Irish and global companies are set to reject this summer’s World Cup in favour of other events when directing their sponsorship spend, which is expected to soar this year, writes Geoff Percival.
“Our read on the World Cup is that for Fifa it is proving difficult to find companies willing to be a partner. And this is in the context that while the sport is more popular than ever, and teams like Chelsea and Manchester United are seeing major incremental growth in sponsorship revenues, Fifa’s reputation has left the sponsorship conversations in a shadow of doubt,” said John Trainor, chief executive of sponsorship agency Onside.
The tournament’s roster of sponsors remains noticeably under-subscribed and FIFA could be facing a significant financial shortfall, said Mr Trainor.
“Six months before the final draw for the 2014 World Cup in Brazil, Fifa declared its sponsorship programme soldout. This year, while Fifa has refilled its ranks of top-tier partners with firms in Russia, Qatar and China, it appears that just one of the slots available to regional tournament sponsors has been claimed from a potential pool of 20.
By the time the 2014 tournament in Brazil kicked off, eight local companies had signed on, so there is a big gap to fill in the coming months. And with just five months until the World Cup’s opening game, time is against Fifa.
“If you are going to do a big deal like this, potentially over $100m (€81.5m), and want to activate it to make sure you get proper return on investment, it’s really late. Thus, convincing a company to make a multi-million bet on Fifa at this point is a tough sell,” he said.
Ireland’s non-participation in Russia makes it an easy call for Irish companies. Nevertheless, Onside expects Irish-based sponsorship spend to pass the €200m mark for the first time ever this year despite a rebuffing of the planet’s biggest sporting event, legislative threats to certain categories of sponsorship, the continuing threat of Brexit and ongoing ethical concerns in sport.
“The upward investment in Ireland mirrors a similar picture we are seeing more widely for sponsorship across the eurozone, albeit at a higher rate in Ireland,” said Mr Trainor.
Irish sponsorship spending increased 10% in 2017, to an estimated €179m, with nearly 67% of sponsors increasing investment, compared to the 55% that had planned to at the start of the year.
Onside estimates that sponsorship is now attracting 21% of total marketing investment, up 7% on post-recession levels.
The company also expects traditional sponsors, like the banks and telecommunications companies, to be joined by more professional services and construction firms when competing for sponsorship opportunities.
Sport will remain the focus for the majority of sponsors; closely followed by cultural events and community/cause-related activity, Onside said. “The big challenge sponsors want to overcome in 2018 is how to achieve gains in an increasingly cluttered environment and this needs to result in exciting and innovative activations for consumers,” said Mr Trainor.
“It will also see sponsors exploring existing or new sponsorship rights in a fresh way, with real opportunity in spaces from GAA county boards to hockey and opera to landmark events such as the World Meeting of Families this summer.”