Brands, Properties Face A Projected $10B Gap In Sponsorship Value

May 7, 2020

This article is included in these additional categories:

Business of Marketing | Cross-Media & Traditional | Industries | Marketing Budgets | Media & Entertainment | Sponsorships | Sports

IEG Sponsorship Outlook Brands v Properties May2020With sporting and entertainment events being cancelled or postponed due to the coronavirus, the US sponsorship industry is now looking at an estimated $10 billion gap in value. Brand sponsors and properties are not entirely aligned on the recovery of this value, according to survey data from IEG.

Earlier projections from the Winterberry Group estimated that experiential/sponsorship spend would grow by 3.1% year-over-year in 2020. This forecast was made before the coronavirus pandemic which has, so far, forced 20,000 sports and entertainment properties to cancel or postpone events or close temporarily. This has impacted 120,000 active sponsorship agreements and 5,000 brands, per IEG’s estimates.

And while both brands and properties agree in some areas – that everything will need to be re-evaluated, that sponsorship spending will decrease, and that sponsorship agreement terms lengths will be extended – in other matters their thinking is not in parallel. For example, sponsorship properties (64%) are far more optimistic than brands (45%) that all lost sponsorship value can be made up.

On the other hand, 3 in 10 (31%) brands expect that agreements will be prorated or that they will receive refunds, compared to 11% of properties that agree that this is a possibility.

All told, nearly half (49%) of properties agree that they will be completely overhauling plans, compared to a mere 7% of brands.

Roughly half (52%) of sponsorship decision-makers estimate that sponsorship will see 3-6 months of downtime before sponsorship returns to some degree of normality, while more than one-third (37%) are less optimistic and predict the downtime will be more than 6 months.

Looking to the future, IEG data shows that 8 in 10 (79%) brands will approach their marketing mix differently, while 6 in 10 (60% of) properties will change their sponsorship structures and sales once the pandemic has ended.

About the Data: Findings are based on a survey field March 26-April 8, 2020 of sponsorship decision-makers in the US, including responses from the top 100 sponsorship spenders and a cross-section of major rights holders across sports, entertainment, arts and social causes.

Chart-Library-Ad-1

Explore More Articles.

Which Skills Are Important in RevOps?

Which Skills Are Important in RevOps?

9 in 10 RevOps professionals view data analysis skills as being important, a high percentage also don’t believe they need this skill for their job.

Marketing Charts Logo

Stay on the cutting edge of marketing.

Sign up for our free newsletter.

You have Successfully Subscribed!

Pin It on Pinterest

Share This