Our President and CEO, Ian Malcolm recently published a guest blog for the World Federation of Advertisers (WFA) to discuss the key sponsorship trends brands should be focusing on heading into 2022.
The global COVID-19 pandemic will have a lasting impact on many aspects of our lives, including how we work, how we think and talk about mental health, how we value community.
It would be an over statement to say that the pandemic has changed sponsorship dramatically. For brands that were managing their sponsorship portfolios well pre-pandemic, we see a continuation of trends that were already in play before 2020. More focus on governance, activation, and measurement. We are also seeing brands being more choiceful in 2021 and into 2022 about the number of properties in their sponsorship portfolios, the kinds of properties they are investing in, and the assets they’re securing.
But change does bring change.
Sponsorship continues to the be the second largest marketing communications spend for most brands, second only to media, often accounting for between 11% and 18% of the total marketing budget. For brands that may not have been as focused on effective and efficient management of their sponsorship investments pre-pandemic, we are seeing brands contemplating more rigor and with higher expectations from the C-suite. Indeed, as we have been in the market talking about our consulting services we have heard more than one brand-side sponsorship marketer or marketing procurement professional share: “the way we were doing sponsorship didn’t pressure test very well through the pandemic.”
Reason for Optimism
Heading into 2022, brands are optimistic, more than ever, about what sponsorship can do in support of their brand and commercial objectives.
“Consumer response to the return of live engagement has us excited. People have been away from cultural experiences for such a long period of time, while there is some nervousness across different age groups, largely we see people flocking back to those live experiences. And they’re expecting brands to be there,” says Melissa Noakes, Head of Sponsorship and Events Marketing at Santander UK.
Sports, arts, culture, music properties provide consumers with the opportunity to come together for human scale experiences and through shared passion points.
IMI, a global consumer research firm, has been tracking consumer sentiment related to the pandemic since early 2020. Across thirty-nine country markets, intention to attend live events has been growing since lockdowns and public health restrictions first started to impact consumers. In June of 2021, intention averaged across the thirty-nine markets for live sports events was up 43%, community events up 63%, festivals up 43% from pre-pandemic levels.
We expect the ‘roaring twenties’ for sports, arts, culture, music and community properties to last well into 2024. Brands focused on adding value to those experiences for consumers will win.
While live events are returning, there is little question that virtual experiences as a means for how fans/attendees/supporters engage with properties will continue be more important moving forward. Even with talk of the emergence of a more dynamic metaverse, Mark Zuckerberg, CEO of Meta (formerly Facebook) has said publicly that it could be five to 10 years before key features of the metaverse become mainstream.
We don’t see virtual engagement replacing live experiences anytime soon, but the mix of virtual and live will continue to evolve. As a starting point, virtual experiences can enhance the consumer experience by bringing consumers closer to the game, the performance, the artist, and the athlete. Virtual experiences also enable consumers to better connect with a property when geography is a barrier to attending live, and where live may not be a significant part of the fan experience.
With interruption or cancellation of in-person events starting in the early months of 2020, brands have worked with their property partners around lost value, make goods and the creation of new assets.
This has brands thinking differently about what assets they need, including virtual engagement assets and digital assets.
“We’re rethinking and resetting,” says Eelco van der Noll, Head of Global Partnership and Events at AB InBev. “We’re looking to what really matters in sponsorship contracts, what we really need. We’re more focused than ever on assets that are of value to the consumer and provide utility for our brands in enhancing the consumer experience.”
The rethinking and the resetting around sponsorship includes how brands are thinking about activating in new ways.
At its core, sponsorship as a form of marketing pressure provides brands with associative benefits and borrowed imagery. Sponsorship provides an opportunity to be seen, but how a brand activates its sponsorships is what provides the opportunity to make impact.
The social awakening that ignited in 2020 and the more pressing focus on climate change has brands being more thoughtful about the role their sponsorships can play in demonstrating brand values and their commitments around ESG/DEI.
Sports teams and leagues, athletes, artists, festivals are using their platforms to speak about social justice, equality and equity, and audiences are listening.
Venues and events become proof points for carbon neutrality, waste minimization and water conservation commitments.
Sponsorships can provide a brand’s HR team with a valuable, uniting connection point for employees. Leveraging sponsorship in support of employment brand can drive employee pride and engender a sense of values alignment between employer and employee.
AB InBev is monetizing its sponsorship assets and in ways that bring utility and value to consumers. “We’re looking to create real business partnerships with our rights holders. Co-branded merchandise, NFTs, ticketed high-value-to-consumer fan fests that we own, packaged travel experiences to games, tournaments, and festivals. Driving topline revenue from sponsorship, which goes beyond sales rights, amplifies sponsorship return on investment (SROI) in a meaningful way for us.’
In 2022, as we emerge from the pandemic and in the years that follow, the emotional context that sponsorship delivers to brands will be more important than ever.
As brands push against commoditization, as they look to impact their sales and marketing funnel to drive measurable impact, they should be reviewing how they are selecting, activating, managing, and measuring their sponsorship investments.
By: Ian Malcolm