This could well be seen as the year the sponsorship industry came of age. A burst of activity has increased demand for agencies as never before, raising the bar in terms of performance levels and ensuring Marketing's Agency of the Year was a tough choice.
Karen Earl Sponsorship pipped its rivals to the prize due to its consistent excellence across its business through the year. There was little major sponsorship activity in 2005 in which it did not play a pivotal role.
Karen Earl's appeal stems from its full-service capabilities, exploited through four cornerstone divisions covering consultancy, integration, event management and PR.
With nine big new account wins and a raft of incremental business picked up across these divisions, Karen Earl's year-on-year fee income topped £2m for the first time, from a turnover of £3.7m.
Many of the new contracts are long-term associations, meaning the agency is well-placed to hit record year-on-year fee income next year.
Its most high-profile new business win was the Diageo account for Guinness' £25m title sponsorship of the English rugby union Premiership, as it replaced previous backer Zurich, in a hotly contested pitch.
With only a few weeks to prepare between the brief and the final pitch, Karen Earl beat five rivals to claim the business. The four-year contract will see the agency take responsibility for all aspects of the sponsorship, from strategic development to promotions and sports media relations.
New business was not the only area in which Karen Earl had a strong year.
It built on its relationship with British Airways with business based on the carrier's links with rugby. It launched and activated BA's tie-ups with the RFU and Scottish Rugby Union and the British and Irish Lions, handling the contract negotiation for the latter.
Coca-Cola was a lucrative existing client, with incremental business from its title sponsorship of the Football League, as well as subsidiary brand Powerade's tie-ups with the Lions, the RFU and the Football League.
The Lions sponsorship proved the key driver in Powerade achieving its highest-ever UK market share in the first half of 2005.
Karen Earl also built on its relationship with Royal Bank of Scotland, negotiating an extension of its title rights for the 6 Nations rugby (at £26.6m over four years, the sport's biggest sponsorship), managing hospitality for the bank's sponsorship of the BMW Williams Formula One team, and developing and implementing the strategy for its backing of Jack Nicklaus' last professional golf tournament, the 2005 Open.
Rounding out Karen Earl's involvement in the year's major sports events was its work on Npower's title sponsorship of cricket's Ashes Test series.
Exposure was guaranteed, but the agency's creative activation of the sponsorship over the summer fully exploited the situation for the client.
The Npower 'Sing Jerusalem' campaign created the most talked-about sponsorship activity of the year. Picked up by every national media owner, it tapped into the hype around the series, delivering a high-impact cut-through for the sponsor when it was most valuable.
Karen Earl has also developed its own internal structure this year. Following a successful soft-launch in late-2004, the agency revamped its PR department under divisional brand name KES PR. The move, in response to client demand for specialised sponsorship PR, resulted in a wave of new and incremental business wins.
International development has continued apace, allowing the agency to be competitive in bidding for the bigger global sponsorship contracts.
Forty per cent of its work in 2005 came from outside the UK.
The agency also launched a sponsorship evaluation model this year. Testament to its success is the fact that Karen Earl has been commissioned by clients to apply the model to 10 projects in 2005.
With the World Cup and the success of landing the 2012 Olympics set to fuel the UK sponsorship market next year, expect Karen Earl to build further on its impressive performance. The biggest challenge to its positioning might come from within, after previous owner Huntsworth sold the business, along with 15 other marketing services agencies, to Media Square in a £63m deal in mid-November.
PREVIOUS WINNERS 2004: M&C Saatchi Sponsorship
BEST OF THE REST
London's victory in securing the 2012 Olympics created a rash of media speculation as to how much revenue the Games would bring to the UK sponsorship market. Regardless of the boost the Olympics will provide, the UK sponsorship market is already in a major growth spurt, and many predict 2006 will be the year that the annual value of sponsorship rights fees in this country passes the £1bn mark.
Much of the reason behind the industry's year-on-year growth lies in the increasing sophistication of its agencies. Gone are the days when sponsorship meant simply slapping a logo on a shirt. Modern sponsorships, when executed correctly, can provide the heartbeat to a brand's marketing strategy, touching all communication channels that the company employs.
IMG is among the agencies leading the charge. The biggest sports marketing agency in the world, many believed IMG was on the ropes last year in the aftermath of the death of its founder, Mark McCormack. A buy-out by investment bank Forstmann Little was expected to lead to a break-up of the company's divisions, but now IMG is on the road back to health.
IMG Consulting, its sponsorship division, is proof that the agency is a force to be reckoned with once more. Confidential financial details viewed by Marketing indicate a substantial year-on-year increase in fee income, with major new business wins in GE, Johnson & Johnson and Coca-Cola.
Each of these three contracts are for ongoing work on Olympic projects, a corner of the market that IMG has made its own. Such has been the success of the UK headquarters of the agency's consulting business that expansion into Europe has been implemented, with offices opening in France, Germany and Holland. In response to client demand IMG has hired two senior executives from direct agency Tequila to improve its ability to integrate sponsorship into promotional and direct work.
Last year's winner of the Sponsorship Agency of the Year title, M&C Saatchi Sponsorship, came close to retaining its title. After a year in which the agency rose from nowhere to major player status, M&C defied expectations by performing as strongly again this year. Set a tough target of 20% growth in 2005, the agency doubled the predictions with a 40% year-on-year increase in net revenue.
New business included winning a four-way pitch to handle all of Carlsberg Tetley's sports sponsorship and PR, working with Reebok on a six-month project to launch the new Pump 2.0 trainer in the UK and exploiting the brand's athletics tie-ups for the World Championship, and most recently being appointed by Orange to handle its sponsorship of the British Academy Film Awards.
The pan-European campaign for Reebok's World Championship activity was the agency's stand-out creative work of the year, using Reebok's association with Swedish heptathlete Carolina Kluft to generate coverage equivalent to £2.5m worth of advertising - a 40:1 return on investment.
In order to ensure its clients received maximum focus, staff numbers at M&C Saatchi have risen 60% to a headcount of 16, with two further appointments expected in the New Year.
Another of the big global sports marketing networks to produce a turnaround in performance was Octagon Marketing, which suffered a blow last year when Zurich decided not to renew its sponsorship of the rugby Premiership.
Despite this, the agency proved its mettle by picking up the activation contract from Emirates for its 2006 World Cup sponsorship, work from Ericsson on its backing of a team in the Volvo Ocean Race, and developing and launching the programme for Tesco's Sports for Schools and Clubs campaign. The latter produced a 71% prompted awareness of the campaign within its first two months.
Octagon also expanded beyond its sports roots with a music division.
It is currently working with Vodafone on delivering a strategy in this area.
Outside of these candidates, some specific campaigns warrant a mention.
Lighthouse Communications' Lucozade and Lucozade Sport activity propelled it back into contention for more major contracts; later in the year it picked up the account to handle all of Times Newspapers' sponsorship activity in the sports sector.
Fast Track will be another agency to watch out for as the 2012 Games draw closer. A specialist in Olympic sports marketing, the company's work on the 'Team Volvo for Life' strategy, which involved the car manufacturer sponsoring an elite group of Olympic sailors, was nominated to represent the UK at the 2005 European Sponsorship Association Awards.