Preliminary data analysis reveals that, when holding constant team performance and driver quality (operationalized by constructors points and past driver championships), sponsors at the title level pay a premium of $9.47 million (z = 2.86, p = .004), while sponsors with a high level of brand equity pay a premium of $4.61 million (z = 2.10, p = .036). Results indicate that sponsors in the oil/fuel category pay a premium of $7.01 million (z = 2.94, p = .003). Among other reasons, these results are particularly interesting in consideration of past F1 research that has indicated sponsors investing at high levels are most likely to realize ROI in the form of televised brand exposure (Jensen & Cobbs, 2014), but also more likely to incur negative reactions in stock returns upon announcements of the F1 sponsorship (Cobbs et al., 2012).

1. A Multilevel Analysis of
Sponsorship Costs:
The Effects of Sponsorship Level,
Brand Equity, and Sponsor
Industry in Formula One Racing

2. Introduction
 Sponsorship growth outpacing traditional advertising
and sales promotion, yet ROI research limited
 Existing research focused on returns, not investment
 This study applies multilevel, random effects model to
analyze three years (2013-15) of prices paid by
sponsors of F1 racing teams
Returns (exposure, brand awareness/image, purchase intent, etc.)
Investment Price
ROI =
Majority of
sponsorship
research
Sparse
research

3. Literature

4. Hypotheses / Descriptive Statistics

5. Hypotheses / Descriptive Statistics

6. Results

7. Results

8. Implications
 Brand equity and shared nationality more salient
to pricing than other conceptions of congruence or
clutter
 High equity brands should scrutinize sponsorship
prices, particularly if shared nationality
 With negligible team performance effects,
sponsored properties may be able to manipulate
and maximize prices via levels offered