Commercial sponsorship is now one of the fastest growing areas of commercial communication, out-performing most media advertising in terms of year-on-year growth in developed economies, according to a Dublin-based academic.
"Sponsorship in the US market outperformed sales promotion and media advertising although it is only 6 per cent of the market," Prof Tony Meenaghan of the Michael Smurfit Graduate School of Business told a seminar hosted by the Association of Advertisers in Ireland and the Irish Sponsorship Association yesterday.
Globally, $17.4 billion (€20.29 billion) is spent annually on sponsorship, representing 8.5 per cent of global advertising spend. This figure is expected to rise to $50 billion by 2010. In the US, sponsorship has increased from $1 billion in 1986 to $9 billion today. The UK market has seen a 200-fold increase from £4 million in 1970 to £832 million in 2000, Prof Meenaghan said.
"While it is still a relatively small percentage compared to advertising, that's huge growth. But it is interesting that people are shifting out of mainstream media advertising because of the cost of production and the cost of buying media space. They're getting reduced efficiency in their spending." The result is that many organisations are turning to sponsorship.
"Sponsorship is very good at driving imagery," Prof Meenaghan added. "I think sponsorship engages consumers in a slightly different way because you're dealing with something with which they're emotionally attached. Guinness didn't need brand awareness when they began sponsoring the hurling championship but what it did was anchor its image to something that was essentially Irish."
In Ireland, the market for sponsorship is estimated at more than £40 million. Increasingly, it is seen as a commercial investment intended to achieve corporate and marketing objectives on behalf of the sponsor, with practitioners applying more stringent commercial rationale.
According to Ms Adrienne Regan, head of sponsorship at Eircom, the company's flotation brought a changed perspective on advertising. "We needed a complete change of emphasis and to focus on a small number of high profile, national sponsorships to support the positioning of the Eircom brand in the market place," she said.
Eircom receives up to 1,200 sponsorship proposals each year and now uses seven criteria to select events or organisations to sponsor: an ability to support the Eircom brand position; an ability to reach a national audience; the scale of the media coverage; brandability; overall cost of sponsorship; an assessment of the sponsored organisation; and the potential of the sponsorship and how it might be leveraged.
