Sponsorship Spend Heading Up, As Brands Seek Niches

Kia-BSponsorships are on the rise this year, according to GroupM sports sponsorship consulting and research firm IEG, in its 28th annual year-end industry review and forecast. The firm sees a 5.5% increase in sponsorship spending by North American companies this year over 2012, when companies spent $18.91 billion. Globally, IEG forecasts 4.2% growth.  

The study says companies see sponsorship as the route to building awareness, attention, support and loyalty. And the firm finds that sponsorship is no longer the stepchild to advertising, but shares the podium in integrated marketing. Such programs are also more likely now to be a leg of multiplatform, cross-channel programs, notes the firm.

The firm predicts that spending against sports this year will be $13.79 billion -- a 6% increase versus last year; entertainment will be $2.03 billion, up 5.1%; and cause-marketing programs will be $1.78 billion, a 4.8% improvement versus last year. The firm predicts arts will be $920 million, a 3.3% improvement over 2012; and festivals, fairs and annual events will grab $849 million, up 2.9%.

Jim Andrews, SVP of IEG, tells Marketing Daily that new sponsorship experiments both by major brands and smaller brands seeking a niche are driven partly by participation saturation. "We have reached a point where there is a lot of clutter," he says. "So brands are looking to make these programs unique in terms of how and where they are activating." 

And sports properties are obliging by extending their seasons and offering sponsorship opportunities around such events as player drafts, beginning of the season and playoffs. "And there are promotional windows around all of them." Extensions are also vertical with sponsorship opportunities around platforms like social media, and  "gamification." "They are taking it beyond the stadium and beyond broadcast," says Andrews. 

And while category exclusivity is the gold standard for a level of sponsorship, a lot of brands aren't going there because of costs, notes Andrews -- including major players like soft drinks and beer, which are highly competitive. "When you look at pro sports, you will see Anheuser-Busch and MIllerCoors. We are seeing in some categories they are saying 'We want to be in this sport but it's cost-prohibitive to buy exclusivity.'"

Instead of being the exclusive sponsor of a sport, marketers are finding exclusive opportunities in different promotional territories: retail, tailgating, stadium activation. "We are seeing more of a carving out of those opportunities; brands see they don't need to be an all-encompassing partner as long as they have a little area they can own." 

He also sees more brands creating their own sponsorship programs, à la Red Bull Stratus.

Recommend (2)
1 comment about "Sponsorship Spend Heading Up, As Brands Seek Niches ".
  1. Michael Deignan from Virtual Fan Network , January 8, 2013 at 1:01 p.m.
    Sports marketing doesn't fit in a box and that's what's great about it. It allows marketers the chance to be creative and develop unique experiences that engage fans. If the story above is at all interesting and sports is going to be part of your marketing mix I urge you to take a look at our company, the Virtual Fan Network. We're reinventing sports marketing by offering athlete driven media campaigns to advertisers on a CPM model. Imagine getting access to the biggest names in sports without dealing with the hassle of traditional endorsements. Yes, we do that! Empower professional athletes to reach fans and build loyal relationships! http://virtualfannetwork.com