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Sponsorship, Ad Spend Will Top $57B In Non-Olympic/World Cup Year

NY Sports Journalism, January 16, 2015

Although the big sports and entertainment events in 2015 will be the usual suspects — among them the Super Bowl, March Madness and Academy Awards — with no FIFA World Cup or IOC Olympics on the docket, companies are expected to spend more on marketing and sponsorship deals this year than in the World Cup-Summer Olympics year of 2014.

Sponsor spend by North American companies is projected to rise 4% in 2015 to $21.4 billion versus 2014. And even without such tent pole events as the Olympics, ad spend will grow 3.8% 2015 "driven by double-digit increases in digital spending, which should offset nominal growth for TV and out-of-home and declines in radio and print advertising," according to the just-released 2015 Sponsorship Report from consulting, research and analytics firm IEG, Chicago.

Globally, 2015 spend is forecast to rise 4.1% to $57.5 billion, matching 2014’s growth rate, according to IEG.

The IEG Sponsorship Report also showed that spend on other forms of marketing — including public relations, direct marketing and promotions — is expected to grow 3.5%.

The news was tempered somewhat by IEG indicating that for the second year in a row, the growth rate in North America is projected to be lower than the previous year, which was 4.4% in 2014 and 5.5% in 2013.

According to IEG, with a significant focus of marketers on digital marketing activity, "the goal for rights holders remains positioning their commercial partnership opportunities within the new digital ecosystem."

“Properties that do this successfully are those that have recommitted to the fundamental idea at the heart of sponsorship: Be the best at delivering the audience corporate partners seek,” Jim Andrews, IEG svp-content strategy, said in a statement. “In 2015, that begins with the ability to collect, analyze and apply audience data in order to offer true understanding and insights. Rights-holders must then work with partners on creating value for fans, viewers, participants, members, etc. The end results, often achieved through digital and social means, are partnerships that are relevant to and meaningfully engage audiences.”

"The end results, often achieved through digital and social means, are partnerships that are relevant to and meaningfully engage audiences.”

Internationally, IEG parent company GroupM expects advertising expenditures to rise 4.9% led by nearly 10% growth in China and strong spending in Brazil, the U.K., Japan and India. Marketing and promotion spending is projected to grow at the same 4.1% rate as sponsorship.

Excluding North American spending, sponsors worldwide spent $34.7 billion in 2014. That number should increase 4% to $36.1 billion this year, according to GroupM.

Economic conditions in Europe should continue to keep the region at the low end of the growth spectrum, as spending by European companies is projected to grow by 3.3% in 2015. While low, that is a significant improvement over 2014’s 2.1% growth.

The Asia Pacific region will continue to see strong interest in sponsorship across nearly all countries. Its projected growth of 5.6 percent should outpace Central and South America, even with the contributions from sponsorship spending connected to the 2016 Olympic Games in Rio de Janeiro.