Sports miss out on $18bn despite growth year for sponsorship spend
North America accounts for 38.8% of the $46bn spent globally by brands on sports sponsorship in 2019, but properties are significantly under-exploiting their sponsorship businesses according to Two Circles.
Through its new Partnerships Engine product, the agency’s industry-leading data platform, Two Circles found that collectively, sports properties’ sponsorship assets are worth $64bn globally. However, due to unsold inventory, unreported engagement and outdated asset-packaging, this means properties will miss out on $18bn in unrealized revenue in 2019.
Two Circles is WPP’s sports property-facing agency globally, and sits within GroupM, the world’s largest media buyer. The agency helps the biggest properties in sports use data to improve fan experiences and increase revenue across game day, sponsorship and media business lines.
Commenting on the unrealized revenue opportunity, Gareth Balch, Two Circles CEO, said: “Most properties continue to package and sell sponsorship the same way they did 20 years ago – offering brand exposure through broadcast coverage as the main benefit for brands.
“Globally we’re spending more time consuming entertainment on digital platforms – and we consistently see a disparity between what brands need to reach an audience effectively and quantifiably, and what digital assets sports properties are able to offer in their sponsorship packages.”
Brand Spend on Sports Sponsorship (2014-2024)
Sports properties have access to at-scale and engaged audiences through a range of digital channels. As more properties package these digital assets into sponsorship propositions – and use data-driven evaluation tools to show brands the tangible impact their content is having on audiences in real-time – Two Circles predicts spend on sponsorship will increase by 6% on average year-on-year between 2020 and 2024 to hit $62bn overall by the end of the period.
Balch added: “Properties are adapting to this new world and we predict a sports sponsorship correction: by embracing the power of data and digital to create sponsorship assets that better satisfy the objectives of brands, properties will realize the true value of their sponsorship businesses. This will drive greater spend from brands in all sectors, not just the ‘traditional’ sectors for sport such as alcohol, fast food and automotive.”
Two Circles’ new Sponsorship Engine measures the value and impact delivered to sponsors across a property’s owned and earned channels, providing unrivalled insight into what sponsorship assets are worth and how they should be packaged.
Note: ‘Sports sponsorship’ is defined as the relationship between a sports rights-holder (league, team, tournament, federation, governing body, athlete or venue) and a company through which the company receives marketing collateral in return for either financial or business services