to social causes.1 Elsewhere, another article claimed that $9 billion was spent by corporations in 2001 on all types of social initiatives, including strategic philanthropy.2
Clearly, companies are making substantial investments to try to demonstrate an affinity with consumers interested in sports teams, entertainment events and social causes. While a company at one time might have sponsored or supported an activity simply because an executive wanted to help a favorite team or cause, companies today are increasingly treating investments in affinity marketing as important strategic moves. Affinity marketing programs are designed to achieve objectives such as improving overall corporate reputation, differentiating a brand, attracting the interest of targeted consumers, stimulating brand preference and loyalty, attracting loyal employees and, ultimately, increasing profits and stock prices.
Whether companies are achieving these objectives is only beginning to be understood. There is evidence that sports and entertainment sponsorships can be successful, but the available empirical research on this topic is limited.3 Considerably more research has been done on the effects of societal marketing programs, which emphasize a brand’s affinity with a social cause.