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Brands throwing cash at sponsorship with little idea of return, report finds

Brands are throwing money at sponsorship deals even though the vast majority are unsure if there is any return on investment.

A report from Warc found $66b will be spent this year on sponsorship, an increase of 5% on 2017, with sport attracting the lions share of money.

North America contributes 37% of all spend, followed by Europe with 26.7% and Asia Pacific 25%.

Almost 40% of FIFA World Cup sponsorship deals originated in Asia.

But analysis revealed only 19% of marketers said they could confidently measure the ROI of their sponsorship campaigns.

The report found the two top metrics for evaluating success were engagement on digital and social media channels. Yet both those metrics are often questioned due to what Warc described as the “weak relationship to sales”.

Social is considered the number one activation channel for sponsorships by 83% of marketers. However, the prevailing sentiment is that authentic engagement of sponsorship, through digital and social activation, remains a challenge,” the report said.

Warc data editor James McDonald said sport remains the most sought-after commodity.

“As brands continue to jostle for a finite amount of consumer attention, the changing way in which media is consumed has led to the fragmentation of audiences,” he said. “Yet sports generate an engaged, mass audience which sponsors can reach, before amplifying their campaigns via social media and experiential events.”

He added that sponsorship plays the same role as mass market brand awareness channels, and reach consumers in the “upper funnel” of a marketing plan.

“Sponsorships facilitate the upper part of the sales funnel – driving brand awareness and consideration – in much the same way as TV. This can present challenges, however, such as the knowledge gap between brand impact and sales impact,” McDonald said.

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