Despite the economic slowdown, Irish companies are set to increase their spending on high-profile sponsorship deals by another 5 per cent this year, a new report has predicted.

Sport remains the major sponsorship vehicle for most companies, with this year's Special Olympics and the Rugby World Cup in Australia described as the best sponsorship opportunities by the authors Amárach Consulting.

However, the report warns companies that working with individual sports stars carries risks. It cites the experience of 7 Up, which worked with Roy Keane last year, and how the events in Saipan had a negative impact on the deal.

However, the report finds general agreement among marketers that golf stars are "ideal" for sponsorship deals because of their professionalism.

The report - which is based on in-depth interviews with 12 leading brand managers - says the Roy Keane/Saipan episode has left some brand managers cautious about getting individuals to endorse products, but it points to Allianz's association with Ryder Cup golfer Paul McGinley as an example of a successful arrangement.

The sponsorship deals mentioned most frequently by brand managers are the Guinness All-Ireland Hurling Championships and the Heineken European Rugby Cup. Guinness is praised for the way it uses the hurling championships "in a 360-degree way".

Five of the seven most frequently mentioned sponsorship arrangements involve alcohol brands, the report notes.

It says while companies will spend more this year, they will expect to get more from their investment.

"Every level of possible benefit is being sought out of sponsorship deals since many sponsor decision-makers are fighting to maintain their budget and justifying every cent they spend."

The report finds sponsorships of TV programmes to be beneficial to most companies that spend money in this area. The Renault sponsorship of the Late Late Show is cited as an example of where a brand has benefited enormously.

The report says respondents were also impressed by O2's involvement with the programme You're A Star. "This is good example of a multi-dimensional piece of activity which includes a revenue stream for the company, while delivering on brand-building objectives."

The report notes that companies are becoming increasingly interested in sponsorship deals in the area of corporate social responsibility. These are deals that highlight the work done by firms in the social and community sectors. The report says brand managers praise Bank of Ireland's sponsorship of the Special Olympics and AIB's Better Ireland awards.

The report says companies are becoming far more adept at pricing events and making sure they get value for money.

One respondent claims owners of events, known as "rights-holders", are setting totally unrealistic prices.

The report says when rights-holders are told the company may be looking at other events, they soon bring their prices down.

It says "conflict is likely" between sponsors and rights- holders over price.