Sponsorship in 2024: 10 trends to watch

Paris 2024 – the excitement builds: The Olympic Games and Paralympics are back in Western Europe for the first time since London 2012, so they are sure to create a major feelgood factor in this part of the world. For a lot of sponsors, the key strategic question will be how to take advantage of these mega-events – so expect some interesting activations to start rolling out from the spring. That said, a lot of companies have no rights to Olympics-related assets – so the challenge will be how to respond to that. Some will choose to save their money – waiting for Paris 2024 to pass – but others may see UEFA’s European Championships in Germany as a way of making their mark on fans.

More opportunities for women’s sport to drive growth: 2022 was the year women’s sport smashed through the glass ceiling, as the England soccer team triumphed at the UEFA Euros 2022. 2023 was just as exciting, with England goalkeeper Mary Earps becoming a lightning rod for fan enthusiasm. Along the way, sportswear giant Nike learned just how easy it is to misjudge the passion for women’s sport. 2024 looks set to build on the progress of Earps & Co, with the Women’s Six Nations, Women’s Twenty20 World Cup, Women’s Champions League and Solheim Cup. Sponsors that haven’t already signed up to women’s sport may find themselves on the wrong side of history.

Mass participation shows durability: The loss of mass participation specialist Limelight was one of the low points of 2023. But 2024 is shaping up as an exciting year for mass participation – which seems to have put the pandemic firmly behind it. Limelight’s events have been snapped up by Y11 Sport & Media, and will be operated by Y11’s Motiv Sports division. The Adidas Manchester Marathon is sold out, another promising sign for the industry. The pandemic was obviously difficult for mass participation – but it did encourage the development of virtual and hybrid events, which add to the richness of sector and offer more sponsorship touchpoints. Underlining the point, Zwift has announced plans for the new Zwift Games, which it claims will be the largest cycling esports event ever held.

FIFA’s expanded Club World Cup moves closer: FIFA’s first ever 32-team Club World Cup will take place on the East Coast of the US in the summer of 2025. Currently, it will include two English clubs, Manchester City and Chelsea – though Arsenal could join them if they win this year’s UEFA Champion’s League competition. As yet, it is unclear how popular the event will prove to be with soccer fans – though the fact that it is taking place during the football-free summer months is sure to appeal to some. Competing clubs will bring their shirt sponsorships into the event – but the launch raises a few salient questions for sponsors. What will Club World Cup sponsorship packages look like, for example? Will the newly-expanded competition impact on the value of other summer sponsorships? How will it affect the current market in pre-season soccer tours? Upheaval in club football is likely to be a feature for some time. A recent ECJ ruling resurrected the prospect of a European Super League challenging FIFA – at the very same time that Saudi Arabia is flexing its financial muscles in the sport. Meanwhile, a 10-point financial fair play deduction for Everton threatens to introduce a new kind of volatility into club soccer. As we noted last year, careful due diligence, shorter contracts and a more diversified portfolio of partnerships all make sense for sponsors.

Consumer activism continues to influence sponsorship: The sponsorship industry is used to seeing industry sectors banned by regulators (tobacco, alcohol, etc.). But increasingly, rights holders also need to second guess public opinion regarding partnerships. Oil and gas companies have becoming increasingly difficult to partner – and there is a growing sentiment against betting sponsorship. Could airlines, fast fashion brands and processed food firms go the same way? Might sportswear giants experience an eco-backlash? Conversely, there seems to be more room for sponsors that push back progressive boundaries. Cheddar AFC’s partnership with vegan cheese Violife is a case in point, as is Manchester City’s partnership with zero alcohol beer brand Asahi Super Dry. The ability to demonstrate an ethical position seems more urgent than ever.

Esports to have a robust year: After spectacular growth during the last decade, some of the heat has gone out of the esports sector in the post-Covid-19 period. Explaining the change in mood, critics cite the high cost of sponsoring top teams, the difficulty of demonstrating ROI, and a generalised feeling that the esports audience is still sceptical about brands invading their space. Despite recent setbacks, however, esports continues to be on a strong growth trajectory – with GlobalData forecasting the sector will grow from $1.6bn in 2023 to $4.8bn by 2030. And sponsors are expected to be a key factor in that growth. Far from fleeing the esports arena, the likes of Red Bull, Intel, Coca Cola, Microsoft, Mobile 1 and Mountain Dew still have significant skin in the game. Gillette, HSBC, Mastercard, McDonalds and Sky are just a few of the brands to have signed new partnerships in the second half of 2023. A new deal between Riot Games and Kia suggests a lot more is to come from esports in 2024.

