Following mass disruption to brand marketing activity and engagement amongst rights holders and their audiences throughout the course of the pandemic, the European sponsorship market declined by 23% in 2020 – shrinking for the first time in almost a decade. That said, we are now pleased to report significant increases in the level of optimism across the sponsorship market, regarding both growth and sustainability.
Albeit the European market remains 9.3% below the 2019 level of €30.69bn, 2021 saw a year-on-year spending increase of 17.8% (ESA Market Overview), with the UK market performing particularly well following a successful vaccination rollout and resumption of live entertainment – in fact, the UK has enjoyed the second-highest growth rate of any region over the past 12 months.
Nevertheless, despite an estimated 54% of sponsors expecting to increase their spend this calendar year, with a total growth in investment across the sector expected to reach 8% in 2022 (ONSIDE/ESA), the sponsorship market in 2022 is set to come under more scrutiny than ever.
Whilst consumer experience is at the core of sponsorship activity, this scrutiny translates to the importance of sponsorship governance and ROI – data-led activity that rights holders and brands alike must be able to support.
Traditionally, sponsorship investment has largely been based on bottom-up market research, centred around KPIs such as brand awareness and perception. Now though, we find ourselves in the midst of a fundamental shift towards outcome-based performance measurement that will undoubtedly influence brand spending and the way deals are structured. Brand sponsors are encouraged to measure their investments more accurately to identify the tangible outcomes of any activity – answering the question, how much retail value does any given partnership generate?
The transition from raising awareness to conversion rates shows the growing role sponsorships must play throughout the full marketing funnel – a requirement evidenced by growing investment in sponsorship analysis and the rise of AI-powered measurement tools within our industry.
Whilst the impact and influence of sponsorship activation can be measured using a vast range of KPIs, namely brand engagement, follower and audience growth, and brand awareness/perception, Mongoose Consult urge all prospective sponsors to address the tangible impact partnerships have on MQL (marketing qualified lead) scores and localised or national lead/sales lift. In fact, according to Nielsen’s 2021 sponsorship study, measuring sponsorships against sales impact and alongside other marketing activities can lead to a 20% increase in ROI (Nielsen).
Put simply, Rights Holders must invest in their data and insight solutions to better demonstrate value to partners, whilst brands must continue to invest and/or develop their sponsorship governance solutions.
There’s no questioning the ever-present role that sponsorship continues to play, remaining the second-largest marketing communications spend for most brands post-pandemic, accounting for between 11% and 19% of the total budget (WFA). However, the global COVID-19 pandemic is sure to have a lasting impact on our industry with brands being more selective about their sponsorship portfolios, focusing increasingly on sponsorship governance and measurement.
Close attention must be paid to the associated value exchange and deliverables of any commercial partnership. To find out more, please get in touch with Mongoose Consult - Harvey.firstname.lastname@example.org
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