Corporations concerned about the efficiency of traditional methods of marketing communications have adopted a range of alternative media to target audiences. One such medium is commercial sponsorship, which has grown significantly in recent years. By sponsoring an event or providing a budget for an event’s broadcast, a sponsor can generate audience awareness while simultaneously creating associations of the event’s values in people’s minds.
In this article, I focus on an increasingly prevalent corporate sponsorship practice in which a company, often an event sponsor’s competitor, attempts to deflect the audience’s attention to itself and away from the sponsor. This practice, known as “ambush” or “parasitic” marketing, simultaneously reduces the effectiveness of the sponsor’s message while undermining the quality and value of the sponsorship opportunity that the event owner is selling. As such, it may seriously inhibit the further growth of corporate sponsorship. Here I seek to warn sponsors of the potential threat to their sponsorship investments, outline the nature of ambushing and its strategies, and discuss the ethical perspectives related to ambush marketing and possible strategies and responses that a corporate sponsor might consider.
The Development of Commercial Sponsorship
Commercial sponsorship for marketing purposes developed only during the past twenty-five years. Sponsorship’s ability to transcend language and cultural barriers makes it an attractive global marketing option. In 1970, sponsorship expenditure in the United Kingdom was only £4 million, but, by 1994, an estimated £450 million was spent on sponsorship.1 In the United States, market sponsorship expenditure grew from $850 million in 1985 to a projected 1996 expenditure of $5.4 billion.2
The worldwide sponsorship market grew from an estimated $2 billion in 1984 to $13.02 billion in 1994.3 The key markets of Europe and the United States dominate the industry worldwide, valued in 1994 at $4.28 billion and $4.25 billion or 32.9 percent and 32.6 percent of worldwide expenditure respectively.4 Continued strong growth in this medium is forecast. These estimates of sponsorship expenditure include only the direct costs of securing the sponsorship rights. Expenditures to leverage or promote these rights must be at least equal to the direct costs, and many major sponsors invest several times the direct cost to exploit their initial investment.
1. D. Buckley, “Who Pays the Piper?,” Practice Review, Spring 1980, pp. 10–14; and
Special Report on Sponsorship (London: Mintel, 1994).
2. International Event Group Inc., “North American Sponsorship Spending to Top $5 Billion in 1996” (Chicago, Illinois: IEG, 15 January 1996, press release).
3. Sponsorship Research International, Annual Estimates of Sponsorship Expenditure (London: SRI, 1994).
5. T. Meenaghan, “The Role of Sponsorship in the Marketing Communications Mix,” International Journal of Advertising, volume 10, 1991, pp. 35–48.
6. A. Hitchen, “Sponsorship Research — Improving the Sporting Chances of Success” (Brussels, Belgium: Sponsorship Europe ’95 Conference, 6–7 April 1995, paper).
7. F. Dinmore, “Cricket Sponsorship,” The Business Graduate, Autumn 1980, pp. 68–72;
D. Beauvois, “How Does Sponsorship Fit in the Business-to-Business Marketing Communications Mix with the Compaq Grand Slam Cup as Case” (Barcelona, Spain: Sponsorship Europe ’91 Conference, 23–25 October 1991, paper);
R. Jones, “Mastercard Welcoming the World to the U.S.: A Case Study of the World Cup Sponsorship” (Brussels, Belgium: Sponsorship Europe ’95, 6–7 April 1995, paper).
8. M. Jones and T. Dearsley, “Understanding Sponsorship” (Turin, Italy: ESOMAR Seminar on “How to Increase the Efficiency of Marketing Communications in a Changing Europe,” 11–3 October 1989, paper).
9. F. Kohl and T. Otker, “Sponsorship — Some Practical Experiences in Philips Consumer Electronics” (Milan, Italy: ESOMAR Seminar on Below-the-Line and Sponsoring: The Use of Promotion and Sponsorship in the Marketing Mix, 6–8 November 1985, proceedings), pp. 104–141.
10. M. Hiestand, “Ambush Marketing Becomes an Olympic Event,” Adweek, 17 November 1987, pp. 2–4.
11. M. Grimm, “Official Sponsors Who Pay Millions See Ambush Marketing as Ring Dings,” Adweek, 29 June 1992, pp. 12–13.
12. J. Lipman, “Olympics Ambush Strategies Spur Debate,” Wall Street Journal, 7 February 1992, pp. B8.
13. “Super-Ambush: Bud versus Miller, Pepsi versus Coke at Twin Cities Game,” IEG Sponsorship Report (Chicago, Illinois: International Event Group, December 1992), pp. 1, 6.
14. J.P. Lamie, “Creating Value: How Gillette Leverages Sponsorship to Impact Its Sales Force, the Trade, and Consumers” (Chicago, Illinois: International Event Group Conference, 26–29 March 1995, paper).
