Nielsen Sports published a report on the evolution of sponsorship value in 2021.
Among Nielsen customers, on average 15% of the brand’s marketing budgets are allocated to sponsorship but are often not measured against direct sales.
The report found that live and virtual sports experiences are merging. Even as fans gradually return to live events, these virtual upgrades will be retained, with additional investments in broadcast innovations expected.
According to the Nielsen Fan Insights report, 53% of fans say they are more likely to consider brands that improve the way live sports are viewed in the home. Rights holders who actively strategize and plan for a hybrid world of merged live and virtual experiences will thrive in this new era.
As audiences spend more time at home, media consumption habits change. Digital channels, ranging from streaming platforms to social media, are increasing their share of the sports media mix, requiring consistent metrics and methodologies to measure the value of sponsorship across all types of media.
As the use of streaming platforms, social media, mobile devices and other technologies continues to grow, their role in sponsorship deals and asset creation will become more prominent. Considering the number of different channels, the increase in consumption and the various combinations of brands, platforms, target audience, content, a unifying measurement system is needed. This will ensure value growth, help reduce the risk of sponsorship investments, and result in more sustainable sponsorship strategies.
The role of esport within the sports sponsorship offer is another development. There was significant growth in the number of esports viewers in 2020, with 16% of people surveyed globally in Nielsen’s Esports Fan Insights report indicating that they were watching more competitive esports events.
There is also an increased interest in video and mobile games. Esports sponsorship revenue has been growing rapidly for years – increasing at a compound annual growth rate (CAGR) of nearly 32% between 2014 and 2019; further growth is expected with esports revenue expected to reach US $ 824 million by 2025.
Another key trend from 2020 that Nielsen Sports says will continue is the voice of athletes and brands representing communities of the future. Over the next three to five years, Nielsen Sports predicted that rights holders with a genuine sustainability agenda can expect an 11% increase in their sponsorship revenue.
Of the top 20 global spend-spend sponsorship brands in 2019, the vast majority have made an active shift in their sponsorship and advertising messaging in the past five years. However, it is athletes rather than sports organizations that set the agenda and increasingly feel empowered to promote, highlight and campaign on social issues and causes close to their hearts. The report shows that “posts” generate 63% more engagement for brands.
Research shows that 95% of athletes with over five million Instagram followers championed social media causes in 2020, collectively generating US $ 314 million in quality-indexed media value.
This highlights the potential benefits for brands who partner with athletes willing to take a stand or voice their opinion on a cause that resonates with fans. The series of major world events on the calendar over the next two years, including the Olympic Games and the FIFA World Cup, are platforms on which athletes can protest or highlight causes.
Research organization WARC predicted that global advertising spending in 2020 would fall 8.1% – about US $ 49.6 billion – to $ 563 billion (WARC Global Advertising Trends Report). Inevitably, falling ad spend has a ripple effect on the revenue streams of sponsors and rights holders. As a result, several new and innovative sponsorship models are evaluated and tested.