Reason for Optimism

Our President and CEO, Ian Malcolm recently published a guest blog post with the Association of Canadian Advertisers (ACA) looking at what sponsors are, or should be, considering as they move deeper into 2022. See the original post here. 

There is light at the end of the long COVID-19 pandemic tunnel.  

Heading further into 2022, brands are more optimistic than ever of what sponsorship can do in support of their measurable business and brand objectives.  

As we look forward, with COVID-19 eventually transitioning to endemic, sports, arts, culture, community, and music properties offer Canadians the opportunity to come together for human-scale experiences, leaving public health restrictions behind them.  

Latent Demand for Live 

IMI, the Canada-born global consumer research firm, has been tracking consumer sentiment related to the pandemic across thirty-nine country markets since early 2020. During that time, latent demand for live experiences has steadily grown. 

As of December 2021, Canadians’ intent to attend live festivals was 43% higher than it was pre-pandemic, intent to attend community events was 48% higher, and live concerts 32% higher.  

The “Roaring Twenties” phenomenon for sports, arts, culture, music, and community properties will be real and we expect it to last at least into 2024.  

New Ways to Connect 

The pandemic created the necessity for properties and sponsors to find new ways to connect with fans/attendees/patrons while live was either restricted or just not possible. This has included an acceleration in the prevalence, and acceptance, of virtual experiences. As the mix of virtual and live continues to evolve, virtual experiences can enhance the consumer experience by bringing consumers closer to the game, the performance, the artist, or the athlete.  

This has included an acceleration in the prevalence, and acceptance, of virtual experiences. As the mix of virtual and live continues to evolve, virtual experiences can enhance the consumer experience by bringing consumers closer to the game, the performance, the artist, and the athlete.  

There is no question that virtual will remain part of how properties connect with their community’s post-pandemic, but we do not see virtual supplanting live anytime soon.  Web3 will create new opportunities for properties to deliver value to sponsors and new ways for fans to engage. But even Mark Zuckerberg, CEO of Meta (formerly Facebook) has said that it will be five to 10 years before key features of the metaverse become mainstream.  

Managing Investment 

For most brands, sponsorship continues to be the second largest marketing communications spend, second only to media, often accounting for 11% to 18% of the total marketing budget. The pandemic has not dramatically changed sponsorship, but it has left a lasting impact.  

There are brands that have realized that the way they were managing their sponsorship investments did not pressure test very well during the pandemic. Those brands are either embracing change, or if not yet, their leadership may be insisting on it into 2022.  

Brands that were managing their sponsorship portfolios successfully before the pandemic have continued to do so, embracing trends that were already in play before 2020. Those trends include a stronger focus on governance, activation, and measurement.  

Reset, Rethink. 

With the interruption or cancellation of in-person events starting in the early months of 2020, sponsors have had to work with their property partners around lost value, make goods and the creation of new pandemic-friendly sponsorship assets. 

Change brings change and the best get better. The need to pivot, to reconsider, to reevaluate has brands thinking about their sponsorship portfolios differently. 

“Given we’re in a high-repertoire category, recruiting incremental consumers through our sponsorships is how we’ll continue to grow our brands,” says Andrew Oosterhuis, Vice President, Marketing at Labatt. “Labatt is embracing a variable-fee model, which will reward properties that deliver against increasing a fan base, while protecting its downside for when properties don’t. This allows us to no longer pay a full fee for average performance and will ensure our partnerships are driving incremental value. Similar to a media ROI, we are implementing a sponsorship ROI to ensure the mix of assets and fee are driving positive contribution for our business.” 

Coming into 2022, sponsors are looking more closely at the opportunity for emotional connection through their sponsorships; they view those sponsorships as tangible demonstrations of brand values and brand purpose.  

“Leveraging our sponsorships to create strong emotional connections between our brand and Canadians is more important than ever. We’ve all missed out on so much during the pandemic: human connection, social connection. As people come together again, Toyota will be there, and its essential that we be relevant to Canadians in how we participate. It’s important that we add value,” says Cyril Dimitris, Vice-President, Sales and Marketing at Toyota Canada.  

“As a Global sponsor of the IOC (International Olympic Committee) and the IPC (International Paralympic Committee), and as a domestic partner of the COC (Canada Olympic Committee) and the CPC (Canada Paralympic Committee) we’re going into our second pandemic-era Olympic and Paralympic Games sequence. Because of the pandemic, our athletes have had challenges that are over and above the normal challenges of training and competing. We’ve embraced the pandemic as an opportunity to support our athletes even more. And for Canadians, we believe celebrating the achievements is even more meaningful this year,’ says Dimitris.  

Kim Saunders, Vice-President, ESG Strategy and Community Impact is responsible for sponsorship at Canadian Tire Corporation. “We’re operating differently. We’re focused on using our partnerships to drive more social impact, anchoring to a deeper set of values. The assets we’re looking for (in our sponsorships) are those that drive community and deliver an impact message on top of the (brand) equity moments. We’ve flipped the stack. Impact comes first.”  

“Our leadership is interested in measuring for impact,” says Saunders. “Return on Investment and fiscal responsibility are table stakes, but we’re being tasked to quantify the impact [that] our partnerships are having on people and on communities”. 

In 2022, as we emerge from the global COVID-19 pandemic, Canadians are yearning to come together and to celebrate around their passion points, more than they have in generations. Sports, arts, music, cause, and community properties will be vehicles for those connections. Brands can be part of those experiences, to add value and to create impact.  

As they push against commoditization, as their consumers evolve, brands can use their sponsorships to create impact while driving results in their sales and marketing funnels. Sponsors should be considering how they are selecting, activating, managing, and measuring their sponsorship investments to take advantage of the Roaring Twenties ahead.  

By: Ian Malcolm

Reason for Optimism