Following up on my last post regarding “The Evolution of Sponsorship” study from The World Federation of Advertisers and sponsorship consultancy Lumency, the report contains additional noteworthy findings beyond the headlines regarding how little progress has been made in adopting successful partnership measurement practices.
- Survey responses indicate that the trend toward using sponsorships as a platform to support social responsibility and DEI goals is gaining traction. About half (49 percent) of brands said they “consider and drive sustainability and/or social equity objectives through sponsorships and their activation.” Another 36 percent said they were not currently doing so but were “working on it.” Only six percent indicated they had no immediate plans to incorporate sustainability and/or social equity.
- According to the report, “36 percent of brands reported an increase in their sponsorship budgets over the next two to three years. This growth underscores the increasing importance of sponsorship in establishing emotional connections with consumers through shared passions and values. However, some brands are seeing short- and mid-term macro-economic uncertainty. This affects marketing budgets, which can make sponsorship challenging because of the long-term commitments that often come with it. This could explain why 33 percent of brands expect no change, while 31 percent of brands expect a decrease in their sponsorship budgets.”
- Looking at how the sponsorship pie is sliced, 53 percent of brands were investing in sports sponsorships, followed by 22 percent in athletes/artists/entertainers, 17 percent in community, 15 percent in causes, 13 percent in music and 8 percent in arts.
- Brands surveyed for the report said sponsorship and activation spending accounted for 12 percent of their total marketing budget. That is considerably less that the 17 percent reported in the final IEG sponsorship decision-makers survey in 2017, but since 43 percent of the respondents this year admitted to not knowing or not tracking how much they spend on activation, the 12 percent figure is likely to be inaccurate.
In the “Recommendations from Lumency” section of the report, the consultancy makes a convincing case for understanding and accounting for the difference in valuing sponsorship packages and assets versus evaluating return on investment. “Consider efficiency and ROI separately. Deal efficiency is the ratio of rights fee spend to asset value and target efficiency. In short, through a particular sponsorship investment, are you putting your brand in front of the right audience(s), and do you have the right mix of assets from that investment and for the right spend? ROI is the measurable return on the brand and commercial objectives that you’ve set for that sponsorship investment.