Three Things We Know For Sure And Some Questions From The 11th CSLS
December 1st, 2017 | Norm O'Reilly and Elisa Beselt,
The Canadian Sponsorship Landscape Study (CSLS) has entered its second decade and continues to tell stories about what is happening in Canadian sponsorship on the ground. Since 2006, we have more than 3,700 responses from Canadian sponsors, properties and agencies about the trends, investments and challenges they are facing.
Over the years, we have looked in-depth at professional sport, women in sponsorship and music sponsorship. We have written academic papers on sponsorship servicing and trends. We have produced white papers on a range of topics, including property activation, branded content and the evolving sponsorship model. CSLS has been presented more than 30 times at conferences across Canada – in English and in French, including 11 times at SponsorshipX (formerly CSFX and the Canadian Sponsorship Forum). On many occasions, we have been asked by a league, a brand, a national sport organization or a sporting club to present at their AGM, a webinar or a lunch & learn. We have presented to the Sponsorship Marketing Council of Canada (SMCC) – a partner on the study – in a variety of formats on 7 occasions and the Association of Canadian Advertisers for each of the past four years.
Like any annual study that has existed for as long as CSLS has, results tend to become less “shocking” or “attention-grabbing” over time. However, as data is compiled year-over-year in the same manner, they become more informative, more reliable and trends can be observed. This is particularly true in the case of an industry study like ours, without a large budget to collect data and with a convenience sample. Thus, although the data is far from perfect, as each year goes by, it becomes more useful in informing the sponsorship-related decisions of sponsors, properties and agencies.
The next few paragraphs of this paper will delve into a few areas – and only a few – of the results of CSLS No. 11, with particular attention to sharing a few details about things we have learned, as well as some major questions that remain (i.e., things that we don’t know yet).
First, let’s discuss three areas where we know lots about and where good learning has happened. Then, we’ll present three areas where a lot of uncertainty remains.
Well, probably the most impactful thing about CSLS No. 11 is the result of $2.99 billion – yes BILLION – in spending by Canadian sponsors on sponsorship. Comprised of an estimated $1.96 billion in rights fee investment, plus $1.03 billion in activation, this number has been growing (with a couple stagnant years around the recession of 2009) since we started the study. We expect that in the 12th annual version, we’ll break the $3 billion mark.
So, what does this mean? It is just a number. First, it keeps us “in line” with IEG estimates of spending on sponsorship in the United States and North America, particularly around growth numbers (IEG estimates about a 4.5% growth rate right now). Second, it emphasizes that sponsorship is important and key to Canadian businesses, where sponsors (those who do sponsorship) estimate spending between 20% and 25% (depending on the year of CSLS) of their marketing communications budgets on sponsorship. Third, and perhaps most importantly for all of us, it continues to show that sponsorship “works.” Yes, there are limited studies academically and professionally (public ones anyway) that show clearly sponsorship is impacting consumer change. However, the best evidence is often that organizations are increasing their investments.
Focus On Consumer Passions, Engagement And Brand Building
IMI International, a CSLS partner from Day 1, has always provided us with a secure web platform from which to collect sensitive data. They have also provided input on the style and questions in the survey. One major CSLS improvement in this regard was in 2014, when we added a series of new questions for sponsors around their sought after objectives, areas of benefit and other particular outcomes of their sponsorship programs. We now have three years of data on these questions, which show us that sponsors are very smart in how they use sponsorship and for what goals.
Evidence of sponsorship being used for “non-business” reasons (e.g., personal interest of CEO, access to event tickets) is very low and declining. The use of sponsorship for the reasons it should be used for – reaching your (potential) consumers in ways that link to their passions, engaging your (potential) consumers in places where they are and want to be and by associating to things they care about/do, and building your brand through creative activations – is high and increasing. And, this is an area where the academic body of literature shows that sponsorship is highly effective. Bottom line, this is a good sign for our industry in Canada.
Unequivocally, the most interesting trend in CSLS over the past few years has been the rise of “branded content” or “owned properties” in Canadian sponsorship. Respondents tell us that this is an area where they see great returns, strong activation, and future potential. In laymen’s terms, branded content refers to the ability of sponsorship to provide a clean platform from which a sponsor (or an agency for a sponsor) can implement and activate a sponsorship in a way that clearly allows for all the great things we mentioned in the last paragraph to happen.
A key element of branded content is its link to digital and exclusivity. For digital, branded content in the online world is increasingly important and – via a well-organized sponsorship – allows for sponsorship activation to happen in areas of new media. Sponsors tell us exclusivity is most important here, as they can brand the content as theirs with no competitor in sight and activate as they want (which is often limited when they sponsor other properties in a more traditional way).
The Never Ending Disconnect
Sponsors and properties are not on the same page when it comes to sponsor servicing. Each and every one of the 11 CSLS studies has uncovered this finding, and we did a deep-dive one year that supported it. Quite simply, properties think they are doing a decent job of servicing their partners, but their partners (sponsors) tell us they are not. If we ask sponsors specifically about the “importance” of what they want and the “actual” provision of that from their partners, we see the following:
As the graphic outlines, on many elements of sponsorship servicing (widely accepted ones), importance is not being achieved. Properties (and their agencies) need to step up their service efforts.
Similar to the service disconnect, we are still observing negative views on ROI between sponsors and properties. This is further exasperated by finding that ROI is the no. 1 thing (by far) that keeps sponsorship stakeholders “up at night.” Sponsor’s evaluation of their ROI satisfaction with sponsorship is much lower than what properties tell us that they think their sponsors’ ROI satisfaction levels are.
As the large gaps between the lines in the graphic above outline, this is an area of sponsorship in Canada that needs addressing.
The final point we’ll make and the last addressing “what we don’t know.” The study is becoming more and more Ontario-centric in its sample over the years. Now, we are not sure whether this is a sampling frame change/challenge or whether it is indicative of the fact that much sponsorship is national in scope and agencies are largely based in Toronto (as are corporate headquarters), making Ontario the home to “most” sponsorship. A future study needs to figure out what is happening west of Thunder Bay and East of Cornwall.
Elisa Beselt has been a co-author of the annual Canadian Sponsorship Landscape Study for over five years, playing a critical role in shaping the shared knowledge of the Canadian sponsorship industry. At T1, Elisa’s analytical and strategic development skills have allowed her to lead some of the Consulting team’s largest and highest profile projects. She works on both sides of the table to ensure properties and corporations reach their overall marketing and business objectives through sponsorship. Specializing in sponsorship analysis, strategy development and research, her clients have included the Habitat for Humanity Canada, Ottawa Sports and Entertainment Group, and Nike Canada.
Dr. Norm O’Reilly
Dr. Norm O’Reilly holds a PhD, is a Partner of T1 Consulting and Chair of the Department for Sports Administration at the Ohio University College of Business. In his spare time, he’s published hundreds of Sports Marketing books and articles. Norm is recognized internationally as one of the foremost scholars on sport business, sponsorship and marketing strategy. He leverages his academic experience as a senior advisor to the T1 Consulting Group.
Want to know more about the CSLS? ACA members can view Norm O’Reilly and Elisa Beselt’s presentation