Asia-Pacific Set to Overtake Europe in Sponsorship Spend
According to the IEG Sponsorship Spending Report, brands will spend $60.2 billion on sponsorship in 2016, an increase of 4.7% compared to 2015.
As you would expect, North America remained the biggest spenders in 2015, however the battle for the second spot between Europe and Asia-Pacific is getting ever closer. Over the last 10 years, Asia/Pacific has closed the gap on Europe from $3.2 billion in 2006 to a projected $0.9 billion in 2016 - it is only a matter of time before Europe is overtaken as the second biggest sponsorship market.
WHY IS THE GAP CLOSING?
Emerging markets in sponsorship - increasing sponsorship spend by brands from emerging markets like China and India outside of their home markets is being identified as one of the key drivers. Examples of this include Chinese mobile phone producer Huawei who have signed a number of deals with leading football clubs in the UK, France, Spain and Germany and Indian multinational corporation Infosys who have signed a strategic technology partnership with the ATP.
Global fan bases - it’s not just brands looking to use sponsorship to break into the European markets, rights holders are also continually looking to monetise their global fan base through regional sponsorship deals. Manchester United were arguably at the forefront of this movement and the club now boast 16 regional partners in Asia, the Middle East and Africa. We are also starting to see sophisticated organisations such as City Football Group offering partnerships that offer a truly global solution.
Major events in Asia – finally, one has to factor in that the next three Olympic Games after Rio 2016 will be held in Asia (Pyeongchang, Tokyo, Beijing) which will undoubtedly drive sponsorship spend in the local regions. We are already as evidenced by the fact that Tokyo 2020 has already raised over $1.5 billion in sponsorship revnue through local partners.
SO WHAT NEXT?
With this background, we at GMR Marketing asked ourselves “what are the next emerging markets?” “Which brands could be the next to disrupt the current sponsorship landscape in the way that the likes of Emirates, Etihad and Qatar Airways did?”
PwC sees China, India, Indonesia and Mexico as the next big emerging markets with Nigeria, Saudi Arabia and the Philippines on the long-term radar. While some of the big brands from those markets are already involved in sponsorship (e.g Huawei, Haier, Tata Group) others like Chinese giants Alibaba and Wanda Group or telecommunication providers Airtel (India), Zain (Saudi Arabia) and America Movil (Mexcio) look poised to step up and enter a sponsorship landscape that has remained remarkably stable over the years.
FIFA and IOC partners
The origin of the global sponsors from the time that the IOC/FIFA first started selling central marketing rights in the 1980s to today (TOP VIII/Brazil 2014).
The IOC’s geographical makeup has remained virtually the same with US and Japanese brands dominating the TOP programme. FIFA’s portfolio has been a bit more varied due to some sponsors only signing up for one World Cup in their home market (e.g. South African telecommunications firm MTN sponsored the event in 2010 but was replaced by Brazilian counterpart Oi in 2014).
FIFA’s decision to change their approach to a regional model will allow more of these emerging brands to enter the market at a more affordable entry point and activate in their domestic market. Previously, FIFA’s third tier partnerships were only open to brands in the host market limiting the number of brands who could get involved in an official capacity.
Furthermore, when analysing the top sponsorship deals in 2015 (as per Sport Sponsorship Insider), 39 of the top 40 were done by brands from established sponsorship markets and almost 75% were domestic deals in the brands home market.
In 2016, we will continue to see new entrants look to use sponsorship as a platform to accelerate brand awareness and prestige while rights holders will provide more and more opportunites for brands from less established markets to engage.
This is not to suggest that established sponsor brands will disappear – in fact the evidence suggests that long standing sponsor brands continue to learn from their experiences and investments continue to grow steadily.
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