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Sponsorship Spending To Slow In 2014 As Marketers Focus Budgets On ‘New Media’

The Drum, January 09, 2014

By Jennifer Faull

The spend of marketing dollars on sports, entertainment, cultural and other partnerships will slow in 2014, according to a new report from IEG.

The study suggests that $20.6bn will be spent by North American companies on sponsorships this year, up 4.3 per cent on 2013 but below the 5.5 per cent growth predicted last January.

IEG have suggested that, although sponsorship is still seeing steady growth, corporate interest in other marketing alternatives – particularly digital (including social and mobile) media – has dampened enthusiasm for significantly increasing sponsorship spending.

However, the growth rate for sponsorship spending is expected to exceed outlays for traditional advertising in North America.

According to the worldwide media and marketing forecast produced by parent company GroupM, ad spend will grow 2.8 per cent due to large increases in digital spending (nearly 10 per cent growth in the US) offset by a continued decline in newspaper spending (down two per cent) and slow growth in ad dollars for TV (2.6 per cent), radio (one per cent) and magazine (one per cent).

Spending on other forms of marketing—including PR, direct marketing and promotions—is expected to grow 4.4 per cent in 2014.

Globally, IEG forecasts a 4.1 per cent sponsorship spending growth to $55.3bn in 2014.

Excluding North American spending, sponsors from all other parts of the world spent $33.4bn in 2013, a figure IEG predicts this year will increase by 3.9 per cent to $34.7bn.

Looking at Central and South America, host to the FIFA World Cup 2014 and the 2016 Olympic Games in Brazil, IEG forecasts a five per cent growth.

Comparing sponsorship spending to GroupM’s forecast for media and other marketing expenditures globally, advertising is projected to see the largest growth, 4.6 per cent, compared to 4.4 per cent for marketing/promotions and 4.1 per cent for sponsorship.