caytoo’s 2024 sponsorship sales predictions looks at key trends in store to help rights holders sell more effectively.

Before we consider what lies ahead, how did we do on our 2023 predictions? From A’s in sectors likely to struggle, the rebound of travel and the rise of ESG to B’s for Electrics Cars, women’s sport and buying signals to a D in Cybersecurity, we generally had a pretty good teacher’s report.

The full 2024 sponsorship sales predictions report is available to caytoo clients in their My caytoo portal, however, you can request a copy here.

2024 – reasons for optimism

Although war had an impact on energy prices and inflation, it didn’t cause the economic shock the world feared. Neither the US, UK or Europe entered a recession while the stock markets did better than predicted.

The latest Institute of Practitioners in Advertising Bellwether report revealed that UK marketers’ budgets have enjoyed their biggest boost in a decade despite the teetering economy.

Two of the world’s biggest sporting events – the Olympics and soccer’s European Championships (24 countries participating) – will give greater visibility to the concept of sponsorship and its impact.

The perfect storm of consumers becoming ever-more demanding about how companies benefit society (social impact) combined with the ever-increasing outcry over brands putting any foot slightly wrong in advertising means sponsorship is well-placed to be a more effective and safer marketing option.

For instance, society’s increasing focus on gender equality means rights holders with women-related properties are well-placed to attract sponsorship budgets (particularly following the halo of soccer’s 2023 Women’s World Cup).

2024 – reasons for caution

The ongoing wars in Ukraine and the Middle East, along with the sense that the latter is going to spread to involve more countries will impact many areas – politics, commerce, food production and social infrastructure.

2024 is the biggest election year in history, with 50 countries involved including the US and UK, which always adds to uncertainty and extra caution on companies marketing spend. Particularly the US and the impact a Donald Trump win would likely have on US foreign policy and the wider world.

For ‘established’ sports a challenge is facing more competition from new smaller sports popping up, fuelled by the Olympics widening to include ever more sports. The rise of Pickleball and Padel being prime examples: 30% of racket sports’ deals last year were accounted for by these two.

China suffered a post-COVID economic ‘slump’ which caused a bursting of their housing bubble. A knock-on effect is likely to be brands spending less (particularly luxury) as the China slowdown impacts sales. So, rights holders targeting those brands and/or playing on Chinese audiences face challenges.

With Saudi Arabia seemingly committed to increasing its investment in sport, it means rights holders outside the country face more competition for sponsor budgets, star power and, perhaps, an impact on audience numbers as consumers have different options about what to watch/follow.

Sector trends in 2024

In terms of 2024 sponsorship sales predictions, caytoo analysts believe these sectors will be particularly good to target.

Production in the Chinese electric car sector overtook Japan in 2023 and its brands will increasingly target the west. This is exacerbated by regulatory/political pressures which mean they’ll need to show how they benefit those markets in a wider capacity – a big box ticked by sponsorship.

The Artificial Intelligence (AI) arms race is heating up, such as Cohere – founded by ex-Google scientists and backed by Nvidia and Oracle – being in talks to raise as much as $1bn. Much like Crypto, AI is highly controversial and divisive, so its main/new players need to establish legitimacy and trust.

Speaking of a highly divisive sector, even our analyst team wasn’t consistent about the outlook for Crypto being a good sector to target. The fallout from the trials of FTX and Binance caused major damage but the US’ Securities and Exchange Commission (SEC) is certainly on a major charge to clean it up.

One of the biggest ongoing head-scratchers among our analyst team is the low share of deals being signed by Retail brands. Yes, the sector has faced more challenges than many others, but its size remains significantly out of kilter with its share of deals (4.7%). Surely, it can’t continue?

The Transfer/Payments sector is an increasingly varied entity and entered our Top 20 sub sectors in 2023. From the likes of traditional giants Mastercard to the online establishment such as PayPal to the plethora of foreign exchange (FX) cross-border payment providers, the sector provides a rich seam to mine.

With car ownership becoming less of ‘a thing’, our final bet is the Rail & Road sector which offers an increasingly wider range of travel options such as trains, buses, ride-hailing, e-scooters and rental cars. It sneaked into the Top 25 in 2023 as this highly competitive sector bodes well for sponsorship.

Key selling trends for 2024

Just four sectors accounted for 50% of sponsorship deals in 2023, so the challenge for rights holders in 2024 is to look beyond the usual suspects and start targeting and enticing different sectors – particularly large ones who do relatively little sponsorship such as retail, IT, telecoms and real estate.

Social Impact (or to be seen to be doing good) has risen in a relatively short period of time to become the second most popular reason why sponsors say they’ve done deals (at nearly 1 in 5). So, this is clearly an element to be making more of a play of when pitching – either as the thrust or a key component.

Rights holders still think too short term. For instance, we’re often (a) asked to help find sponsors for events three months’ out or (b) told ‘our portfolio is full so we’re not going to do any outreach for a while’. Sponsors typically plan 12-18 months ahead so rights holders need to operate in this timeframe too.

The initial approach/pitch needs to be much more focused around a specific business objective or challenge the target firm has which can be addressed through your rights. Rights holders need to take a ‘less is more’ approach both in the number of targets approached and the volume of info initially provided.

Our full 2024 sponsorship sales predictions report also contains related links to caytoo’s 12 brands to watch in 2024, our 12 sponsorship deals picks of 2023 and the 2023 annual review of all sponsorship deals.