Virtual advertising in sports events: does it really work?(RESEARCH PAPER)(Report)

Executive summary

Virtual advertising is a technology that allows digitised superimposition of images (i.e. advertising signage) into a television broadcast (Cianfrone et al, 2006; Pyun & Kim, 2004). Little has been known about the effects of this new form of advertising on potential customers, and this paper serves as an exploratory study to deliver more insights into the effectiveness of virtual advertising.

We hypothesised that virtual advertising is recognised as such by the recipients. Furthermore, we tried to find out what factors influence the effectiveness of virtual advertising. Variables which can be assumed to influence the measured effectiveness are brand awareness, duration of exposure and frequency of exposure (Tellis, 1997; Longman, 1997; Pieters & Bijmolt, 1997; Turley & Shannon, 2000; Sander, 2004). The impact of these variables was also measured for conventional advertising. We also looked at the role of attitudes towards advertising in general as well as attitudes towards virtual advertising. We hypothesised a positive correlation between attitude towards advertising in general and attitude towards virtual advertising. Our stimulus for this study was an 18-minute video clip from a televised soccer match. Research participants (n = 142) were students of a German university.

The findings indicate that most of the respondents recognised virtual advertising. Our model gives an excellent explanation for the effect of the variables (brand awareness, duration of exposure and frequency of exposure) affecting the respondents' recall performance. The frequency of exposure appears here as the key explanatory variable.

Finally, we compared the participants' attitudes towards advertising in general with their attitudes towards virtual advertising. We found a highly significant and positive correlation.

In conclusion, this investigation provides fundamental data for further research on consumer responses to virtual advertising in sports broadcasts. However, there is only a little conclusive evidence regarding the effectiveness of different kinds of virtual advertising (e.g. 3D animation, animated virtual advertising) so far. More effort has to be made in this direction.

Introduction

Virtual advertising has been in use in the U.S. since the mid 1990s, frequently during sports events (e.g. soccer, baseball, basketball). In Europe, especially due to restrictive regulations, virtual advertising has not so farbeen used very often.

Virtual advertising can be defined as the insertion of brands, products, trademarks, logos, slogans and 3D animations by means of digital, computer-supported television signal processing (Cianfrone et al, 2006). This involves overlaying an advertisement into a space in the telecast--either over the top of existing ground signage or billboards or in a 'free space' on the field of play or in the crowd (Turner & Cusumano, 2000). The advertising is therefore only visible to the television viewer--i.e. the people in the stadium cannot see the imposed image.

The advantages of virtual advertising over traditional advertising are evident. Virtual advertising allows the multiple sale of existing advertising space, and during international sports events in particular, advertisements can be delivered in country-specific broadcasts. Hence, advertising during major international sports events becomes interesting not only for worldwide operating firms, but also for those acting solely at a national level.

The implementation of this technology can be differentiated even within a country, at a local or regional level. This permits a targeted group-specific use by tailoring advertisements according to regional consumers' buying habits and brand preferences. Moreover, it allows country-specific advertising regulations to be taken into consideration (e.g. for alcoholic beverages or tobacco products). In addition to the existing advertising, it facilitates the use of new advertising space within a certain sports event.

These advantages suggest the enormous potential yield of virtual advertising. In 2004 it was estimated that in the U.S. alone, considerably more than $2 billion was being invested in virtual advertising (Pyun, Han & Ha, 2004), and substantial growth rates since then can be assumed.

However, little has been known about the effects of this innovative form of advertising on potential customers. This paper has therefore been conceived as an exploratory study to deliver more insights into the effectiveness of virtual advertising and will show future areas of research in this field.

Literature review

Although there are a large number of studies that examine various practical and theoretical aspects of sponsorship (see the overview in Walliser, 2003; for more recent studies, Wakefield et al, 2007), so far there have been relatively few studies dealing with the effects of virtual advertising as a related communications instrument. Some studies examine the acceptance of virtual advertising among viewers. In general, virtual advertising is accepted by viewers, but with some limitations.

The market research institute FORSA investigated the attitudes of German viewers towards advertising in general and specifically towards virtual advertising during soccer matches (FORSA, 1998), with 1,003 respondents interviewed by telephone. The results showed that 31% of respondents felt disturbed by virtual advertising, 16% were indifferent towards it and only 18% did not feel disturbed; 35% had no opinion. As for gender, 40% of males and only 22% of females felt rather distracted. Older people also felt more disturbed (41% of those aged 50-59) than the under 30s (who had hardly any objections to virtual advertising).

A study commissioned by GLOBAL SPORTNET was carried out with a 13-member discussion group in Munich (Germany) using the soccer match Benfica Lisbon versus FC Bavaria Munich as well as a video recording of the soccer match Glasgow Rangers versus AC Parma (Sasse & Ludwig, 2002). The testers pointed out the conspicuousness of virtual advertising. Insertions during the match were perceived as disturbing, but it was presumed that viewers would get accustomed to them. Furthermore, the group highlighted certain economic aspects, such as the better accessibility for target groups as well as the multiple marketability of the same advertising space to different customers at different prices. However, it was noted that virtual advertising should be carried out in a discreet, unobtrusive way, as otherwise there might be a danger of viewers moving over to commercial-free pay-TV stations. On the whole, the acceptance of virtual advertising was high among the members of the discussion group.

The purpose of the study by Bennett et al (2006) was to analyse the perceptual antecedents of advertising in general through television commercials and virtual advertising to compare the two media vehicles in a sports broadcast setting. They investigated attitudes towards television commercials and virtual advertising among students from a large university in the south-eastern U.S. using Brackett and Carr's (2001) model, with its perceptual antecedents (credibility, irritation, entertainment and informativeness) as independent variables. The findings indicate that individual responses to advertising vary according to the type of advertising. The results show that television commercials were perceived as being more entertaining and informative but also more irritating and less credible than virtual advertisements, regardless of their location. However, virtual advertising with logo ads above or below the score display was considered more credible than any other type of advertisement. This means that different locations will trigger different responses. Therefore, the location of virtual advertising is an important consideration for media planning. On the whole, virtual advertising performed well compared to conventional advertising forms.

A focus group study carried out at the University of Trier (Germany) investigated how television viewers react to different forms of virtual advertising and the new advertising space. It also examined how the increased quantity of advertising--possibly eclipsing the sports event--is perceived and to what extent the credibility of television may suffer under virtual techniques (Sasse & Ludwig, 2002). The study was based on the same soccer matches as in the GLOBAL SPORTNET study. A video demonstrating the technical …