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The Long-Term Impact of COVID on Sponsorship​

The pandemic has had a dramatic effect on the sponsorship industry. With both major quadrennial sporting events being postponed, most sporting leagues paused and entertainment venues closed, the number of viable sponsorships in the market was greatly reduced. But with lofty budgets at stake, the industry has been forced to adapt, offering greater flexibility and finding fresh ways to activate. 

This has impacted sponsorship in several key ways:

Digital growth: Sponsorship deals have become more digitally focused over time, but last year this was supercharged by the pandemic. Digital channels have proved to be one of the only feasible ways to fill the live sponsorship void at any scale, and are currently still the main way of delivering sponsors’ rights. While reduced-capacity events are set to continue during the recovery from COVID-19, a report by PwC predicts that we will still see growth delivered through short-form content online. 

Shorter terms: The average sponsorship locks brands into long-term deals that can last for multiple years. But with so much uncertainty caused by COVID-19, many advertisers have been unable or unwilling to commit to such terms. This means that rights holders and media owners have been more open to shorter-term sponsorships. 

Diversification of advertisers: The pandemic hit traditional sponsors in travel and automotive categories the hardest, causing many of these brands to step back from sponsorship. With more opportunities available, competitively priced digital sponsorships and greater flexibility on deal length, brands from new categories like fintech and ecommerce have been able to enter the sponsorship space for the first time. 

The evolution of TV:  With the live sponsorship market still on shaky ground, more brands have been turning to TV sponsorship. All of ITV and Channel 4’s big-ticket sponsorship properties have flown off the shelves by their offer deadlines. With audiences now viewing less linear TV, in favour of Broadcast VOD, SVOD and Online Video, it has become vital for brands to acquire TV sponsorship deals in order to have a heavy presence in the best video content (in terms of quality and reach) in the market. While there are still short-term deals to be done, it seems brands are factoring TV sponsorships into their long-term marketing strategies, and are using TV sponsorship to ‘lock, block and own’ key appointment to view video moments.

Purpose driven: While purpose-driven marketing is nothing new, last year unprecedented restrictions on freedom of movement saw many brands pivot their marketing communications to support those most affected. Mondolez used their sponsorship of Arsenal FC to support a local fan-favourite café, whilst the7stars client TSB funded and sponsored a one off special on Channel 4 celebrating Britain's Unsung Heroes. 

Sponsorship will continue to play a pivotal role in allowing brands to get closer to the passions and interests of their audiences. But the way in which the sponsorship industry operates has been irrevocably changed. We predict that many of these changes will be long-lasting as advertisers reap the benefits of an increasingly flexible and wide-reaching marketing channel.