In Depth
Cold Hard Facts: IEG/Performance Research Study Documents Economy’s Effect On Sponsors
Chart 1: How will your 2009 sponsorship spending compare to 2008?
Percentages do not equal 100 due to rounding
: In case you needed proof that the downward spiraling economy is having an impact on sponsors, here it is, courtesy of the ninth annual IEG/Performance Research Sponsorship Decision-makers Survey.
Fifty-one percent of the survey’s respondents said their companies’ spending on sponsorship fees will decrease this year from 2008 levels. Only 14 percent of sponsors plan to spend more, while 36 percent said their budgets would stay the same as last year (see Chart 1).
The survey for the first time asked sponsors specifically about the direction of their activation spending, and the numbers were only marginally better than the answers to fee spending. Forty percent of sponsors say they will decrease activation spending this year compared to last, while 17 percent will increase it and 43 percent will hold their leveraging budgets steady from ’08 (see Chart 2).
On an even more ominous note, slightly less than half of sponsors–47 percent–said they were seeking to get out of some of their current sponsorships even though those deals were not currently up for renewal (see Chart 3).
One bright spot among the survey responses was the revelation that 60 percent of sponsors say they would consider signing first-time sponsorships in ’09 (see Chart 4). That figure contradicts industry buzz that many sponsors had declared moratoriums on new deals this year.
However, the finding may not be as positive as it seems, if it means those companies are simply looking to abandon higher fee sponsorships and replace them with less expensive opportunities.
Two barometers of the industry’s health declined in this year’s survey. The average percentage of overall marketing budgets claimed by sponsorship fell from a record high 19.5 percent to 17.6 percent, while the average amount spent on activation relative to rights fees slipped for the second straight year to $1.40 for every $1 spent on rights fees from $1.50-to-$1 in the ’08 survey.
Research Spending Up, But Many Still Don’t Know ROI
Perhaps because of the constraints of the economy, sponsors are devoting more resources to evaluate sponsorship opportunities and to measure the success of their deals.
In the first case, the percentage of sponsors spending nothing on pre-selection research shrank from 47 percent to 41 percent (see Chart 5), while sponsors spending nothing on evaluating return decreased from 33 percent to 31 percent (see Chart 6).
However, the percentage of sponsors who said they did not know how their return on investment was trending grew from 24 percent to 31 percent (see Chart 14).
The survey was conducted online in February and received 110 responses.
Sources
Performance Research, Tel: 401/848-0111
Chart 1: How will your 2009 sponsorship spending compare to 2008?
Percentages do not equal 100 due to rounding
Chart 2: How will your 2009 leveraging and activation spending compare to 2008?
Chart 3: Is your company seeking to drop out of any current sponsorships (those not up for renewal)?
Chart 4: Is your company considering new sponsorships in 2009?
Chart 5: What percentage of a sponsorship’s total budget is typically spent on pre-selection research to evaluate fit?
Percentages do not equal 100 due to rounding
Chart 6: What percentage of a sponsorship’s total budget is typically spent on concurrent or post-event research to measure success?
Chart 7: How important are the following objectives when evaluating which properties to sponsor?
Percent of respondents who ranked the factor a 9 or a 10 on a 10-point scale, where 10 is extremely important
Chart 8: How valuable are the following benefits to you?
Percent of respondents who ranked the factor a 9 or a 10 on a 10-point scale, where 10 is extremely valuable
Chart 9: Which of the following marketing communication channels do you use to leverage your sponsor programs?
Chart 10: Which types of agencies, if any, do you use to help leverage/support your sponsorship programs?
Chart 11: Which of the following property characteristics do you typically analyze when making a decision to sponsor?
Chart 12: How important are the following analyses in the decision to change or renew your sponsorships?
Percent of respondents who ranked the factor a 9 or a 10 on a 10-point scale, where 10 is extremely important
Chart 13: How valuable are the following property-provided services?
Percent of respondents who ranked the factor a 9 or a 10 on a 10-point scale, where 10 is extremely valuable
Chart 14: Over the past few years, has your return on investment from sponsorship increased, decreased or stayed the same?
Percentages do not equal 100 due to rounding