Looking Back at a Year of Change
Written by Sophie Morris, Director of Millharbour Marketing (now Sponsor View) and an ESA Board Director. First published by ESA on sponsorship.org
At the beginning of every year, ESA asks its members what they think the top three trends will be for the year ahead. These responses are then combined to produce the top 10 market trends. In 2020, at the turn of a new decade, members were asked what the trends would be to ensure continued growth for the decade ahead.
However, with the COVID-19 pandemic causing global lockdowns, by March 2020 it was clear that those trends were likely to have changed, and so members were surveyed again and asked what key trends would define the way in which the sponsorship industry would recover. The research was repeated in October 2020, to track how those critical factors changed in reaction to the evolving pandemic situation.
With the regular annual survey at the beginning of 2021, ESA can now report which trends will be the critical drivers of recovery for the year ahead, and track a full year of how recovery trends changed.
1. Digital Activations & Events
Digital has stayed firmly in 1st place throughout the pandemic, which was inevitable really, as audiences stayed at home and the only way to reach them was online. Organisations who didn’t already have digital platforms had to work quickly to build them. Others who had platforms, but used them primarily for community engagement, now found them to be their main activation channel and only way of continuing to deliver sponsors’ rights.
You’ll notice that the trend label has changed in the various waves – this reflects the evolving meaning of the responses. Initially it was quite broad, as everything moved online in the strictest lockdown phases and before it was clear quite how long restrictions would be in place and what the longer term impact of the pandemic would be. As lockdowns extended, we saw more references to digital activations and, in the latest round, more mentions of digital events too.
2. Community & Cause
Another trend that has evolved over the last 12 months is Community & Cause-based Sponsorship. In Jan 2020, Sustainability and Brand Purpose were distinct trends. Sustainability entered the top 10 market trend list for the first time in January 2020 and went straight to no. 1.
Also, quite remarkably in the first wave affected by COVID-19, April 2020, Community & CSR re-entered the top 10, having been the No. 1 trend in 2019, but not appearing at all in the first report of 2020. Individuals perhaps felt more connected to their community – looking out for each other – and organisations understood their role in helping the community, whether that was simply reinforcing health and safety guidance, or reaching out to those most vulnerable to deliver essentials and provide a welcome face (at distance) to those most isolated.
In October 2020, equally impressively, as it became clear that the pandemic was going to have a long-term impact, Community & CSR stayed in the top 10, at position 5. This time, Purpose and Sustainability seemed to be consolidated into Community & CSR, rather than being distinct. This trend evolved again in the latest round to Community & Cause-Based Sponsorship. The strength of this trend will be reassuring to those companies who had this at the top of their agenda prior to COVID-19.
Measurement is intriguingly stable in 3rd place, only dropping out of the top 10 in the immediate reaction to the COVID-19 breakout as, understandably, other elements took priority.
There are many market research reports that show measurement is only confidently carried out by a small percentage of sponsors. The reason why is less well known, but could be that people don’t know what to measure, how to measure, or because it is perceived to be too difficult, time-consuming or expensive to measure.
It is clearly of continuing importance and comes under increased scrutiny when budgets are tightened.
4. End of lockdown restrictions
‘Audience in venues’ was a new trend in October 2020 and sounds like an obvious inclusion, but, when this question was asked in April, there was perhaps the perception that the lockdown might only last a couple of months. The situation of when audiences can return to venues and when they will want to, has been very uncertain since then. This increases the uncertainty for rights holders, venues and sponsors, particularly if agreements need to be renewed, but it cannot be said for sure on what basis they will be able to be delivered.
The trend evolved slightly in January 2021 to specify the easing and end of restrictions and the impact of vaccinations, which will all contribute to the return of audiences to events and venues.
Innovation is another trend that appeared in January (combined with Digital Transformation), then disappeared in April. It has come back in October (in position 6) slightly lower than it was in January 2020 (4th), but we have seen a lot of innovative initiatives in new collaborations and content, as companies have had to adapt and build new platforms in order to still deliver to their partners and audiences.
Innovations which were being developed and planned for future release, were accelerated through necessity, as well as through the time available whilst events were on hold. It will be future waves of this research that will show the result of this increased pace of innovation and what effect that will have.
6. Content & Social Media
Whilst Content & Social Media could overlap with Digital Activations, it is a distinct group in the responses received, first entering at position 10 in October and rising to position 6 now, as organisations build longer term content and social media plans, not just interim fixes. As with Digital Activations, this trend was, for some, used previously only as a broadcast tool, while it is now a more fundamental part of engaging with audiences and delivering value to sponsors as other channels and events are not available.
Flexibility remains in the top 10 at position 7, having entered in April in 5th and rising to 4th place in October. Flexibility was critical in all sponsorships that were affected by the pandemic. The first wave of the ESA Sponsorship Sentiment Tracker in April 2020 showed that in those early stages 72% of brands were looking to extend sponsorship rights and 48% planning to add new assets to fulfil sponsorship contracts. Both of these required flexibility from rights holders and it appears that simply extending sponsorship contracts for another 12 months was a common solution.
Flexibility was required from all parties with payment flexibility also being a prevalent theme.
Esports saw a huge rise, from 10th place in January 2020 to 3rd in April. Existing online Esports events fared very well as other sporting events suddenly stopped. Those who could move quickly also jumped into this space, with either a permanent product or a substitute, while their live sports were on hold. As a result, sponsors also looked at Esports with more interest as one of the few remaining ways to reach their audiences with a live experience.
Esports has dropped down since, which could be because rights holders are expecting their sport to return soon and perhaps can’t resource both, seeing it as an alternative though not a replacement, or just because other trends are taking priority. It was expected that 2021 would bring a clearer picture to the recovery roadmap and that the position of Esports would be a trend particularly affected by the return of live events, but, with new coronavirus variants bringing new uncertainty, Esports seems to be set to stay as a key trend for the time being at least.
9. Better Sponsorship Relationships
Better Sponsorship Relationships came straight into the top ten list at number 4 in April 2020. Many sponsorship relationships will have been strengthened as a result of needing to work better together, being more empathetic of the other party’s situation, and seeing the opportunity to collaborate on meeting the needs of the shared audience.
But many sponsorships will have also had critical flaws in the relationship brought to the surface and conversations around honouring agreements that were tense. At the time of writing, there is still uncertainty over when many events will return, under what circumstances, and with what sponsorship rights still able to be delivered.
Whilst this trend has dropped down the top 10, perhaps as the need to improve relationships has been recognised, strong relationships will remain critically important for managing that uncertainty to achieve the best possible outcomes for both parties. Those relationships that were handled well at the start will now be much stronger as a result and those taking proactive steps to strengthen their relationships will be able to recover from any issues highlighted at the beginning of the pandemic.
Creativity was in 8th position in April 2020, before dropping out in October and returning in 10th place in January 2021. Creativity has been seen by many to be paramount when faced with so much content being distributed through a concentration of channels and, when events return, the saturation point will be quickly reached. Creativity has been necessary in maintaining engagement without live events and will also be key in standing out from the clutter of content when restrictions are lifted, all venues re-opened and events able to go ahead.
The ESA Annual Sponsorship Market Trends research will continue in January 2022.