Marketers Slow Rate of Sponsorship Spending

Marketers have long relied on sponsorship of events and organizations as a way to get their name in front of consumers.  Enterprises believe that consumers who are enjoying themselves at a sports bandcompetition or a concert will view the marketers who helped to pay for the event positively. But a new report from the IEG suggests that North American marketers may be cutting back on sponsorship and shifting their spending to newer digital formats.

In the past few years, marketer sponsorship has been growing at a healthy rate:

  • 2011 $18.1 billion
  • 2012 $18.9 billion
  • 2013 $19.8 billion

However, in 2014, the projected spending on sponsorship is pegged at $20.6 billion. This is a 3.9% increase compared to the higher bumps in previous years.

New media has been offered as one explanation for marketers’ slack interest in sponsorship funding. Jim Andrews, IEG senior vice president, content, is encouraging sports, entertainment and other properties to counter this trend by emphasizing how effectively they can drive traffic to marketers using new media.

IEG analysts say that sponsorship dollars will be allocated as follows this year:

  •  Sports 70%
  • Entertainment 10%
  • Cause marketing 9%
  • Arts 4%
  • Festivals, fairs, annual events 4%
  • Associations/​membership organizations 3%

Analysts also expect that sports organizations will benefit from the largest increase in sponsorship funding (5.1%) while festivals and fairs can expect to see only a 1.7% increase in allocations from marketers.  The IEG study also finds that larger organizations are much more effective at obtaining marketing funding. IEG analysts caution that ‘the transactional model of sponsorship’ which smaller organizations rely on is at risk. These organizations must work harder to provide demonstrated value to the marketer in exchange for funding. Organizations may also want to run surveys of audiences and show the effectiveness of advertising at their events.

Have you noticed a new reluctance on the part of marketers to sponsor events? Do you think their emphasis on new media is misguided given that some analysts believe out-​of-​home marketing is rapidly growing? After all, one could argue that sponsorship marketing serves in some ways as out-​of-​home marketing.

Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.