Corporate logos showing NASCAR team sponsors.
To sponsor something is to support an event, activity, person, or organization financially or through the provision of products or services. A sponsor is the individual or group that provides the support, similar to a benefactor.
Sponsorship is a cash and/or in-kind fee paid to a property (typically in sports, arts,entertainment or causes) in return for access to the exploitable commercial potential associated with that property, according to IEG.
While the sponsee (property being sponsored) may be nonprofit, unlike philanthropy, sponsorship is done with the expectation of a commercial return.
And, while sponsorship can deliver increased awareness, brand building and propensity to purchase, it is differentthan advertising. Unlike advertising, sponsorship can not communicate specific product attributes. Nor can it stand alone. Sponsorship requires support elements. And, while advertising messages are controlled by the advertiser, sponsors do not control the message that is communicated. Consumers decide what a sponsorship means.
Size and Growth of the Sponsorship Market in North America
IEGSponsorship Report, which has conducted primary research on sponsorship spending annually since 1984, projects $18.2 billion will be spent by companies in North America on rights fees in 2011, up 5.2 percent over 2010. Sponsorship expenditures by North American companies grew 3.9 percent in 2010 to $17.2 billion.
As it has in most years over the past two-plus decades, sponsorship’s growth rate will beahead of the pace experienced by advertising and sales promotion, according to IEG. North American media spending, which rose two percent in 2010, is projected to increase 3.9% in 2011, according to the worldwide media and marketing forecast produced by GroupM, the global media investment management operation of WPP Group plc. (GroupM is the parent company of IEG SR publisher IEG, LLC.)
Consumerand business-to-business promotional spending did not increase in 2010, declining for the second year in a row—although the drop of 3.3 percent was an improvement from the decrease of 7.1 percent in 2009, according to the Communications Industry Forecast 2010-2014 published by private equity firm Veronis Suhler Stevenson. VSS projects that promotion spending will be flat in 2011 compared to 2010North American corporate spending on cause sponsorships grew at the highest rate of the six major property sectors in 2010—6.7 percent—as marketers sought to earn goodwill from consumers and other stakeholders still recovering from the recessionary economy, according to IEG research.
The largest segment—sports—grew 3.4 percent in 2010, as a 7.6 percent jump in spending on the four major U.S. prosports leagues and their teams was dragged down by little or no growth among other types of sports, including auto racing. For 2011, continued interest in major sports properties should drive category spending enough to make it the fastest-growing segment, as cause spending cools down to a still respectable growth rate of five percent.
The category that grew the least in 2010, the arts at just2.7 percent—should improve in 2011 to a 5.1 percent increase, as its two largest sponsor categories—automotive and financial services—continue to see improved overall fortunes and turn the sponsorship spigot back on.
A fast-growing segment of the industry relies on social media and its virtual ability to extend sponsorships in a viral manner. The largest community of sponsorship professionals islead by Dan Beeman with nearly 8,000 members worldwide in Sponsorship Insights Group on LinkedIn.
The Global Sponsorship Market
IEG projects spending on sponsorship globally to grow 5.2 percent in 2011 to $46.3 billion. Subtracting expenditures by North American companies, the rest of the world’s sponsors spent $29.1 billion on partnerships in 2010 and IEG projects that sum to increase 4.8...