15. International Olympic Committee, “100 Years of the Olympic Movement,” Marketing Matters, Summer 1994, pp. 1–6.
16. International Olympic Committee, Olympic Marketing Fact File (Lausanne, Switzerland: IOC Marketing Department, 1995).
17. International Olympic Committee, “Olympic Rings: The World’s Most Recognized Symbol,” Marketing Matters, 1995, pp. 9–11.
18. International Olympic Committee, “Sponsors Provide Technical Support and Other Benefits,” Marketing Matters, Summer 1993, pp. 3–5.
19. International Olympic Committee, “Top Sponsors Activate Their Olympic Investment,”Marketing Matters, Spring 1995, pp. 1–9.
21. A possible conceptual framework for considering the interorganizational relationship between event owner and sponsor is provided by transaction cost economies. See:
O.E. Williamson, “Economics and Organization: A Primer,” California Management Review, volume 38, Winter 1996, pp. 131–146;
P.S. Ring and A.H. Van de Ven, “Structuring Co-Operative Relationships between Organizations,” Strategic Management Journal, volume 13, 1992, pp. 483–498;
M. Sako, Prices, Quality, and Trust: Inter-Firm Relations in Britain and Japan (Cambridge: Cambridge University Press, 1992);
O.E. Williamson, The Economic Institutions of Capitalism: Firms, Markets, and Relational Contracting (New York: Free Press, 1985); and
S.C Frey, Jr. and M.M Schlosser, “ABB and Ford: Creating Value through Cooperation,” Sloan Management Review, volume 35, Fall 1993, pp. 65–72.
The concepts of power, mutual dependency, expectations, risk, trust, and collaboration as well as the basic mechanisms of contractual agreements and market forces impact on the governance of this relationship. Two particular behavioral characteristics postulated by Williamson are highly appropriate: bounded rationality, which is the inability of economic actors to write contracts that cover all possible contingencies, and opportunism, which Williamson saw as the rational pursuit by economic actors of their own advantage, with every means at their disposal, including guile. See:
O.E. Williamson, Markets and Hierarchies: Analysis and Antitrust Implications (New York: Free Press, 1975).
There may be a need to go beyond transaction cost economics with its primary focus on dyadic relationships in that a variety of economic actors are involved, either directly or indirectly, in decisions regarding the sponsorship of major events. In the case of the Olympic Games, these will include the Olympic movement at all its various levels, broadcasters, sponsors, licensees, and not least the athletes and the sporting audiences. In such circumstances, management theory in the form of the network perspective and the interorganizational relationship literature is highly relevant to discussions on issues of contracts, cooperation, conflict, and control between economic actors. See:
H. Hakansson, ed., Internal Marketing and Purchasing of Industrial Goods — An Interaction Approach (New York: Wiley, 1982);
P.W. Turnbull and J.P. Valla, eds., Strategies for International Industrial Marketing (London: Croom-Helm, 1986);
H. Hakansson and G. Snehota, Developing Relationships in Business Networks (London: Routledge, 1995); and
J.B. Heide and G. John, “Alliances in Industrial Purchasing: The Determinants of Joint Action in Buyer-Supplier Relationships,” Journal of Marketing Research, volume 27, February 1990, pp. 24–36.
22. D.M Sandler and D. Shani, “Olympic Sponsorship vs. ‘Ambush Marketing’: Who Gets the Gold?,” Journal of Advertising Research, volume 29, August–September 1989, pp. 9–14;
D. Shani and D.M. Sandler, “Sponsorship — An Empirical Investigation of Consumer Attitudes” (Monte Carlo, Monaco: ESOMAR Sponsorship Research Seminar in conjunction with Sponsorship Europe ’92, 2–4 December 1992, paper);
S. McKelvey, “Sans Legal Restraint, No Stopping Brash, Creative Ambush Marketers,” Brandweek, volume 35, 18 April 1994, p. 20; and
J.M. Curl and J. Durham, “New Issues in Ambush Marketing and Anti-Ambush Strategies” (Chicago, Illinois: International Event Group Conference, 26–29 March 1995, paper).
23. McKelvey (1994), p. 20.
24. R. Fannin, “Gold Rings or Smoke Rings?,” Marketing and Media Decisions, volume 23, September 1988, pp. 64–70.
25. Ibid., p. 66; and
A. Bayless, “Ambush Marketing Is Becoming Popular Event at Olympic Games,” Wall Street Journal, 8 February 1988, pp. B1.
26. “The IOC Police,” Advertising Age, volume 65, 28 February 1994, p. 24.
