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IEG Revised Sponsorship Spending Forecast Cuts Growth Rate in Half

June 12, 2009:

Sponsorship spending by North American companies expected to grow 1.1 percent in ’09, down from December’s projected 2.2 percent increase

For More Information Contact:
Jim Andrews, IEG, LLC, Tel: 312/944-1727; Fax: 312/944-1897;
jim.andrews@sponsorship.com

 

Chicago, Ill. – In response to an unprecedented economic situation not faced by the sponsorship industry in the past two decades, IEG is issuing the first-ever mid-year update of its annual spending forecast.

The revision projects North American companies will still spend more this year than they did in ’08, but only by a tiny margin of 1.1 percent.

That compares to 2.2 percent growth predicted in IEG’s 24th annual industry forecast issued at the end of ’08, which at the time was the smallest growth rate in the forecast’s history.

The new figure means sponsorship spending by U.S. and Canadian companies will total $16.79 billion this year compared to $16.61 billion in ’08.

Globally, sponsorship’s growth rate also will slow. IEG’s December forecast projected a rise in spending of 3.9 percent above the $43.1 billion spent in ’08; that figure has been revised downward to 3.1 percent, resulting in total global expenditures of $44.4 billion for ’09.

“While the lower forecast will disappoint industry practitioners, the good news is that sponsorship is one of the few forms of marketing where spending figures remain in positive territory,” said Jim Andrews, IEG senior vice president and editorial director.

Case in point: North American media spending is predicted to decline 4.2 percent in the coming year, according to an update to the worldwide media and marketing forecast produced by GroupM, the global media investment management operation of WPP Group plc. The drop was anticipated to be just 3.2 percent in the company’s December report.

No Major Changes Within Property Segments, Geographic Markets

The revised forecast does not project significant changes in the breakout of how sponsor dollars are allocated across the industry’s six major property sectors. Each segment will see its earlier projected growth trimmed proportionally.

Projected dollar amounts for each property type are sports: $11.48 billion, up .7 percent from $11.4 billion in ’08; entertainment tours and attractions: $1.64 billion, up .7 percent from $1.63 billion; causes: $1.55 billion, up 2.2 percent from $1.52 billion; arts: $838 million, up 1.3 percent from $827 million; festivals, fairs and annual events: $775 million, up 2.9 percent from $753 million; and associations and membership organizations: $498 million, up 3.3 percent from $482 million.

Globally, subtracting U.S. and Canadian activity, spending by the rest of the world is expected to reach $27.6 billion, according to the mid-term update, down from a projected $27.8 billion in December.

European firms are now projected to spend $12.1 billion in ’09 instead of $12.2 billion, representing a 3.4 percent increase from ’08. Asia Pacific companies should increase spending to $10.1 billion instead of $10.2 billion, for an increase of 6.3 percent over last year.

Spending projections are relatively unchanged for Central and South American companies and those based in all other parts of the world.


About IEG, LLC

IEG is the world’s leading provider of independent research, consulting, training and analysis on sponsorship. Founded in 1981, IEG provides corporations and properties with the strategies and tools to harness the sales and marketing power of sports, arts, entertainment and cause marketing.

IEG offers services that include sponsorship consulting, competitive intelligence and valuation. IEG also publishes IEG Sponsorship Report, the international biweekly newsletter on sponsorship; the IEG Sponsorship Sourcebook, the definitive guide to sponsors, properties and agencies; and other industry publications and sources.

IEG also is the leader in sponsorship training. Its internationally renowned Sponsorship Conference, now in its 26th year, attracts a capacity crowd of delegates each year. Through its conferences, seminars and webinars, IEG has trained more than 45,000 sponsorship executives worldwide.

For more information about IEG and the sponsorship industry, please visit www.sponsorship.com or call 800/834-4850 (outside the U.S. and Canada, 312/944-1727).