I am going to ask you the same question I asked last year at this time. Did any of your predictions for 2021 come true? How about those resolutions—how did they work out? Quite the year has passed once again—not really what we expected—at least not for most of us. I thought I would ask these questions before I gaze into my 2022 crystal ball and see what’s in store!
This time last year, on December 31, 2020, I made three predictions for 2021. They appear below (with my editorial of accuracy by the end of 2021 in red)! These are abbreviated versions, but you can go back and check out the full details here.
Predictions for 2021
- The way our world looks today is here to stay for a while, probably through mid-2022. Many predicted the “return to normal” for June or July 2020, but that has come and long gone. Reality check—the settling of our economies, trust in face-to-face interactions, return to travel and events without fear, opportunity to sample freely and engage onsite without fear are all aways off. The “return” to a “new normal” will not happen in 2021. We will move toward it, but it will not happen until at least June 2022. I still stand by this, at least until June 2022!
- We will see many more casualties in 2021. More leagues, events, properties, charities, and non-profits will close their doors (just like restaurants, stores, etc.). I believe we will see two spikes in these losses, first around April 2021 when the slow winter will put the nail in the coffin of many organizations as they run out of funds with no ongoing revenue. The second will come in the fall when we have a second summer of downsized travel, existing fear, and issues around vaccines and taking them. This second-round of 2021 casualties will erupt in the fall after another slow summer. Both became reality, unfortunately. In April 2021, we saw charities merge, others close down, sports programs fold from a weak economy in Q1. Also, it was the start of the 4th wave and by summer and into fall 2021, we were in the thick of the fourth wave seeing more issues in several provinces. There was a return to some sponsored events (CFL, Stampede, festivals), but those all had effects on health and created controversy. Thanks to vaccines, we had fewer hospitalizations (other than a few provinces once again) but the issue for businesses and events was that people were not ready to return to work. Either the federal dole-outs made it silly to return to work or people were just not comfortable returning. Hence, the further stall of return normalcy for the economy and our sector.
- On the bright side, we will see continued innovation and creativity. I think we will see sport organizations and leagues amalgamate to form stronger smaller combined entities. We will see the same in the non-profit and charitable sector with combined missions and visions to make sure no one is left out in the cold, but now through fewer larger organizations rather than many small organizations (almost like Darwinism). This will allow brands to funnel larger amounts of dollars to fewer organizations with more impact for both the properties and the sponsors. Innovation and creatively will continue to develop (as it has in the last nine months of 2020) in areas of sponsorship activations and brand exposure. Technology will be paramount. This too (3 for 3) became reality to some extent. We have seen innovation become paramount. We have seen corporate budgets shift from the many to the few and we have seen some amalgamations. The hope is that this bright light of continued creativity and innovation will continue into 2022.
I was lucky again. It continues to look like I should be reading tea leaves and horoscopes for a living! If we look at the true signs and indicators (and stop listening to politicians telling us what we want to hear), then we should be able to make fairly accurate predictions. Understanding that at the close of 2021, oil had approached $80 a barrel in Q4 should exceed that threshold again in 2022. Unemployment is at the same level as it was pre-pandemic. We saw record levels for the TSE, although late year dipping and sell-off was expected as a correction combined with Omicron, but we are still ahead.
All this leads to predictions of a future strong economy, although we will continue to have an inflationary effect on our spending dollar and instability early in Q1 due to Omicron. This means that brands will have to continue to build deeper relationships with consumers, and brand loyalty will be essential to that growth. That is where sponsorship marketing is the master!
The Canadian Sponsorship Landscape Study. It showed that less than 18% of industry respondents felt the pandemic was still a major concern. It went on to project that over 1/3 of industry respondents feel that sponsorship dollars will rise, brands will look to get closer to their audiences in a more meaningful way, and experiential marketing like sponsorship is that channel for them! A group of industry pundits even forecasted that sponsorship associated with live events will grow in 2022!
What can we expect in 2022? I will be simple and straightforward. Here are my three predictions.
- By fall 2022, we will be back on track to operating sponsorship programs at pre-COVID levels. That means festivals will resume at full capacity, face-to-face (versus virtual) galas will be back in vogue, as well other events and experiences such as conferences and fundraising events that are associated with sponsorship. Professional sport will return earlier (as it already has in Q3 and Q4 2021 before some Omicron pull backs late last year), and our amateur and collegiate sport worlds will return to pre-COVID numbers of participants and events by fall 2022. There will still be some trepidation still in summer 2022 on the part of both event planners and the public. Until we pass summer 2022, there will be some holdback. That is why the real measuring stick will be September to December 2022.
- The “return to normal” by fall 2022 will not be a “return to pre-COVD normal,” but will be the “new normal.” Our new world, for the successful organization—and we are already seeing this with pro sports and others—will have integrated considerably more technology. It will integrate the virtual world and the digital world into everyday programming, and sponsorship will need to retain these features. Where we could produce a play and broadcast it to people outside our market who pay to attend and enjoy will be an important element for sponsors versus just reaching the 500 “bums in seats” each night of the “personal experience” production. (This goes for galas, sporting events, conferences, etc.) What we did during COVID that worked for sponsors will need to remain. Those that retain these learnings and engage them going forward will reap the rewards of additional revenue, while others that plan to return to “the pre-COVID world of assets and engagement” will be bewildered why there are no dollars for them.
- By the end of 2022, we will see sponsorship agreements include many more measurable ROI elements. Sponsors will demand metrics and accountability. With the use of new technology and the March 2020 to fall 2022 experiences, there is enough technology to deliver substantially better ROI. With a shift to digital experiences integrated with live on-site, we know digital metric delivery is tantamount. Sponsors will demand more overall for their dollars, but they will be willing to spend more with those that can deliver results. There will be an accelerated shift to ROI for sponsorship investments even greater than after the 2008-10 recession. There will be a move from “philanthropy” style sponsorship to true sponsorship marketing. Brands have given unconditionally during two years of COVID and now they will need to get ROI for those gifts. Properties will need to be prepared to deliver results and to be good negotiators.
Thank you for your continued support of the Tuesday Morning Commentary (TMC) over the past year. May 2022 bring you and yours health, happiness, prosperity, and a speedy recovery from COVID-19.
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