Sponsorship industry is maturing nicely in Australia
18/08/2006 |
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The inaugural S-COMM Australia ASMA ‘Sponsorship Outlook’ industry study reveals an Australian sponsorship industry that is maturing nicely. While recognising the potential of sponsorship to deliver on marketing objectives, the study also found a level of frustration with the medium’s challenges – practitioners are well aware of weaknesses (both perceived and real) and are seeking clarification and improvement. In particular, there was consensus among corporate respondents that there was some way to go in terms of sponsorship being fully understood within their organisations.
On the positive front, the Australian industry compares well with Europe and the US, performing better on share of marketing budget and measurement, however lagging in leverage investment.
S-COMM Australia and ASMA (the Australasian Sponsorship Marketing Association) jointly commissioned the report in May 2006 as part of their ongoing commitment to the development of the sponsorship industry in Australasia. The primary objective was to gain an understanding of the challenges and state of play within the industry.
The study found that corporate sponsors are now spending 20% of their total marketing budget on sponsorship and 29% say they are likely to increase their sponsorship spend this year.
ASMA Executive and Performance Worldwide Australian General Manager, Sport Sponsorship, David Fleming said the results reflected the growing importance of sponsorship in building brand and customer loyalty.
“The forward outlook is extremely positive and survey results show that sponsorship is playing an increasingly vital role in strategic marketing,” said Mr. Fleming.
“The 20% budget spend in sponsorship compares favourably to Europe’s average of 17.7%2 and is ahead of the 13%3 experienced in the United States.”
Other key findings in the research1 undertaken by the Australasian Sponsorship Marketing Association (ASMA) and S-COMM Australia include:
sponsors spent an average of $2.5 million in 2005 – 60% for rights fees, 34% on leverage and 6% on research;
sport still dominates Australian sponsorship investment, with 62% of spend allocated to sport;
80% of respondents feel there are too many sponsors within individual Australian sponsorship properties and 56% say they would be prepared to increase their sponsorship spend to reduce the number of partners involved with their specific properties;
football (soccer) is seen as the strongest growth opportunity for sponsors (25%), closely followed by cause-related programs (20%) with AFL coming in third at 12%;
cause-related sponsorship has emerged as the next big opportunity across the board and is seen as the leading area of sponsorship value for money and second only to AFL for measurement of return on investment and co-operating with or supporting partners;
improving brand health measures like brand awareness, image and loyalty were cited as the key reasons for taking up sponsorships;
All three groups – sponsors, rights holders and agencies - cited measuring ROI as becoming increasingly important - with only an average rating for the ability to effectively measure ROI
Despite brand health issues dominating reasons for sponsoring, 86% analysed exposure through the media to determine the value/effectiveness of sponsorships, while only 59% analysed with consumer/sponsorship research;
S-COMM Australia Managing Director, Lynne Anderson, said the industry had clearly evolved rapidly in the past five years, but much more was still to be done.
“Levels of investment in leverage in Australia still remain below international standards with less than 60 cents spent for every dollar of rights fee,” said Ms Anderson.
“While spend on research at 6% is higher than US figures, there appears to be a stalled focus on quantifying media exposure only, rather than incorporating the measurement of other viable objectives such as shifts in consumer attitudes, and of course ultimately, sales, that really lie at the core of effective marketing.”
While sport remained a dominant focus of investment and football is clearly winning the minds of the industry as the growth area, cause-related partnerships emerged as an area of strong return on investment and future growth.
The sponsorship and marketing agencies in the survey highlighted the general shift to content-driven marketing – they forecast online marketing as the biggest likely area of growth for leveraging activity.
“While agencies expect event delivery to remain the leading area of sponsorship activity for their business, they indicated that on-line marketing would increase at a massive rate,” said Mr. Fleming.
“At present, only 4% of agencies indicate online marketing as a key area of activity, while 42% see it as an area of growth and second only to event delivery, giving it huge priority over traditional activations such as sales promotions, hospitality and advertising.”
The standout local partnerships of the past twelve months were identified as the NAB’s sponsorship of the Melbourne 2006 Commonwealth Games and the Optus alignment with Cirque du Soleil.
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