Unlike most years when I recap the “year that has been” in the last TMC of the year and forecast the future in the first TMC of the New Year, I have changed it up. Last week, I looked at Boxing Day, and presented some thoughts and insights on corporate partner thank-you options! So, this TMC will double up, looking at the year that has passed and what to expect in 2024.
2023 was a different but fruitful year. The experiential world really “came back” after two years of COVID and a year of transition. Especially, festivals, conferences, conventions, events, and concerts rode back in like a tidal wave! Many of these events set, or came close to setting, attendance records. People had reached that point where they were ready to socialize once again and not let COVID scare them anymore. There are still mask, cleansing, and precautions, but we have learned to live our lives and experience life once again rather than be afraid of it.
What we did see, though, was a transition of dollars. As with most “post economic impact” episodes, e.g., 1988, 2001, 2008, and 2015, there is a pull back on funds and heightened focus on ROI! And we saw it again. This time, though, it was not necessarily a decease in corporate sponsorship spending overall—just how it was allocated. Many sponsors shifted from several partners to fewer with more money going to those they selected. So, where a firm may have had 20 or 200 properties, they split their $500,000 or $5 million across fewer partners (say, 15 or 150) that each got more. This was further exacerbated by a historic increase in asks/proposals of corporate sponsors in 2023—more organizations “littering the marketplace with stock packages” and hoping something would stick to the wall versus focused and customized packages that deliver measurable ROI for partners!
In addition, 2023 continued to see rising interest rates, but the looming recession never came to fruition, as spending continued to increase. As minimum wages increased to record levels across the nation plus union breakouts on new contracts setting unprecedented agreements from companies flush with profits, more and more dollars flowed into the hands of individuals, allowing them to continue to increase spending resulting in continued rises in interest rates to control escalating inflation rates. This meant more spending power for concert tickets, sports events, theatre, and festivals, etc., which in turn yielded better ROI for sponsors in 2023—at least for the ones that activated and managed their sponsorships correctly.
With all of that in mind, what can we expect in 2024? We foresee these five key benchmark outcomes for 2024, which are really very similar to 2023!
- Technology will again continue to have the biggest impact on our sector. With more and more automation and use of AI in the marketplace at reasonable investment rates (hopefully), we will see the sector finally begin to engage with technology in a much larger way. We will see more use of AR (Augmented Reality), as well as QR codes, touchless transactions, and bracelet IDs so that event goers can pay, access, and gather information seamlessly and touch free without delay or congestion. This technology will come about both in signage (digital and static), online, and through activations. Properties and brands that fail to welcome and engage such technology will continue to fall behind.
- Once again, ROI measurement will grow exponentially this coming year. With more technology, there is better tracking. Better tracking means more effective and less costly investment in ROI measurement. This also means a shift to more rights fees being allocated around pay per performance and activation than ever before. ROI measurement will shift from only happening in Tier One and Tier Two properties down to Tier Three and Tier Four properties. Be aware—failure to work with your partner on effective ROI measurement could mean the loss of a partnership.
- Data collection will be part of the technology shift. As more sponsors shift to the use of technology such as gamification, QR codes, AI, geo tracking, big data research, and engagement activations, the focus for brands will be on data collection. Properties have never been allowed to share their data bases, but now, sponsors can build their own data bases from the properties’ most engaged subscribers, donors, supporters, and fans through technology. Through big data collection and analysis, properties can pinpoint sectors and specific brands with all the empirical data they need to show a brand why it should be sponsoring that property. Data is king!
- Due to the shift in demand for results, the shift away from rights fees to more activation fees will create casualties in the sector. Those properties that have continued to rely on their “halo” value or inflated rights fees with little marketing ROI will see their revenues shift away. As happened in 2023 whereby incremental dollars went to those properties that delivered on ROI, many properties will be left out in the cold wondering why they were not supported. The dollars will move to those properties that can deliver results! We saw this happen in 2001 after the dot-com bust, 2008 recession, and 2015 in Western Canada impacted by oil price drops. We saw it again in 2023 and it will continue in 2024.
- Professional development will grow exponentially. After three years of hibernating and member associations too scared to host “in-person” events, the momentum and yearning for knowledge, insights, and content will abound. Late in 2023, we saw record breaking attendance for the WSC®, SponsorhsipX and Prime Time Sport Conference. In addition, we are already seeing member associations such as FCM, FEO, CAEM, CAFÉ, PCMA, CAMA, and others enhancing their 2024 events and integrating sponsorship training into them. Also, the first ever WSC® – Municipal Sponsorship Summit will be hosted next month in Richmond Hill, Ontario.
Welcome to 2024. It will be an amazing ride for our sector.
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