Promotions and popular events

Posted by Oliver Koll on Jan 18, 2018

Popular events like the Olympic games, Formula One, the Eurovision Song Contest or the Wimbledon Championships represent excellent occasions for brands to communicate to a large audience. While brands often concentrate their advertising activities around these events, the effectiveness of sales promotions in this context is less clear. A recent academic study compares the effectiveness of promotions during popular events with promotions by the same brands at non-event times.

  • Sales promotions are an effective marketing tool during events: On average, a 10% price cut increases brand volume sales by +60% in event times compared to +16% in non-event times (see figure).
  • Brands typically increase the frequency of their promotions but not the depth around event times. For example, during soccer championships (2010 and 2008), a leading alcoholic beverage brand increased the frequency of their promotion activities by 77% but price cuts were 28% less deep compared to non-event times.
  • The effectiveness differs by event: Soccer and Summer Olympics represent the best context for sales promotions in the Netherlands, whereas ice-skating performs “worst” (but still beating promotions in non-event times).
  • Promotions by brand leaders are not more effective around these events than for the average brand and event promotions by premium brands are actually less effective. Being an official event sponsor does not increase promotion effectiveness.

These results make a strong case for shifting marketing spend to promotional activities during event times. In addition, promotional clutter during events does not decrease the impact of promotions whereas advertising clutter during events has been shown to reduce its effectiveness.

*Analysis is based on panel data from GfK Netherland for the 4 largest HiLo retailers and around the 5 most popular events in the Netherlands between 2007-2011, for 60 categories and 242 brands with a market share of > 3%.  Source: Deleersnyder B., Keller W., Gedenk K. (2017). Price Promotions and Popular Events.