If you think there are too many ads on TV, blame Sigourney Weaver. It is not entirely her fault, because she was only two years old when her dad, as president of NBC, came up with the idea to sell short ad slots to multiple companies during a single TV show. Before Pat Weaver invented this new system, advertisers paid agencies to create entire shows – which they would sponsor – and the show packaged with the sponsorship was then sold to a TV network.
In the seventy years since the change, advertising has gotten more and more transactional – particularly digital advertising. The real time ad auction/placement system and trackability of digital advertising has turned advertising into a rapid experimentation video game. Advertisers can design a campaign in the morning, put it into the field at lunch time and know if it worked by the end of the day. Good results, crank up the volume, bad results, kill it and try another tomorrow. Advertisers that want a spot during the Super Bowl have to plan a bit more in advance, but even then the commitment ends on game day.
The pre-Weaver system does still exist though, and it is still called sponsorship. Unlike the short and getting shorter commitments of advertising, sponsorships are long term relationships and getting longer. The modern sponsorships exist mostly in sports and philanthropy.
A company that wants its name on a stadium, may have to get involved in the building of the stadium, and even if they come along after – they make a multi-decade commitment. The same goes for hospital wings, university campus buildings and symphony halls. With a rare exception for creeps like the Sacklers, building naming rights last a long time.
Some sporting event sponsorships are legendary. IBM has sponsored the USTA’s US Open for 30 years. Cadillac sponsored the Masters golf tournament for forty years before Mercedes took over (in 2008). And those are just the short ones. Rolex and Wimbledon have been together for 45 years, Coke and the Olympics for 95 years, and if you want one in the triple digits… its Wimbledon again with Slazenger tennis balls at 120 years and counting.
These observations of longer sponsorships are supported by research data recently published by KORE in its State of the Industry report. The report shows global sponsorship spending was $77 billion in 2022, (an increase of 23% over 2019) while the number of sponsorships was down 17%. Fewer deals, but the deals were big enough that the global total still increased. The average deal size was $326K, over a duration of 3.3 years. Fewer deals, bigger deals, longer deals.
Sponsors are using social media to measure the performance of their sponsorships. By this gauge, KORE has calculated the top five brands by sponsorship value to be Nike, Adidas, Emirates, Puma, and Red Bull.
All brands with serious long term sponsorship investments. It is great to see that even as advertising gets more transactional and measurable, brands that have the strength to pursue long term strategies are looking to sponsorships more than ever.
Links and Resources
https://koresoftware.com/insights/white-paper-2022-23-kore-state-of-the-industry/
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