The sponsorship industry is set to boom in the next few years, adding over £10 billion to its worldwide value by 2005 alone, says a study from SponsorClick.

Despite the economic downturn last year, the global sponsorship market still managed to expand by 5%, giving a yearly total of between £18.1bn and £18.8bn. This will surge to upwards of £29.1bn by 2005, says SponsorClick, a sponsorship consultancy.

The report also expects the sector to increase its share of companies’ total marketing budget. Sponsorship accounted for only 4% of the £481.9bn aggregated marketing spend recorded in 2000, well below the 49% for advertising and 25% for direct marketing.

The industry is also becoming more professional: “Until recently, upper management made sponsorship decisions based on personal taste, personal relationship or on an intuitive basis, which resulted in low return on investment. This decision-making process created little value from a shareholder's point of view, and has consequently changed,” stated the study.

“Sponsorship is now catching up with advertising in terms of research, decision-making tools and measurement of impact.”

America currently leads the industry, representing 40% of the sponsorship market compared to Europe’s 33%. However, the balance of power is set to change – by 2008, says the report, Europe will have increased its share to 38% while the US lags on 37%.

By far the most popular form of sponsorship is that connected with sport – around 63% of tie-ups relate to this area. Arts sponsorship accounts for 15%, while education and charity supply 4% each.

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