LONDON: Global ad spend on sports sponsorships is predicted to total $48.4 billion this year, up 5% and the strongest rise in a decade, according to a new report from marketing intelligence firm WARC.
Sports Sponsorship Investment, the latest global advertising trends report from WARC Data, notes how recent market growth has been buoyed by record investment ahead of the 2020 Tokyo Olympics.
The 2020 Summer Olympics is expected to garner $5.94 billion in sponsorship dollars, with $1.95 billion coming from Olympic partners including Coca-Cola and P&G, double the amount sponsors spent at the previous games.
The report also predicts that local sponsors including Canon, Asahi and Fujitsu will spend $3.33 billion, four times the amount spent during Rio’s 2016 games.
According to the report, Asian investment has been lifted by the upcoming Olympics, Chinese brands’ association with the 2018 FIFA World Cup, and the PyeongChang Winter Olympics, which drew $649m from domestic sponsors in 2018.
Further, WARC Data analysis of World Rugby financial filings shows sponsorship deals of the last Rugby World Cup, held in Japan in 2019, are likely to have topped $50m for the first time.
In India, IPL cricket sponsorships were worth $48m to brands in the 2019 season, up from the $44m invested during the previous season, the report estimates.
The automotive sector spends the most in Asia at $644m. Financial services, apparel and telecoms follow.
The report also forecasts that brand investment in esports will total $795 million this year, up 23.1%, with $584 million going to sponsorships and $211 million to ad breaks.
Cyclical events, such as the Olympic Games, will be strong drivers of sports marketing activity this year, according to WARC’s forecast. US broadcaster NBC estimated that the Summer Olympics in Tokyo will set a record by surpassing the $1.2 billion in TV commercials it sold during 2016 games in Rio de Janeiro, per Front Office Sports. The company has already booked $1 billion in ad revenue commitments and the games are still almost six months away. Airbnb, Coca-Cola, Samsung, Visa, P&G and Panasonic are among advertisers for the event, per The Drum.
The WARC report also predicts that sports associations and their games will generate record spends in 2020, including UEFA EURO 2020 tournament, English Premier League (EPL), National Football League (NFL), National Basketball Association (NBA), Major League Baseball (MLB) and Indian Premier League cricket (IPL).
North America, which commands 82.5% of spend in this area, experienced a compound annual growth rate of 4.6% since 2011, per the WARC study. This year, ad spend will reach $18.8 billion alone in the region. Marketers in the U.S. are largely invested in partnerships with the NFL, NBA and MLB. NFL sponsorship is predicted to reach $1.53 billion in 2020, up 4.9% from 2019. MLB spend will reach $1.05 billion, up 5.6% and NBA ads are predicted to reach $1.39bn for the 2020/21 season up 7.1%, per the WARC study.
James McDonald, managing editor, WARC Data, and author of the research, notes: “Legacy rights holders are set to benefit from a windfall in sponsorship revenue in 2020, as brands continue to vie for association with properties that provide access to engaged and enthused audiences at scale.
“E-sports is offering a new avenue to hard-to-reach audiences for brands, ones which are young, affluent, and more likely to take steps to block advertising online. It also presents new revenue streams for media owners; Tencent, Amazon, Google and Facebook all have a stake at play.”
