Leveraging sponsorship: The activation ratio

The accelerated growth of sponsorship has brought increased attention and scrutiny to this relatively new area of marketing and communications strategy. In turn, researchers have focused on defining, understanding and measuring the various aspects of sponsorship. However, detailed research related to the ‘how’ of sponsorship implementation remains limited. A key aspect of implementation is known as activation, which refers to the investment by the sponsor above and beyond the fee required to acquire the official rights to that sponsorship. Activation is normally referred to as a ratio of the additional investment to the cost of the rights fees. Previous studies have offered recommended activation ratios ranging from 1:1 to as high as 8:1 in order to fully reap the rewards of sponsorship. This research seeks to enhance our understanding of sponsorship activation via an in-depth case study, a typical method for exploratory research of this nature. Specifically, we ask (i) what drives activation, (ii) what are the best methods of activation, and (iii) how much should be spent on activation? Findings suggest that management decisions regarding activation focus on the custom development of quality strategies versus increasing the activation ratio. Indeed, a formula based on a variety of factors is recommended since activation tactics and their appropriateness to a specific sponsorship are the cornerstones of sponsorship success. Overall, results present a four-step model including activation drivers, strategic considerations, activation spending, and sponsorship outcomes.

► This research explores an area of identified research and practitioner need: sponsorship activation. ► The study involves data provided by a leading sponsor corporation. ► The work seeks to establish the ‘activation ratio’ – commonly used in practice. ► Background literature on sponsorship and sponsorship activation provide the basis for the study. ► Practical applications are provided in the form of a suggested framework for the corporation of interest.