Behind The Numbers: Sponsorship’s Spending Decline
Posted: 1/20/2010 9:53:18 AM by
Jim Andrews | with 0 comments
We recently released IEG’s 25th annual sponsorship spending review and forecast, delivering the historic, if unwelcome, news that sponsorship spending by North American companies declined in ’09. If you haven’t had a chance to read the report and see the specific numbers, click here.
The fact that less was spent on corporate sponsorship last year does not come as a huge shock to properties who have had to work much harder to close deals at fair market value, nor to sponsors who have been directed to make budget cuts. As we reported on new deals and success stories in IEG Sponsorship Report last year—success defined mostly by the oft-repeated phrase “flat is the new up”—we also heard many tales that could not be published about discounting and sponsors who were going back and revisiting existing agreements intent on decreasing their commitments.
The news was not all bad, of course, but there was enough, and it continued straight through the last quarter, wiping out the possibility of significant new spending that would have given the industry the slight increase we optimistically forecast in our mid-year report in June.
Behind the overall numbers, some insights on what went on in corporate sponsorship last year within the major property sectors:
Sports: Given its generally higher price tags, this was the segment that came under the most pressure from current sponsors looking to renegotiate and faced prospects unwilling to entertain new deals because of the perception they could not afford them.
Entertainment: Spending figures here were helped by new branded entertainment deals with TV programming that crossed the sponsorship threshold, i.e. they qualified as sponsorships based on their ability to be exploited off the screen and measured qualitatively.
Causes: A mixed year, with many larger organizations struggling to maintain existing partnership revenue levels, while a number of smaller charities and nonprofits were able to “market the downturn” and make the case why support was more important than ever.
Festivals, Fairs and Annual Events: Came through the year in relatively good shape thanks to positioning as affordable and consumer-appropriate alternatives to higher-priced opportunities.
Arts: With the category’s heavy reliance on financial services and automakers, ’09 did not offer much good news. However the long-term effects of diversifying their corporate support base should serve arts properties in good stead for the long term.
Associations: A year of contrasts, with those organizations that had year-round, holistic approaches to sponsorship managing to grow revenue—in some cases substantially—while those that still sell events and other inventory piecemeal took it on the chin.
The good news is that things are looking up for 2010, as reflected in the report’s forecast for growth, so this year should not be one we will want to forget!
Read more blog posts
Filed under: associations, cause marketing, entertainment, events, festivals, IEG, spending, sports, trends, arts