Sponsorship Trends And Predictions

Esports moves mainstream: Last year, we predicted that more brands would follow the likes of Mastercard into esports. Sure enough, Nike signed its first esports deal in February 2019 with China’s League of Legends Pro League (this incidentally also fits under our Asia heading below). As a sector, esports has been keen to reach out to non-endemic sponsors – and data from Nielsen shows that this really started to happen in 2018/19. Car brands in particular seem to embracing the sector, with Honda, Nissan and Kia joining BMW. 2020 is likely to see further activity – especially now that esports companies are attempting to address concerns about audience measurement. In 2020, perhaps we’ll see examples of brands seeking to join the dots between traditional sport and esports in terms of activation.

Sustainability in sponsorship: 2018 saw the issue of single use plastic suddenly rise to prominence – but 2019 was even more dynamic in terms of environmental activism. Extinction Rebellion, the Brazilian and Amazonian forest fires and, of course, Greta, have made sure the survival of the planet has been front of mind throughout the year. The BBC and David Attenborough also shifted away from their relatively neutral stance on the environment in 2019. We predicted that brands would work harder to promote their green credentials to customers – and this has proven to be the case – though not necessarily in the context of sponsorship. The most obvious example is the retailers’ war on single use plastic, though an increasing number of polluters are seeking to up their game on recycling and through schemes that aim to deliver carbon neutrality. At time of writing, the major impact of the environmental crisis on sponsorship has been the pressure in arts institutions to cut ties with BP. An obvious question is whether this kind of activism will increase in 2020. One thing for brands to think about is this piece of research which suggests that the overwhelming majority of consumers are looking for ethical leadership from brands.

Sponsorship sectors under scrutiny: 2019 saw continued pressure for regulation of the UK betting industry’s sponsorship arrangements. At the start of 2019, we suggested that rights holders themselves might start to hesitate about working with betting sponsors as a way of protecting their reputation – but that clearly wasn’t the case as this Guardian article demonstrates. Interestingly, however, 2019 also saw GVC Holdings, the owner of Ladbrokes and Coral, argue in favour of banning football shirt sponsorship – with CEO Kenny Alexander saying it was “high time that the industry did more to protect its customers from potential harm.” Current estimates put the number of problem gamblers in the UK at around 430,000. The new government currently has a lot on its plate (Brexit, Iran, etc.,), so it’s not clear whether they will choose to act on this issue in 2020. Given the Conservative Party’s inherent dislike of the ‘Nanny State’, a similar lack of intervention is likely in other potentially problematic areas of sponsorship such as alcohol, fast food, fizzy drinks and oil. 

2019 was also noteworthy for the battle between the World Health Organisation (WHO) and F1 over tobacco companies being allowed to sponsor F1 teams, as long as they don't promote cigarettes. McClaren is reported to be expanding its partnership with British American Tobacco ahead of the 2020 season.

Attention on Asia #1: At the start of 2019, we said Chinese brands “are becoming ever more prominent on the global scene and this will continue to play into the sponsorship sector”. This proved to be the case – though there are a couple of provisos. The first is that the threat of a trade war between the US and China has made the question of what to sponsor and where to activate more complex for Chinese firms. The second is the controversy around tech firm Huawei, which stands accused of spying on behalf of the Chinese government. Notwithstanding these issues, 2019 saw deals between Southampton FC and LD Sports and Manchester United and Ali Baba. There were also heavy rumours linking Haier to Manchester United, though a possible £70m deal has been denied by the Chinese firm. Probably the most interesting story relating to China right now is the country’s ferocious reaction to sporting figures that criticise its domestic policies. The best examples relate to Mezut Ozil’s comments on the situation with Uighur Moslems in China and Houston Rockets general manager Daryl Morey’s support for the Hong Kong Protesters. In both cases, these comments have had commercial repercussions for the teams and leagues behind the individuals. 2020 will see sports stakeholders trying to find a balance between freedom of expression and the need to protect their commercial interests in China.

Attention on Asia #2: Japan won a lot of fans when it hosted the Rugby World Cup in late 2019 (with the host country performing well both on and off the field). Expect a repeat this summer when capital city Tokyo hosts the Summer Olympic Games. Also prepare for some interesting activations from Airbnb, which signed up as an IOC top tier sponsor in November 2019. Given some of our observations above, it’s worth noting that Channel 4 has signed up Toyota and BP as headline sponsors of its Tokyo 2020 Paralympics coverage. Clearly the broadcaster has no qualms about the protests taking place regarding BP’s involvement in arts sponsorship. Maybe one message here is that any sponsorship money that is driven out of the arts will simply show up in a different form somewhere else. The Olympics take place in July/August, but expect activations to begin in early Spring.