27. M. Hunt, “Sponsorship on a Small Budget” (London: Strategic Sponsorship Conference on Successful Sponsorship Strategy, Solutions, and Creativity, 13–14 February 1991, paper).
28. C.A Galford, “Sponsorship and Ambushers: Is There Any Protection?” (Barcelona, Spain: Sponsorship Europe ’91 Conference, 23–25 October 1991, paper).
29. K. Parker, “Sponsorship — The Research Contribution,” in Managing Commercial Sponsorship, special edition, T. Meenaghan, ed., European Journal of Marketing, volume 25, 1991, p. 28.
30. Performance Research Inc., Olympic Sponsorship Study (Newport, Rhode Island: Performance Research Inc., 1992);
M. Turner, “Circle the Rings, Ambush Ads Hit,” The Atlanta Journal/ The Atlanta Constitution, 3 March 1992, p. A6; and
R.L. Flanagan, “A Study of Corporate Sponsors and the Feasibility of an Ambush-Free Olympic Games in Atlanta” (Columbia, South Carolina: University of South Carolina, unpublished dissertation, 1993).
31. “Wendy’s Ambush of McDonald’s Snatched Away ‘Official’ Glow,” Sports Marketing Letter, volume 6, March 1994, p. 1;
L. Kinney and S.R. McDaniel, “Strategic Implications of Attitude towards the Ad in Leveraging Event Sponsorship” (Norfolk, Virginia: American Academy of Advertising Conference, 23–27 March 1995, paper).
32. J. Crimmins, “Sponsorship — Management Ego Trip or Marketing Savvy” (Brussels, Belgium: Sponsorship Europe ’95 Conference, 6–7 April 1995, paper).
34. Shani and Sandler (1992).
35. T. Meenaghan, “Ambush Marketing: Immoral or Imaginative Practice,” Journal of Advertising Research, volume 34, September–October 1994, pp. 77–88.
36. M.R. Payne, “A Talk by IOC Market Chief Michael R. Payne,” The Sport Marketing Letter, January 1993, p. 4.
37. B. Ettorre, “Ambush Marketing: Heading Them Off at the Pass,” Management Review, volume 82, March 1993, p. 55.
38. Bayless (1988), p. B1; and
G. Brewer, “Be Like Nike?,” Sales and Marketing Management, volume 145, 11 September 1993, p. 68.
39. R. Waddell, “Cowboys Rewriting NFL Revenue Rules?,” Amusement Business, 1 September 1995, pp. 22, 36;
J. Jensen, “Breaking Ranks in the NFL,” Advertising Age, 13 November 1995, pp. 1, 4;
J. Jensen, “Jones Fails to Snare More NFL Renegades,” Advertising Age, volume 66, 25 September 1995, pp. 3, 8.
40. T.L Beauchamp and N.E Bowie, eds., Ethical Theory and Business (Englewood Cliffs, New Jersey: Prentice Hall, 1993), p. 30.
41. G.R. Laczniak and P.E. Murphy, Ethical Marketing Decisions —The Higher Road (Boston: Allyn & Bacon, 1993), p. 30.
42. M.R. Payne, “Ambush Marketing: Immoral or Imaginative Practice (Barcelona, Spain: Sponsorship Europe ’91 Conference, 23–25 October 1991, paper); see also:
Payne (1993), pp. 4, 5.s2.
43. D. Greising, “Let the Hype Begin,” Business Week, 2 February 1995, pp. 117–118;
A. Shell, “Ambush Marketers Will Win No Medals,” Public Relations Journal, volume 50, January 1994, p. 11;
Greising (1995); and
M. Grimm, “Panasonic Pays up to Elude Sony Ambush,” Adweek, volume 34, 9 August 1993, p. 10.
44. Curl and Durham (1995).
45. L. Bayor, “Atlanta’s Card Games,” Advertising Age, volume 64, 18 January 18 1993, pp. 1, 53.
46. J. Jensen, “Sponsors Tiff Socks World Cup,” Advertising Age, volume 65, 14 March 1994, p. 3.
47. Sandler and Shani (1989);
Shani and Sandler (1992);
Parker (1991); and
Performance Research Incorporated (1992).
48. Greising (1995), pp. 117–118.
49. S. Townley, Ambush/Parasitic Marketing and Sport (London: Professional Direction Ltd., 1992).
50. Ettorre (1993), pp. 53–57;
McKelvey (1994), p. 20;
R. Grover, “The World Cup of ‘Ambush Marketing,’” Business Week, 2 May 1994, p. 37.
51. Grimm (1992), p. 16.
52. H. Slingsby and S. Macdonald, “Olympic Pillage?,” Marketing Week, 24 July 1992, pp. 22–25; and
N. Fielding and L. Black, “Ambush at Barcelona,” The Independent on Sunday, 19 July 1992, p. 6.