Sports Sponsorship Sectors to Watch in 2024
Predicting the direction of travel in the sports sponsorship industry can be a tricky proposition at the best of times. Marketing budgets and marketing decision-makers at brands change with regularity and the whims of individuals cannot be predicted.
However, sports sponsorship has long proven to be a resilient industry, and even at the height of the pandemic, new deals were being signed.
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While the data suggests that 2023 has been a more challenging year in terms of deals signed and sponsorship spending, several factors have driven this downturn – namely inflation, the cost-of-living crisis, and geopolitical instability which have created a perfect storm for marketers.
In 2023, we saw traditional sponsorship sectors such as financial services, automotive, and beverages all reduce the volume of deals they were signing compared to 2022.
This suggests that considering the challenges presented above, as well as the continued recovery from the economic impact of the COVID-19 pandemic, brands are re-evaluating their marketing positions and committing to far fewer deals in 2023, with a 10.3% reduction in deal volume compared to 2022.
However, while deal volume is down in 2023, there are encouraging signs from several sectors in terms of sponsorship spend. The clothing and accessories sector increased spending by over 27%, while the travel and tourism industry also saw a 25.6% increase in spending year to year.
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By GlobalDataWhile the clothing and accessories sector is largely linked to kit deals, travel and tourism is responding to the pain caused by the pandemic where the industry was decimated to sign high-profile deals to entice tourists back to a variety of destinations.
According to the GlobalData Sport Intelligence Centre, seven sectors increased spending this year. In addition to clothing and accessories and travel and tourism, the beverages, aerospace and defence, paper and packaging, entertainment and leisure, and restaurant sectors all increased their spending on sports sponsorship, leading to an overall increase in spending of 0.5% annually.
Of these sectors, the largest increase came from the entertainment and leisure industry which increased spending by over 70% compared to 2022.
The largest decrease in sector spend came from the consumer goods market, which saw a 21% reduction in spending compared to 2022 – perhaps reflecting the reality of inflation and the cost-of-living crisis in real terms – while the ‘reliable’ sponsorship sector of financial services reduced spending by 15.3%.
The automotive sector, meanwhile, saw a tiny drop of 0.01% year on year, suggesting some stability for this sector after overcoming a tough few years.
So, what does this mean for 2024? As mentioned earlier, the sponsorship sector is impacted by factors outside of its control, but with the rate of inflation falling globally, this should hopefully lead to an easing of the cost-of-living crisis.
What doesn’t seem to be changing anytime soon is the geopolitical situation, with the crisis in the Middle East adding to the uncertainty that the Ukraine situation continues to present.
That said, high-spending sectors are likely to be able to reassert themselves in 2024. While spending on sponsorship from the technology industry fell in 2023 by 9.3%, given the advances in AI and the need for greater cybersecurity solutions, partnerships in this area should be a key consideration, which is evident by the new front-of-shirt partnership between Snapdragon and Manchester United.
The entertainment and leisure sector should also continue its growth given the potential crossover opportunities between sport and entertainment, while the logistics & delivery and retail sectors could again be ripe for partnership opportunities as domestic spending pressures ease.
With the logistics sector having seen a small decrease in spending in 2023, down 1.74% with retail down 1.8%, both sectors should be explored by the sports industry as having potential for significant new partnerships.
With the Paris 2024 Olympics driving significant viewership alongside various continental soccer tournaments such as the Africa Cup of Nations, Copa America, and Euro 2024, the packed sporting calendar will present significant commercial opportunities for sponsors and rightsholders.
