Sponsorship spending to rise

13 January 2011

NEW YORK: Sponsorship expenditure should rise by over 5% worldwide in 2011, as the industry continues to rebound from the economic downturn.

According to specialist consultancy IEG, part of WPP Group, global spending through this channel climbed 5.2% in 2010, reaching $46.3bn (€35.7bn; £29.7bn).

This constituted an impressive recovery after the sector posted declining revenues for the first time in 2009, as the recession impacted marketing budgets.

It also beat the projected increase of 4.5% which was outlined by IEG in a similar study published last year.

Such a positive trend is likely to extend into 2011 following another 5.2% expansion to $48.7bn, as demand strengthens across the globe.

"Based on the slightly accelerated pace of deal-making experienced in 2010 and our conversations with sponsors and properties about prospects for the coming year, we're confident the industry has rebounded from the historic low point of 2009," said Jim Andrews, IEG's editorial director.

During 2010, North American companies heightened their collective outlay by 3.9%, hitting $17.2bn overall.

Again, this total was ultimately ahead of the 3.4% uptick estimated in IEG's prior predictions.

Sports made $11.7bn in 2010 - a rise of 3.4% - and is anticipated to witness a further 6.1% improvement in 2011, achieving a value of $12.4bn.

This area will thus contribute a 68% share of the North American market, indicative of its dominant position.

Entertainment, tours and attractions registered $1.75bn last year having logged a 6.3% annual lift, with figures pegged to pass $1.8bn this year.

Funding for good causes rose 6.7% to $1.62bn in 2010, and may yield around $1.7bn in 2010.

Corporations also boosted their support for the arts by a more modest 2.7% last year, to $842m, and should receive $885m this year.

Festivals, fairs and annual events will take $820m in the latter period, while associations and membership organisations deliver $820m, both observing growth in the 5% range.

Looking forward, IEG stated North American expenditure could stand at $18.2bn in 2011, equivalent to a 5.9% expansion year-on-year.

Elsewhere, Europe posted $12.9bn in 2010 having seen returns jump 5.8%, and is due for an equally favourable shift in 2011, coming in at $13.6bn.

Asia Pacific generated $10.6bn last year and is envisaged to record $11.1bn this year, as the region retains its allure among brand owners.

Central and South America saw totals climb to $3.7bn, but failed to meet the expected 5.7% improvement forecast for 2010.

However, the fact Brazil is hosting the FIFA World Cup in 2014 and the Olympic Games in 2016 might drive greater sales in the future.

Revenues in all other countries - including nations from Africa and the Middle East - are set to increase by 5.1% to $2.1bn in 2011, the report concluded.

Data sourced from IEG; additional content by Warc staff