Women’s sporting breakthrough: One area that grew faster than we expected was women’s sport – with the FIFA Women’s World Cup one of the major highlights of the sporting year. This has led a growing number of commentators to suggest women’s sport is at a tipping point. Brands that have recognised the opportunity presented by women’s sport include Visa, which is currently engaged in a wide range of activities around women’s football. This includes partnerships with FIFA, the Olympics and UEFA. In 2019, for example, the financial services brand signed a seven-year deal with UEFA to sponsor all of its women’s competitions. One trend to look out for in 2020 is whether more women’s sports properties will be ‘unbundled’ from men’s properties. In other words, will they be marketed and sold separately, as opposed to being included in an umbrella deal? Another thing to watch out for is whether any more female sports stars can emulate Fallon Sherrock’s achievement in darts. Maybe this will be the year that a woman wins the Aintree Grand National, for example.

Stories vs Data: Last year, we talked about the importance of content and creativity in sponsorship. We’re still big believers in this thesis which is why we’ve launched a dedicated craft category for the next edition of the UKSA Awards. 2020, however, is likely to see the sponsorship industry double down on the potential of AI and data. With GDPR up and running and the lessons of the Cambridge Analytica/Facebook scandal digested, it’s now time to focus on the positive implications of data. Sponsorship consultancy Two Circles, for example, reckons that rights holders have been under-exploiting their sponsorship businesses by around £12bn a year on average since 2014. As more rights-holders package digital assets into sponsorship propositions, and use data-driven evaluation tools to show brands the tangible impact their content is having on audiences in real-time, Two Circles predicts spend on sponsorship will increase by six percent year-on-year between 2020 and 2024 to hit £48bn overall by the end of the period.

Political Divisions - Choose Your Side: Last year we talked about the fact that polarised politics are a challenge for brands. This year, things will be much the same, notwithstanding Boris Johnson’s decisive victory at the polls. As in 2019, brands will have to make judgement calls about how far they bring social messaging into their marketing. Nike experienced a critical backlash when it signed up the NFL’s kneeling star Colin Kaepernick – but it hasn’t suffered commercially as a result (far from it). Likewise Gillette – which spent 2019 exhorting men to become better versions of themselves. Again, the razor brand doesn’t seem to have suffered despite aggravating some of its audience. 2020 is likely to see a renewed wave of brands shouting about their values. The ones that succeed will be authentic; the ones that suffer will be those that are guilty of purpose washing.

Soccer is not the only sport: Football continues to dominate sponsorship, with the English Premier League one of the best revenue-generators. Euro 2020 is likely to cement soccer’s dominance, however the rapid rise of esports is proof that football is not the only game in town. Among traditional sports, 2020 will see the usual array of landmark events in cricket, rugby union, tennis and horse racing. Special events to look out for include golf’s 2020 Ryder Cup, which has BMW and Aon among its sponsors. The biggest event of the year, however, will be the Tokyo Olympics – which is introducing five new disciplines – Baseball/softball, karate, skateboarding, surfing and sport climbing. The strong emphasis on action sports is a reminder that a) youth audiences are not all indoors watching esports and b) it’s a great opportunity for sponsors to engage with audiences. IEG did some interesting research in this area a few years back – but you’d expect some new sponsors to take advantage of the action sports bump that is likely to follow Tokyo 2020. Baseball is on the list because it is such as passion for Japan and nearby Korea. But could Tokyo 2020 also provide some impetus for the sport to break out of its traditional markets – perhaps establishing itself as a truly global discipline? If none of that sounds of any interest, some observers reckon grassroots sport will come into its own as an alternative to inflated elite prices.

Influencer endorsements go mainstream: Last year, we pointed to the fact that social media stars are moving mainstream. Increasingly, we expect to brands to leverage influencer appeal across traditional channels like TV ads and sponsorship. This makes sense when you look at the levels of fan engagement influencers can achieve. In 2020, brands may also explore the relative merits of working with an ‘influencer’ as opposed to a ‘celebrity’. As with esports, influencer/brand partnerships will start to develop a clearer structure – with long-term partnerships replacing one-off tactical promotions.

Don’t forget, the entry process for the 2020 UK Sponsorship Awards is now live and runs until its January 17 deadline. The 26th edition of the Awards includes many of its usual categories (arts, sport, media etc), and also has some new innovations. The industry-leading event will be held in the London Marriott Hotel Grosvenor Square on March 24, 2020 and typically draws around 500 sponsorship industry decision-makers.