Benchmarking Sports Sponsorship Performance: Efficiency Assessment With Data Envelopment Analysis

Abstract

Over the last decades, sports sponsorship has become a popular and expensive marketing instrument. However, in business practice, projects are often not evaluated properly and academic research considering both costs and benefits of sponsorship is limited. In response to the concern that investments in sports sponsorship should be made more accountable, we propose data envelopment analysis (DEA) as a method for benchmarking sponsorship efficiency, and illustrate its usefulness by applying it on a sample of 72 major Dutch sports sponsorship projects. We find an average efficiency level of almost 0.3, which implies that the average project would have attained the same results with 30% of its fee if it had been performing as well as its benchmark. The results reveal that 12.5% of the investigated sponsorships are fully efficient. Moreover, we find a high degree of variety in efficiency scores; 37.5% of the projects with an efficiency below 0.1. In addition, we show how DEA scores may be used by sponsor managers to identify peers, which are those projects that attain roughly the same sponsorship outcomes, but at lowest budgets. After estimating the efficiency scores, a second step in the analyses involves investigating which sponsorship characteristics affect sponsorship efficiency. For this purpose, we use the DEA scores as a dependent variable in a Tobit regression model. The findings suggest that sponsorship clutter negatively affects sponsorship efficiency, whereas sponsorship duration has a positive effect.