The Coronavirus Outbreak Has Impacted Sponsorships

BY Kathy Crosett
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The coronavirus has impacted sponsorships in a big way as events across the country have been postponed or cancelled. Activities like major league games, concert and parades generate significant sponsorship revenue for some of your clients. Going forward, they may need to think differently about how sponsorships will work.

Size and Influence of Sponsorship Marketing

Most consumers, about 60%, have cited sponsorship marketing as an influence on their purchasing tendencies. On the local level, at least 25% of consumers notice sponsorships of the events they attend. They also pay attention to which marketers are sponsoring sporting events.

Before the COVID-​19 stay-​at-​home orders were issued, businesses were poised to increase sponsorship spending by just over 3% this year. Winterberry analysts reported that experiential/​sponsorship spending amounted to $47 billion in 2019.

The Virus has Impacted Sponsorships

IEG analysts expect the gap between what was anticipated and what will be spent on sponsorships this year to be about $10 billion. There’s also a disconnect regarding what the rest of 2020 will look like in the events and sponsorship space. IEG data shows that only 45% of brands believe all sponsorship value can be made up this year. However, 64% of properties believe lost value can be recovered, perhaps by rescheduling some events in a few months.

To accomplish that, about 20% of both brands and properties believe term lengths will be extended. This strategy could work well if they can agree on which events brands might want to sponsor if the original ones aren’t rescheduled. It’s also possible that postponed events will be held later this year.

At least 31% of brands don’t anticipate being able to make their original sponsorship intentions work this year and they’re hoping for a prorated refund. So far, only 11% of properties agree that prorated refunds will be the end result of what has likely been a challenging situation. These data points all show how that the virus has significantly impacted sponsorships. 

Going Forward

At this point, the number of unknowns about public gatherings and events remains large. As IEG analysts point out, brands are worried about whether consumers will attend events and what the appropriate messaging will be. And we still aren’t sure whether in-​person gatherings will be allowed by the fall or by 2021.

In the meantime, analysts point out that the nature of sponsorship may need to change from signage and media that solely focuses on the actual event. A solid partnership could keep interested consumers engaged with social media outreach and other digital content. When brands can measure higher engagement and revenue from this kind of activity, they’ll be more willing to spend on sponsorships in the future.

Talk with brands and with event managers about how COVID-​19 has impacted sponsorships. That conversation can lead to a good discussion about how marketing might change in the next few months. And, to learn more about consumers who attend specific events and the media that influences them, check out the AudienceSCAN profiles available at AdMall by SalesFuel.