Sponsorship spending to hit $66 billion worldwide, but most firms don't know if it really works
Companies around the world are set to spend $65.8 billion on sponsorship deals in 2018, but few businesses know whether it actually works.
Money spent on deals is set to rise 4.9 percent this year, with most of the cash going on sports, according to data by the World Advertising Research Center (WARC).
However, only 19 percent of sponsorship professionals say they can measure return on investment, in research by agency MKTG and quoted by WARC. The agency surveyed 500 executives globally and also found that 37 percent of people have a standard way to measure the impact of sponsorship, with digital and social media analysis popular methods.
North America is set to take the greatest share of sponsorship money from brands, with $24.2 billion; followed by Europe with $17.6 billion; Asia-Pacific with $16.6 billion; Latin America with $4.6 billion; and the Middle East and Africa with $2.8 billion. These figures cover the right to be associated with a sports team, but not additional spend such as advertising to promote, or "activate," the partnership.
Sport still offers "large, engaged, multi-screen audiences," according to WARC, with 44 percent of people watching this year's World Cup on television.
Putting a logo on a sports team's shirt or advertising on stadium hoardings can improve people's recognition of that company, with 73 percent of those surveyed by MKTG saying "brand awareness" is the main point of sponsorship.
Brands spend millions on partnership deals with sports properties. At the 2014 Winter Olympics in Sochi, for example, official sponsors forked out an average of $25.8 million each.
This year's World Cup in Russia made around $1.7 billion in sponsorship, although three large companies — Continental, Johnson & Johnson and Castrol — opted not to renew their deals in 2015 after alleged corruption at the top of FIFA.
Sponsorship of Formula One motor racing is set to change, after the sport was opened up to betting and gambling brands in a $100 million deal announced last week.