Sponsorship spending worldwide is expected to grow by 4.9% this year to $65.8 billion, according to the 33rd annual industry review and forecast from ESP. That 4.9% growth rate would mark an uptick from last year’s 4.3% increase, which was dragged down by lower-than-expected growth in North America.
Indeed, while sponsorship spending in North America – the largest market – was expected to climb by 4.1% (with some caveats added at the time), the final tally revealed a rise of 3.6%. Other regions met predicted growth rates.
Spending on sponsorships both globally and in North America continues to grow at a faster rate than spending on advertising and marketing/promotions, per data from IEG parent company GroupM.
Spending Growth by Region and Property Type
North America remains the world’s largest sponsorship market, according to the ESP report, capturing close to 37% of the forecast spending this year (or a predicted $24.2 billion). Growth in the North American market will be slightly slower than the global average, though the forecast rate of 4.5% would represent a rebound from 2017’s results.
The fastest-growing region for sponsorship spending last year was again the Asia-Pacific (5.8%) region, and it looks to retain that lead this year with a projected increase of 5.7%. That would bring the Asia-Pacific total to $16.6 billion, just $1 billion less than the total in Europe (forecast for a 5.1% increase to $17.6 billion).
Looking closer at the North American sponsorship market, the study demonstrates that Sports will once again account for the lion’s share of spending, with a projected 70% share this year, consistent with last year’s forecast. Sports will also command the fastest growth rate, of 4.9%, narrowly ahead of the Entertainment sector’s 4.8% expected rise.
The predicted Sports sponsorship spending in North America, of $17.05 billion, would exceed the entire sponsorship spending total in Asia-Pacific and almost equal the total figure in Europe.
No other property type comes near Sports in the North American market: the next-leading category, Entertainment, is projected to comprise just 10% of sponsorship spending, or $2.4 billion. Close behind is the Cause category (forecast 9% share; 4.4% growth to $2.14 billion), with Arts further behind (4% share; 3.7% growth to $1.03 billion).
What Spenders Think
Highlights from a separate ESP survey of 100 sponsorship decision-makers indicate that:
- Category exclusivity is the most valuable benefit to respondents, with presence in digital/social/mobile media moving ahead of rights to property content and other benefits;
- When evaluating properties, the most important objectives are creating awareness/visibility, increasing brand loyalty, and changing/reinforcing image, as showcasing community/social responsibility falls in the ranks with respondents this year;
- Social media is once more the most popular channel used to leverage sponsorship, by virtually all respondents (98%), followed by public relations (79%) and hospitality (79%);
- Among social channels used to promote sponsorships, Facebook (95%) has extended its lead over Twitter (80%) for the broadest appeal, with Instagram (66%) and YouTube (57%) also popular;
- The vast majority of respondents intend to either increase (33%) or maintain (47%) their current levels of spending in 2018, though the 1 in 5 predicting a decrease is up from last yer;
- Two-thirds are considering new sponsorships this year (down from three-quarters last year), while 58% are seeking to drop out of a current sponsorship, up from 45% last year; and
- Assistance in measuring ROI/ROO is the most valuable service offered by sponsorship properties. For the majority (55%) of decision-makers, ROI from sponsorships has been on the increase. Still, 14% don’t know, perhaps related to 31% not having a budget for measuring ROI.