SMS12.4 paper 5 Does Sponsorship Pay Off pp352-364 KT2
Does sponsorship pay off? An examination of the relationship between investment in sponsorship and business performance
sponsorship spend investment business performance indicator
Compound Annual Growth Rate
Jonathan A. Jensen
Columbia College Chicago, 618 S. Michigan Avenue
Suite 700, Chicago, IL 60605, USA
Tel: + 312 933 2940
Relay Worldwide, 375 Hudson Street, 13th Floor, New York, NY 10014
Tel: + 212 471 5495
Do corporations who invest in sponsorship perform better? Examining…show more content… However, no studies appear to exist that examine the relationship between the larger group of companies that invest significantly in sponsorship and their business performance over an extended period.
The purpose of this case study is to examine the relationship between consistent investment in sponsorship and a company’s overall business performance. The study examines annual sponsorship spending data for more than 50 US-based corporations, which constitutes all companies who invested a minimum of US$15 million per year in sponsorship for the five-year period from 2005-2009.
Business results achieved by these companies, including the key performance indicators of stock price appreciation, total revenue, net income and earnings per share, over the same five-year period were also tabulated. In order to correct for the varied sizes of the companies, we calculated the five-year Compound
Annual Growth Rate (CAGR) for each, and the percentage change for each company’s stock price from 2005 to 2009.