Sponsorship spending continues to increase, even amid the current economic downturn. North American companies are expected to spend $16.78 billion in 2008, a 12.6% increase and the sixth consecutive year of growth, according to
IEG Sponsorship Report. City and state fairs, arts and music festivals and local ethnic events all offer longevity, an arena for civic and cultural pride and crowds of attendees from diverse backgrounds. Plus, event sponsorships have that extra, intangible ROI that is almost always worth the initial outlay.
This growth can be attributed to a number of factors. For example, more small and medium-sized businesses are getting involved with sponsorship opportunities – everything from local sporting events to fairs and festivals to local causes like park clean-ups and clothing drives all boost a company’s visibility in their community and enhance their image without costing too much. While the sluggish economy forces many companies to cut back in other areas, they are spending more on local sponsorships and getting “more bang for the buck.”
The summer fair and festival season is in full-swing, and spending on these local events is also on the rise. In 2008, companies are expected to spend $754 million to sponsor these annual events across the United States, up 7.7% from $700 million last year (
IEG Sponsorship Report). These types of community events remain strong during tough economic times due to the fact that they provide access to large groups of people representing diverse demographic segments – people who share a positive experience together in one place, at one time. Plus, sponsors are utilizing packages with tickets and VIP events internally to build employee morale and retention. Ethnicevents.com provides a comprehensive calendar of these and other events.
Bundling also plays a role in sponsorship’s increase. Traditionally it grouped assets into sponsor value packages, like banner display, logos on t-shirts, passes to a VIP event and a photo opportunity with the headliner. The newest trend tends toward multi-faceted deals for companies in lieu of just one event or tour. For example, Live Nation just announced an estimated $100 million deal with Citi Cards. The deal makes Citi Cards the “official credit card partner” and includes concerts, online ticketing and access to the artists through VIP events and promotions.
Live music in general continues to foster sponsorship growth. An estimated $1.4 billion will be spent to sponsor music festivals, tours, concerts and venues, a 4% increase from last year (
IEG Sponsorship Report). Lately, the music industry is tapping into brands and categories not usually involved in live music sponsorship. Crocs, Inc. just signed deals with a number of venues such as the
New Orleans Jazz & Heritage Festival,
Milwaukee’s Summerfest and Manchester, Tennessee’s
Bonnaroo Music and Arts Festival. BlackBerry presented John Mayer’s 2007 and this year’s 2008 tour, and Honest Tea will be part of the “Another Kind of Green” Eco-Village at each Mayer concert venue and are sponsoring a contest to win John Mayer tickets, sound check passes and Honest Tea product. The brands, bands and venues are finding these partnerships to be mutually rewarding and continue to add more to their line-up.
Last and certainly not least is the sports category. With the 2008 Beijing Olympic Games looming, sports continues to lead with a projected spend of $11.6 billion, which would make for a 16.7% increase this year. Recently published research by The World Sponsorship Monitor shows a consistent trend in the global growth of sponsorship over the last five years. In an analysis from a statistically relevant sample of 1,196 new sponsorship deals in 2007, a whopping 84% (and the top 20 sponsorship deals) were sports related.
One of the biggest trends right now, according to William Chipps, senior editor, IEG Sponsorship Report, is measuring return on investment. Chipps says “Measuring ROI is becoming more and more important as the economy continues to weaken – ten years ago companies used to spend sponsorship money blindly, but they are now trying to establish metrics to measure ROI. Companies are watching every dollar that is being spent, and marketing managers need to justify their budget and gain internal buy-in. They need to demonstrate the success of their sponsorship programs. It’s an inexact science, and most companies are still trying to get arms around it.”
More and more companies are realizing that sponsorship opportunities combine seamlessly with their marketing and business goals. They know consumers associate sponsors with the event/experience and are selecting accordingly to their great benefit. The visibility, the experience and ultimately the relationships from a well conceived, strategic sponsorship are obviously paying off in today’s uncertain environment, as is evidenced by the continued growth in sponsorships across all areas.