Performance-based agreements on the rise: US event platform Elevent believes the sponsorship industry is continuing to push towards performance-based agreements. Explaining why, it says: “There is inherent risk involved in a sponsorship investment: sports teams may not perform well, cars displaying the sponsor’s logo can crash on the first lap, and bad weather can significantly impact attendance at an event. Sponsors bear the brunt of the risk by agreeing to pay pre-agreed rights fees, regardless of performance. To counter this, brands are seeking sponsorship valuations skewed in their favour. While there is no standard, some companies aim for a marketing value-to-cost ratio of 1.5 to 2. In recent years, however, these ratios have seen a decline. As a result, a trend that originated in sports is making its way into deals. It consists of a lower initial rights fee with escalators, or bonuses, if certain criteria - such as making the playoffs, investing a certain amount in advertising, or reaching an audience threshold - are met.”

AI begins to make its mark: The AI revolution is starting to impact every sector – so why not sponsorship? In a recent blog, Larry Weil suggested AI will make it possible to unlock insights and predictions that were previously much more difficult to derive. Among key developments, Weil says: “AI can help companies understand customer behaviour and preferences, enabling them to tailor their sponsorship activities to meet their specific needs.” Better engagement (via chatbots and virtual assistants) and better measurement are also on the cards. AI also provides a range of tools that will also inspire creativity.

TV Sponsorship evolves again: For decades, TV sponsorship has meant a choice between free linear TV channels and PayTV, with the major innovations around product integration and branded content. But the TV opportunity is changing in front of our eyes. SVOD platforms like Netflix and Disney+ now have ad tiers – so sponsorship/product integration suddenly has a new ecosystem to explore. At the same time, the rising penetration of Connected TVs means that the distinction between TV and digital media is blurring. YouTube, for example, is now being viewed widely on TV sets. And the last couple of years has seen an explosion in niche FAST channels – carried by platforms like Roku, Tubi, Pluto TV and Samsung TV+. All of this means more sponsorship opportunities – but there’s another interesting dimension. Because CTV is effectively a TV/digital hybrid, it creates the potential for more personalised and transactional content (particularly if we throw image replacement into the mix). A fan might be watching a Gordon Ramsay FAST channel and see something in the show that they like (a cool blender, for example). Soon, they will be able to click on the image and have it delivered by Amazon before they even change channel.

The next big thing: Darts or drone racing? One of the most exciting things about the Olympics Games is that it provides a showcase for new and lesser-known sports. This year, for example, sports climbing, skateboarding, surfing and break have been added to the event. All of these will be hoping to use their global exposure to win new fans and sponsors, thus securing their future. They are not alone, however. Padel, pickleball, paddle boarding, kabaddi and drone racing are growing in popularity – and darts is seeing a resurgence of interest thanks to Luke Littler’s heroics. When you consider the growth of interest in women’s sport, esports, MMA, triathlon and Formula E over recent years, a key message for sponsors (and legacy rights holders) is that it’s more important than ever to stayed attuned to shifting attitudes and interests among fans. This is especially true now that social media platforms like TikTok can build mass movements in the blink of an eye.

Final thought: Plus ça change…

CSR remains front and centre: The worst of the economic crisis (rampant inflation, high energy bills) looks like it is behind us. But whoever wins the next election, there is little likelihood of additional money. Public services are still in disrepair and the cost of owning or renting a home remains a significant burden. With many people struggling, community engagement will remain a top priority for brands. Sponsors active in education, wellbeing, charity, and initiatives that promote community cohesion will continue to reap rewards in terms of reputation and brand affinity. The beauty of innovative and effective CSR these days is that a good story doesn't stay local anymore. Millennials and Gen Z love to share positive narratives via social media.