Sponsorship Services

Sponsorship Services Global Market Outlook

• Revenue in the Sponsorship Advertising Segment is projected to reach $0.8–0.9 billion in 2023 at a CAGR of 6.76 percent (2023–2027), resulting in a projected market volume of $1.16 billion by 2027. With a projected market volume of $262.30 million in 2023, most revenue is generated in China

• Sponsorship industry is experiencing a resurgence post-pandemic. The key drivers are the investment of cryptocurrency and sport betting brands, the emergence of hobbies as professional sport businesses, like disc golf or pickle ball, the introduction of NFTs and new streaming and content offerings, and the increasing exposure of women's sport

• New sponsorship entrants, new channels, and new fan necessities are the key drivers that will impact the value of sponsorship going forward

• The identification and measurement of these drivers are essential to unlocking growth for the global sports and entertainment marketing industry

Global Sponsorship Industry Trends

• The North American and European markets are mature, with industry-specific expertise and service execution expertise in areas, such as Sports and Entertainment Sponsorship

• As expectations increase for demonstration of return on investment for all communications spending, there has been (and will continue to be) an increased focus on measurement and evaluation, where most of the buyers are investing 5–7 percent of their budgets in measurement. However, measurement and evaluation remains a weakness of the industry overall, and buyers are looking for improved methods for Sponsorship to be viewed credibly by other functional departments, such as marketing, sales and financial

• Acquisitions or new strategic alliances and partnerships have been robust in the Latin America and Asia Pacific regions. The branding industry has been growing gradually, especially as consumer buying power has been rising in Mexico, Brazil, Chile, and Columbia

• Recent geographical expansions of agencies reflect a trend that indicates that buyers are looking at reducing roster size and want to have global contracts with incumbents

Global Sponsorship Drivers and Constraints

• The effectiveness of sponsorship & event promotions as a platform to gauge consumer engagement, and the ability to leverage retail promotions via sponsorships are the two major driving factors that steer advertisers towards sponsorship spend

Drivers

Rapid Use of Social Media:

• Increased adoption of social media is leading to increased spend in digital capabilities

Growth Driven by Content:

• The top buyers estimate that future growth is mainly derived from creating relevant content on traditional and digital mediums

Rise in Technology Adoption:

• The industry is experiencing changes in response to new technology, expansion of new methodologies, and greater use of data analytics

Increasing Budgets

• Client-side budgets decreased by an average of just 30–50 percent in 2020, but budgets are expected to increase rapidly during the next five years. This is mainly due to the major upcoming events that were cancelled in 2020

Constraints

Talent Crunch

• There is a growing need for diverse talent among resources to meet the Sponsorship agencies’ demand for skilled resources in digital mediums

• In North America, agencies are recruiting from rival firms, due to the lack of skilled resources in the industry. Mid-level talent is cited as a major concern in North American agencies

Increasing Prices

• Prices will continue to rise in the next 6 to 12 months by at least 8–15 percent in the US, 5–10 percent in the EU, 2–4 percent APAC with the likelihood that special training will be provided to employees to enhance their existing and new talents