Portal de Periódicos da CAPES

Influences on sponsorship deals in NASCAR: indirect evidence from time on camera

2014; Taylor & Francis; Volume: 46; Issue: 19 Linguagem: Inglês

10.1080/00036846.2014.899672

1466-4283

Kurt W. Rotthoff, Craig A. Depken, Peter A. Groothuis,

Consumer Behavior in Brand Consumption and Identification

AbstractWhen corporate sponsors want to maximize their exposure, they often focus sponsorship dollars on events, teams and athletes that will prove to be reliable, respectable and, most important, repetitive advertising outlets. Analysing the factors that increase a broadcaster's propensity to display a sponsor during television broadcasts is often hard to measure. Using a unique data set describing NASCAR broadcasts, we indirectly analyse what influences the value of a sponsorship contract through a proxy for driver sponsorship value: the value of time on camera (VTOC). We find that the VTOC is influenced by driver performance and their celebrity status, as measured by driver experience and inherited brand-name capital. Although the values of individual sponsorship contracts are generally not reported, the evidence herein suggests that driver performance and status likely influence the value of NASCAR sponsorship contracts.Keywords: sportssponsorshipNASCARnaming rightsreturn on investmentadvertisingJEL Classification: D23L14M31M37 Notes1 Given that sponsors are the primary source of funding of a race team, driver performance might be directly linked to the value of the sponsorship deal because the quality of the car depends upon the resources available to the race team. The reverse causality of largest sponsorship contract leading to the best driver due to the best car is observationally equivalent to best driver and the highest contract. Our analysis focuses on performance on the track, either due to the driver or the car, leading to time on camera, or is it due to some other reason.2 This comes from Laband and Lentz's (Citation1985, Citation1990) and Lentz and Laband (Citation1990) work finding that occupational following is an efficient mechanism for the transfer of rents across generation, especially when the family name has goodwill attached to it.3 For those not familiar with these last names, Dale Earnhardt Jr. is the son of the late Dale Earnhardt, who died on the last lap of the 2001 Daytona 500, and is the most popular driver in NASCAR. The Petty name has been associated with NASCAR since Lee Petty started racing in 1949; in 2008, Kyle Petty was the last Petty to race in NASCAR's premier circuit. Kyle Busch and Kurt Busch are brothers who race in NASCAR's premier circuit; Kurt was the 2004 champion of the NASCAR Sprint Cup and Kyle is a controversial but high-quality driver. Potential selectivity bias might exist because we do not have data on sons of former drivers who do not make the NASCAR series.4 Joyce Julius & Associates, Inc founded in 1985 measures sponsorship impact in media. The website for this company is http://www.joycejulius.com/index.html5 The value of time on camera (VTOC) is defined by Joyce Julius as follows:All clear and in-focus exposure time a brand receives during the broadcast. In order for the brand's logo to be considered clear and in-focus, the image must not be blurred or obstructed in a way as to prevent the typical viewer from acknowledging the brand. Along with the visual exposure, Joyce Julius also monitors each verbal mention received by the brand throughout the telecast. Mentions are valued at ten seconds each, based on an average of 3 brand mentions per 30-second commercial. Once all of the visual and/or verbal exposure has been tabulated, a value for the brand's exposure is calculated by comparing the on-screen time and mentions to the non-discounted cost of a commercial, which ran during the specific program in question. (Joyce Julius and Associates)6 Dale Jr. has the highest VTOC in our sample and is often voted as the 'fan favorite' in those seasons. For that reason, the use of a fan favourite proxy would be the same as having a Dale Jr. dummy variable. We have chosen to use a Dale Jr. dummy in one specification, instead of a fan favourite measure, knowing the outcome is the same.7 While the most famous drivers in NASCAR's Sprint Cup Series generally drive every race, several drivers attempt but do not qualify for each race.8 Hood et al. (Citation2012) argues that consistency, that is, winning is more likely today because of winning yesterday, is not supported in NASCAR Sprint Cup series. This would suggest that broadcasters show previous winners because of fan preference not because they have a higher probability of winning a particular race.9 Dale Earnhardt Jr. has won a total of 19 NASCAR Sprint Cup Series races in his career but only three races from 2005 through 2011 season. Nevertheless, he remains one of the most popular drivers in the circuit.