Yesterday, we looked at the growing U.S. TV audience for soccer and the opportunities this provides to sponsors and advertisers.
Today, let us look at the financial dimensions of sports sponsorships for the 2014 World Cup in Brazil. Although the investments are huge, it is not clear that they are always the best expenditures of marketing dollars.
According to McKinsey’s Jeff Jacobs, Pallav Jain, and Kushan Surana:
“The Fédération Internationale de Football Association (FIFA) stands to make $1.4 billion from sponsorship deals with 20 major companies during the World Cup in Brazil. That’s 10 percent more sponsorship revenue than from the last World Cup, in South Africa. Although significant, that’s still far below U.S. corporate spending on sports sponsorships, which grew to an estimated $20 billion in 2013 — equal to one-third of total U.S. television advertising and one-half of digital advertising.”
“Considering the huge amounts involved, you would imagine sponsors of athletes and events have clear answers when asked about their return on investment (ROI). You would be wrong. Industry research reveals that about one-third to one-half of U.S. companies don’t have a system in place to measure sponsorship ROI comprehensively. And that’s costly in another way: in our experience, executives who implement a comprehensive approach to gauge the impact of their sponsorships can increase returns by as much as 30 percent.”