ICYMI, the 11th Annual Canadian Sponsorship Landscape Study (CSLS) came out earlier this year. In addition to some standard metrics around size, growth, and activation techniques, the report includes some surprising – and concerning – findings that highlight issues within the industry. Among them:
- Sponsors and agencies do not appear to be aligned when it comes to business results.
- Bias plays a significant part in sponsorship decision-making.
- When it comes to future opportunities, sponsors say measurement is a big one, while agencies are more focused on promotions and activations.
Read on for a quick summary of the report – including more details on the sponsor/agency conundrum.
Sponsorship nears $3B
Sponsorship is big business in Canada, and it’s growing. Spend in 2016 was almost $3B, up 12% compared to 2015. That $3B is made up of $2B in rights fees and $1B in activation costs.
The top 3 objectives for CSLS respondents were engagement (36%), brand building (29%) and awareness (22%), but when it comes to results, sponsors and their agencies have very different perspectives on what tactics work best.
The disconnect between sponsors and their agencies
One key – and concerning – finding of the report is the difference in opinion between the sponsors and their agencies about which tactics drive the best business results.
Sponsors claim the best results come from Hosting/Hospitality efforts (42%), PR (35%) and Advertising (32%), while Agencies overwhelmingly put Branded Content at the top of their list (65%).
This begs the question: why are these partners not aligned on business objectives?
In the end, the most money went to advertising
There are countless ways to activate a sponsorship, with sponsors using branded content, hospitality, social media, sampling and PR, but the Number 1 activation tool in 2016 was advertising, up significantly from the prior year. This dramatic increase in sponsorship-related ad spend no doubt reflects sponsors’ need to optimize their sponsorship through reach.
The balance of data & bias in decision making
How are sponsorship decisions being made? The number one factor is consumer passions/interests (33% of sponsors’ decisions), but there are also some conflicting trends:
- Decisions in 2017 were more likely to be based on internal data/analysis (14%, up from 9% in 2016)
- But at the same time, decisions made on “bias” almost doubled, jumping from 10% of sponsorship decisions to 18%.
Moving forward: Concerns and Opportunities
All parties agree that “demonstrating ROI” is the Number 1 concern when engaging with sponsorships; that’s probably why sponsors say “measurement” is one of their two top ‘opportunities’ within the sponsorship field. That said, their agencies are much less interested in measurement – they see more upside in activation and promotions.
Once again, sponsors and agencies are not terribly aligned. Fixing that is perhaps the biggest opportunity of them all.
To see the full report, click here: www.sponsorshiplandscape.ca