Global sponsorship spending to rise 5.2 per cent in 2011

Detroit (Reuters): Global spending on sponsorships of sports and other activities is projected to rise 5.2 per cent this year after a stronger-than-expected increase in 2010, according to a research firm that tracks such spending.

Spending on sports, causes, festivals, the arts, entertainment tours and associations is expected to grow to $48.7 billion in 2011 from $46.3 billion last year, said IEG, a unit of advertising giant WPP Plc.

In North America, such spending is expected to rise 5.8 per cent to $18.2 billion, IEG said.

“We’re confident the industry has rebounded from the historic low point of 2009,” IEG Senior Vice President Jim Andrews said in a statement.

A year ago, the North American sponsorship industry lamented 0.6 per cent lower spending in 2009 – the first decline ever – as corporate backers slashed budgets during the recession. Global spending rose 2.1 per cent, however.

Last year, spending rose 5.2 per cent globally and 3.9 per cent in North America, ahead of IEG’s projections for growth of 4.5 per cent and 3.4 per cent, respectively.

Expected sponsorship spending growth in 2011 should outpace media spending, projected to grow 3.9 per cent in North America this year according to WPP’s GroupM.

By category, sponsorship spending on sports -- the largest segment – is expected to increase 6.1 per cent this year after increasing 3.4 per cent last year, IEG said. While the four major North American sports leagues saw 7.6 per cent growth last year, other types of sports saw little or no increases.

Growth in spending on cause sponsorships is expected to slow slightly to five per cent this year from 6.7 per cent last year, IEG said.

Growth in spending on the arts is expected to rebound to 5.1 per cent from 2.7 per cent last year as the segment’s two largest backers – automotive and financial – return, IEG said.

Spending on entertainment tours and attractions in 2011 is expected to grow 5.9 per cent, followed by 5.6 per cent for associations and membership organisations, and 4.9 per cent for festivals, fairs and annual events, IEG said.

As for total dollars spent, the breakdowns in North America are expected to remain unchanged from 2010 with sports at 68 per cent, followed by entertainment tours (10 per cent), causes (nine per cent), arts (five per cent), festivals (five per cent) and associations (three per cent), IEG said.

Outside North America, Europe will remain the largest source of sponsorship spending, followed by Asia Pacific, IEG said. However the fastest growing region will be Central and South America.