WARC: Sponsorship revenue beating other paid media

Sponsorship revenue growth is trending ahead of all other paid media excluding internet formats, with advertisers expected to spend US$66 billion (€56 billion) in sponsorship this year, mostly on sports properties, according to research by advertising metrics organization WARC.

However, despite the growth in sponsorship revenue, fewer than one in five advertisers are confident they can measure the return on their investment, according to WARC’s Global Ad Trends.

Brand spend on sponsorship is expected to rise 4.9% to reach US$65.8 billion worldwide this year.

North America makes up the greatest share of spend, accounting for 36.8%, or US$24.2 billion followed by Europe, accounting for 26.7% or US$17.6 billion, Asia-Pacific, accounting for 25.2% or US$16.6 billion, Latin America, accounting for 7.0% or US$4.6 billion, and finally the Middle East and Africa, accounting for just 4.3% or US$2.8 billion.

Sports is the key sponsorship opportunity, with the FIFA World Cup from Russia estimated to have attracted US$1.7 billion worth of deals. World Cup matches reached some 44% of the global population via TV.

According to WARC, generating brand awareness is the key goal of sponsorship spend. However, only 19% of sponsorship professionals are confident that they can actually measure the business value return of the sponsorships they undertake, and only 37% of practitioners have a standardised process for measuring sponsorship.

Social media is considered the leading activation channel for sponsorship by 83% of marketers, although the proportion of marketers activating sponsorship deals through experiential live events rose to 65% over the last year.

“As brands continue to jostle for a finite amount of consumer attention, the changing way in which media is consumed has led to the fragmentation of audiences. Yet sports generate an engaged, mass audience which sponsors can reach, before amplifying their campaigns via social media and experiential events,” said James McDonald, data editor, WARC.
“Sponsorships facilitate the upper part of the sales funnel – driving brand awareness and consideration – in much the same way as TV. This can present challenges, however, such as the knowledge gap between brand impact and sales impact.”