||Sports Sponsorships Due for Record Surge Says New Forecast
IEG: Sports Spending to Jump 6% to $13.79 Billion This Year
Advertisers are putting on their game faces, poised to spend a record $13.79 billion on sports sponsorships in North America during 2013, according to a new forecast by IEG, a sponsorship, research and consulting firm owned by WPP.
The surge, which would mark a 6% jump from last year's $13.01 billion, will help boost overall sponsorship spending by 5.5% to $19.94 billion, according to the forecast, which includes spending on entertainment, causes, arts, festivals, associations and other properties. And that's saying something, considering that overall ad spending in the U.S. is expected to eke out just a 2.3% increase in 2013, down from the 3.9% increase in 2012, according to an average of spending forecasts compiled by Ad Age.
The sports jump is all the more remarkable considering that 2013 is bereft of big events such as the World Cup or Olympics. But the bottom line is that in the DVR age, marketers continue to be drawn to live events, whether it's activating massive league deals -- such as National Football League partnerships -- or individual team sponsorships.
Consider that the title sponsorship for the championship game of college football's new four-team playoff system in 2014 is expected to fetch $35 million, according to ImageTrack, a new sponsorship monitoring service by IEG and Kantar Media. That price tag would represent the highest rights fees ever paid for a collegiate sports property, far exceeding the $15 million to $20 million that Discover was estimated to have paid to sponsor this year's championship game between Notre Dame and Alabama.
But as they spend more, marketers are demanding more, often making sponsorships part of an integrated campaign that includes multiple channels such as digital. The upshot is that the deals -- which used to be negotiated between a marketer and a team or a league -- now involve a multitude of players, including media buyers and TV execs. In the past, "it kind of lived off to the side," said Jim Andrews, VP-content strategy for IEG. But now "you've got the senior advertising people, brand people, the media buyers in there who are now saying, 'We want to look at that kind of stuff.' The interest has really risen because they've seen that these type of partnerships really do make a big difference as part of an integrated marketing platform."
Mr. Andrews pointed to Coca-Cola's evolution as an Olympics sponsor as an example. During the 2008 Beijing Games, the marketer produced three themed ads and six posters. But for London 2012, the company created more than 120 pieces of content, including mobile apps, documentary films, TV shows and more, according to IEG. The "Move to the Beat" campaign cracked Ad Age's viral video chart last May.
The demand for sports deals is apparent on the PGA Tour, which has sold out all but one of its tournament title sponsorships for 2013, Sports Business Journal reported this week. When Humana inked an eight-year sponsorship of a PGA Tour event -- naming it the Humana Challenge beginning with last January's tournament -- the health insurer used it to push its revamped corporate brand, which emphasizes lifelong health and well-being. At the tournament, which was formerly called the Bob Hope Classic, Humana overhauled the food, adding several healthier, locally sourced items. The company also set up "Humana Walkit" stations that distributed more than 12,000 pedometers during the tournament, which is held in the Coachella Valley near Palm Springs, Calif. The TV spot by agency RAPP called "Walk Like a Pro," which ran on the Golf Channel, continued the theme.
The focus on big national and global sponsorships could be hurting local sponsorships, which include single-market events and organizations such as festivals, museums, and arts and cultural organizations, which have struggled to keep pace, Mr. Andrews said. The reason is that local properties often don't have the resources to prove return on investment. Sponsors of the NFL or even a national charity are "getting reports back about exactly what I'm getting there," Mr. Andrews said. But it's "a lot harder for a smaller, local organization to deliver against that."
(Source: Advertising Age, 01/09/13)
What's In It For You:
"Non-Traditional" isn't non-traditional anymore. And the traditional advertising decision-makers are turning up in the "non-traditional" decision-making. Advertisers of all sizes are looking aggressively for opportunities to connect with consumers beyond traditional channels and they don't expect it to be "value added." (Although they will take it if you're foolish enough to offer it.) Present all of your station's opportunities and assets for 2013. Let your client choose what they want "a la carte" and price each instance to connect with the consumers that interact with your station accordingly. Not only will your clients be more satisfied, it sure beats trying to sell every promotion or event at a mere 4-6 weeks out!