Sponsorship agency leagues

LONDON - The worldwide controversy surrounding this year's Olympic Torch Relay to Beijing has somewhat overshadowed the longstanding positive perception of the Games, and the boost it received when London won the 2012 bid. But however unsavoury the images from the various legs of the Relay, including London, the protests have had little impact on sponsorship revenues, and, overall, the UK sponsorship market is in robust health.

Tim Crow, chief executive of Synergy, says that far from damaging the Olympics, the fact that the Relay attracted such a high number of protests reflects the strength of the Olympic brand. 'There have been lots of events in China, but the Olympics being a magnet for protests demonstrates the importance of the Games,' he says.

Most in the industry believe the Relay protests should not detract from the strength of London 2012. Bob Heussner, managing director of Octagon Games Marketing, says that the London Organising Committee of the Olympic Games (LOCOG) has sold more sponsorships prior to the preceding event than any other organising committee in Olympic history. However, Heussner warns that there may be obstacles ahead. 'Securing the next 25 sponsorship deals will be the challenge,' he says.

Karen Earl, chairman of the European Sponsorship Association (ESA), believes the outlook for Olympic sponsorships is positive. 'Although there was an initial delay, LOCOG has secured a variety of brand partners in a wide range of categories,' she says. These categories are limited - thankfully, say agencies - and there will be no repeat of the unlikely associations of the 1996 Atlanta Games, which included an official game show and an official carpet manufacturer.

Most observers agree that the excitement surrounding London 2012 will ebb and flow, and concede that maintaining a winning mood for six years is impossible. However, the sponsorship industry is unanimous in predicting a huge uplift in both sponsorship and sentiment as 2012 draws nearer.

In February, research from Ipsos MORI's Sportscan revealed that the value of the UK sports sponsorship market topped £450m for the first time. The estimated market size for 2006 is £451m, an increase of 5.37% on 2005. Ipsos noted that, on the whole, contract renewals and the search for new sponsors of existing properties resulted in higher fees, and predicted further growth this year.

Nonetheless, despite of the enthusiasm surrounding the Olympics, and while the cost of big-ticket sponsorship associations is rising in the highly competitive sportssponsorship market, it would be wrong to assume that the broader sector is buoyant. Crow warns that parts of the football market are under pressure. 'There is a great deal of investment in the top four Premier League football teams, and, at the other end of the scale, there has been a greater investment in grassroots activity. However, the teams in the middle are being squeezed and are suffering from a lack of investment,' he says.

Corporate social responsibility is a fast-growing area of sponsorship activity as brands try to convince consumers of their green credentials. Nigel Currie, director of Brand Rapport, says that every sponsorship programme it is currently involved in has an environmental element. 'The sponsorship industry is ideally suited to developing green programmes,' he adds.

Away from sports, the music sponsorship market continues to flourish as the industry attempts to reinvent itself in the face of increased pressure from dwindling sales. Tove Okunniwa, head of MEC Access, says that music is a genuine area of passion among consumers, an attribute that is key to increasing sponsorship interest. 'Music sponsorship is a way of connecting with the notoriously hard-to-reach 18- to 34-year-olds in a way that is genuinely engaging,' she says.

A lack of understanding among clients was one issue highlighted by some of the agencies surveyed. In addition, a number of companies also cited recruitment as a problem, reflecting a growing concern within the broader creative sector. The European Sponsorship Association says it is addressing this issue and is developing an education programme designed to put qualifications in place that will be recognised by the entire industry.

Respondents also believed the biggest factor affecting the industry was the state of the economy, as the impact of the credit crisis deepens. But despite the continued concerns surrounding the global economic slowdown, Earl says the current climate may actually benefit the sponsorship market. 'The fact is that brands will be looking at their marketing budgets carefully, and will want to ensure they are spent wisely. Sponsorship is highly effective and could benefit from this scrutiny,' she says. 

Additionally, the long-term nature of sponsorship tie-ups - where brands often commit to a three-year association - means that the market enjoys a degree of insulation from short-term cuts in marketing budgets. However, some agencies claim that if the economic climate does not improve soon, the likelihood is that brands will cut back on their media support of existing deals.

But that view is not shared by Okunniwa, who believes brands will not be backing out of long-established sponsorships. 'Many of the most high-profile sponsorships are long-running partnerships. The brand equity and strength of these deals increases with their length, and this is not something to be disposed of lightly,' she says.

Top Sponsorship Agencies
RankAgencyFee IncomeFee Income% changeTurnover
2007 £m2006 £m2007 £m
1Fast Track8,340,0815,332,3195619,764,453
3Synergy (Karen Earl Sponsorship)3,171,5342,536,400257,811,000
4The Works London2,814,9592,701,41848,900,964
7M&C Saatchi Sport & Entertainment1,978,0001,448,000374,668,000
10Four Sport, Arts & Sponsorship993,479675,222471,168,969
12Velocity Sport & Entertainment852,513937,583-9960,670
Source: Marketing


Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now


Leaked document shows Nokia to be rebranded as Microsoft Mobile
Nike lays-off hardware staff in move that casts doubt on future of FuelBand
Greenpeace says save the bees or humans will die
What brands need to know about changes to VAT and online downloads in 2015
Jimmy Savile victims urged to claim compensation in new ad campaign
UKIP launches biggest  ad campaign and stirs up 'racist' accusations
Apple boss Tim Cook provides voiceover on ad touting firm's renewed green commitments
John Lewis walks consumers through its history to celebrate 150 years of business
Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Toyota achieves the impossible by calming angry Roman drivers
Tom of Finland's 'homoerotic' drawings made into stamps
YouTube reveals user habits to appeal to 'older' marketers
Ex-M&S marketing chief Steven Sharp consulting at WPP
Wolff Olins reveals new CEO after Apple poaches Karl Heiselman
Glasgow offers £30,000 prize to best digital idea for 2014 Commonwealth Games
Google's revenues surge but shares drop as it grapples with transition to mobile
Facebook beats Twitter to most 'marketing friendly' social media site crown, says DMA
Fableists believe children like Finn should be outdoors enjoying life
Homebase, Baileys and Camelot join the line-up at Media360
MasterCard renews Rugby World Cup sponsorship to push cashless message
Lynx unleashes £9m 'Peace invasion' campaign
Social Brands 100 Youth: Pizza Hut most social youth brand in UK
Cheryl Cole is wild and arresting in new L'Oreal work
Morrisons told not to show alcohol ads during YouTube nursery rhymes
O2 head of brand Shadi Halliwell departs after 23 years at company in restructure
Tesco hit by further sales decline as it turns to digital Clubcard and social network
Branding guru Wally Olins dies aged 83
Duracell short film captures epic Transatlantic voyage