Brand building advertising invests money into creating goodwill with a customer. Without further spending such goodwill declines. There are other ways to create goodwill. For example, US universities do so through the funding of sports. Such funding has its payoff through things like the Flutie effect.
The Flutie Effect
Doug Chung looked at the impact of collegiate athletic success.
- 1) Is goodwill created by on-field performance?
- 2) Will this decline if performance isn’t maintained?
Specifically, Chung wanted to uncover successful teams’ impact on applications to attend their college.
A “Flutie effect” is seen when successful teams stimulate applications. Doug Flutie, a Boston College quarterback from the 1980s, has the honor of lending his name to this. Flutie won the Heisman trophy, and his achievements are informally credited with creating a 30% increase in applications to his college.
The Effect Of Sporting Achievement
The task of parsing out the impact of sport from other aspects of the university’s achievements is not trivial. Application numbers should go up with non-sport-related successes. (It feels strange to have to say that that. Yet I am at a US university. When here it is important to remember that schools also have educational aims). Furthermore, the lack of data on individual applicants meant that Chung had to infer applicant quality. This required novel econometrics. Still, the most interesting piece of Chung’s research to normal people is his ability to demonstrate how on-field success drives college applications.
It is possible that applicant quality may help explain the reaction to sporting success. As such, Chung looked at the impact of sporting achievements on higher and lower academic quality applicants separately. He finds that “athletic success has a significant impact on the quantity and quality of applicants that a school receives. However, I find that students with lower-than-average SAT [standardized test] scores have a greater preference for athletic success” (Chung, 2013, page 681).
The Effect Is A Big One
The sheer scale of the effect is notable.
…when a school goes from being mediocre to performing well on the football field applications increase by 17.7%, with the vast proportion of the increase coming from low-ability students. However, there is also an increase in applications from students at the highest ability level.
Chung, 2013, page 681
Sporting success may be as effective as a large increase in faculty quality (a 5.1% pay rise). Alternatively, to increase applications to the same level, the university can take a major cut in tuition rates (down 3.8%).
Sport matters for US schools. This is not just for ticket revenues or merchandise sales. Sport drives university brands. Such brands are powerful.
For more on universities see here, here, and here.
Read: Doug Chung (2013) The Dynamic Advertising Effect of Collegiate Athletics, Marketing Science, 32, 5, pages 679-698.