Sponsorship Spending Revised, Growth Cut in Half: IEG

Posted on by Chief Marketer Staff

In response to an unprecedented economic situation not faced by the sponsorship industry in the past two decades, IEG has revised its forecast for sponsorship spending this year, cutting it in half as the full impact of the recession grips North American companies.

Those companies are now projected to still spend more this year than they did in 2008, but only by a tiny margin of 1.1%. That compares to the 2.2% growth previously predicted by IEG, a sponsorship research company. The revised figure means sponsorship spending by U.S. and Canadian companies will total $16.79 billion this year compared to $16.61 billion in 2008, IEG said.

The revision marks the first time that IEG has ever issued a mid-year update of its annual spending forecast.

Across the world, the growth of sponsorship spending is also slowing. IEG’s December forecast projected a rise in spending of 3.9% above the $43.1 billion spent in 2008; that figure has been revised downward to 3.1%, resulting in total global expenditures of $44.4 billion for 2009.

“While the lower forecast will disappoint industry practitioners, the good news is that sponsorship is one of the few forms of marketing where spending figures remain in positive territory,” said Jim Andrews, IEG senior vice president and editorial director, in a release.

The revised forecast does not project significant changes in the breakout of how sponsor dollars are allocated across the industry’s six major property sectors. Each segment will see its earlier projected growth trimmed proportionally.

Projected dollar amounts for each property type are sports: $11.48 billion, up .7% from $11.4 billion in 2008; entertainment tours and attractions: $1.64 billion, up .7% from $1.63 billion; causes: $1.55 billion, up 2.2% from $1.52 billion; arts: $838 million, up 1.3% from $827 million; festivals, fairs and annual events: $775 million, up 2.9% from $753 million; and associations and membership organizations: $498 million, up 3.3% from $482 million.

Globally, subtracting U.S. and Canadian activity, spending by the rest of the world is expected to reach $27.6 billion, according to the mid-term update, down from a projected $27.8 billion in December.

European firms are now projected to spend $12.1 billion this year instead of $12.2 billion, representing a 3.4% increase from 2008. Asia Pacific companies should increase spending to $10.1 billion instead of $10.2 billion, for an increase of 6.3%over last year.

Spending projections are relatively unchanged for Central and South American companies and those based in all other parts of the world.

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