Sponsor partners are asking sport event hosts for more branded and social media content as well as hospitality and advertising opportunities to help drive community engagement.
By Angela Kryhul
Moderator Brent Barootes, Alan Ahac, Derek Mager, Greg Paseshnik and Norva Riddell
Since the pandemic, sponsors have been spending less on rights fees and more on activations such as branded content, social media, hosting and hospitality opportunities, advertising and public relations. In fact, activations spending is the highest that it has ever been, according to the latest Canadian Sponsorship Landscape Study.
The study, released in November 2023, estimates that $2.78 billion, or 25% of every marketing dollar spent in Canada, is going into sponsorships, event marketing and experiential marketing. Of that amount, rights fees account for $1.4 billion and activations $1.3 billion.
“It’s almost dollar-for-dollar,” Brent Barootes, president and CEO, Partnership Group–Sponsorship Specialists, said during the panel discussion.
A panel of experts speaking about alternate revenue streams during Sport Tourism Canada’s Sport Events Congress, March 13-15, 2024, in Winnipeg, noted that national sport organizations are looking closely at the promise of activations as their event hosting costs rise and government grants decline. Here are just a few of the ideas discussed during the session:
Norva Riddell, senior vice-president, sales, and chief revenue officer, True North Sports & Entertainment
Trending: “Post-COVID, a lot of brands, a lot of organizations, had to rebuild. They’re redirecting marketing, activation and sponsorship dollars to associate with brands and the communities that they feel are going to help their brand and are putting more emphasis on how assets help leverage their product, their brand or their responsibilities within the community.”
Helpful advice: “We do a lot of listening to really understand what partners are trying to get out of sponsorships. If you sell them something that’s not a fit, if we’re not providing a good experience, they won’t renew and they will find other ways to spend their money. We’re leaning into experts within the communities that are eager to work with us. As you think about how to engage different people, communities and cultures within your events, you really need people from those communities who understand, so that you are doing it effectively.”
Alan Ahac, director, indoor international events, Volleyball Canada
Trending: “The funds available [i.e., government sport hosting grants] is going down and the number of events is going up. We have inflation and our hotel costs are 25% to 40% higher this year as opposed to last year. The landscape is changing. Sponsorships are going to have to be a component of the solution.”
Helpful advice: “If you’re looking to bid on a volleyball event, it’s not just about the dollar amount that you can provide as a hosting fee to the event. It’s all of the partnerships you bring. Work with your vending partners to offer the best deal. Can hotel partners do meal service—which is very important to athletes—cost effectively? For community engagement, talk to the major employers [before you bid on an event] and ask if they’re in. All forms of value in-kind sponsorships are extremely valuable. Merchandise sales have also become a significant revenue source for us. These are the details that we measure when we’re selecting host communities now.”
Greg Paseshnik, director, programming & partnerships, Manitoba Liquor & Lotteries Corporation
Trending: “People come to us looking for revenue, but the ones that are finding success are focused on relationship building and really want to know what we’re trying to get out of sponsorships. They’re not just sending an email with a gold, silver, bronze [sponsorship package]. Dig deeper and be focused on the content and key messages we’ve been following on social media. Diversity, equity, inclusion, and Truth and Reconciliation are key things that we’re looking for in sponsorships.”
Helpful advice: “One of the things we’re seeing [is that] so many people are not evaluating their properties correctly. Some come to us and say, ‘Hey, we need $25,000 for this event, or $50,000.’ They think we have lots of money and are just going to donate. That’s not how it works. If you don’t have anyone who understands sponsorships and valuations, find someone even if you have to pay for it because it will pay off for you at the end.”
Derek Mager, managing partner, The Data Jungle
Trending: “Sponsorship is not a donation or advertising. Sponsorship is a partnership, a two-way street where both sides of the table are benefitting. The [sports] property has to help the partner brand achieve their objectives, whether they’re trying to reach new customers, raise awareness of the brand or trying to engage with people.”
Helpful advice: “We always say that whoever’s armed with the information is usually in the better negotiating position. The work we do now is really about demonstrating ROI so that sponsorships turn into partnerships. It’s easier to maintain a partner as opposed to procuring a new one.”
Published April, 2024
