Global brand spend on sports sponsorship is expected to increase by 4% to reach £35bn this year, but rights-holders are missing out on potential revenue of an extra £14bn because of outdated rights packaging, a new report has found.
Two Circles, a sports marketing agency owned by WPP, said the actual value of sports brands’ sponsorship assets will be worth £49bn in 2019, meaning that rights-holders, such as leagues, teams or tournaments, are under-exploiting their sponsorship deals.
“Most rights-holders continue to package and sell sponsorship just as they did 20 years ago – offering brand exposure through linear broadcast coverage as the main benefit for brands,” said Gareth Balch, CEO of Two Circles.
“Globally we’re spending more time consuming entertainment on digital platforms; we consistently see a disparity between what brands need to reach an audience effectively and quantifiably, and what digital assets rights-holders are able to offer in their sponsorship packages,” he added.
The research by Two Circles found that rights-holders have under-exploited their sponsorship businesses by £12bn a year on average since 2014 despite sports sponsorship spend having grown by 4% on average over the same period.
However, on a more positive note, Two Circles predicted that global spend on sports sponsorship would hit £48bn by 2024, representing average year-on-year growth of 6% between 2020 and 2024.
It said the upwards trend would occur as more rights-holders package digital assets into sponsorship propositions and as brands are offered data-driven evaluation tools to track the real-time effectiveness of their campaigns.
“Rights-holders are adapting to this new world and we predict a sports sponsorship correction: by embracing the power of data and digital to create sponsorship assets that better satisfy the objectives of brands, rights-holders will realise the true value of their sponsorship businesses,” said Balch.
“This will drive greater spend from brands in all sectors, not just the ‘traditional’ sectors for sport such as financial services, automotive, airlines and gambling.”
Balch went on to tell Campaign of the “amazing” opportunities presented by the sponsorship of women’s sport, which he predicted will be the fastest-growing element of sport in the coming years.
“Sport is working towards a world where it has genuine gender parity,” he said. “That’s obviously good for society, and it presents amazing opportunities for sponsorship.”
Two Circles, a sports marketing agency owned by WPP, said the actual value of sports brands’ sponsorship assets will be worth £49bn in 2019, meaning that rights-holders, such as leagues, teams or tournaments, are under-exploiting their sponsorship deals.
“Most rights-holders continue to package and sell sponsorship just as they did 20 years ago – offering brand exposure through linear broadcast coverage as the main benefit for brands,” said Gareth Balch, CEO of Two Circles.
“Globally we’re spending more time consuming entertainment on digital platforms; we consistently see a disparity between what brands need to reach an audience effectively and quantifiably, and what digital assets rights-holders are able to offer in their sponsorship packages,” he added.
The research by Two Circles found that rights-holders have under-exploited their sponsorship businesses by £12bn a year on average since 2014 despite sports sponsorship spend having grown by 4% on average over the same period.
However, on a more positive note, Two Circles predicted that global spend on sports sponsorship would hit £48bn by 2024, representing average year-on-year growth of 6% between 2020 and 2024.
It said the upwards trend would occur as more rights-holders package digital assets into sponsorship propositions and as brands are offered data-driven evaluation tools to track the real-time effectiveness of their campaigns.
“Rights-holders are adapting to this new world and we predict a sports sponsorship correction: by embracing the power of data and digital to create sponsorship assets that better satisfy the objectives of brands, rights-holders will realise the true value of their sponsorship businesses,” said Balch.
“This will drive greater spend from brands in all sectors, not just the ‘traditional’ sectors for sport such as financial services, automotive, airlines and gambling.”
Balch went on to tell Campaign of the “amazing” opportunities presented by the sponsorship of women’s sport, which he predicted will be the fastest-growing element of sport in the coming years.
“Sport is working towards a world where it has genuine gender parity,” he said. “That’s obviously good for society, and it presents amazing opportunities for sponsorship.”
Sourced from Two Circles, Campaign; additional content by WARC staff
