MEC Forecasts Rise in Sponsorships

NEW YORK Thanks to the recession and criticism from U.S. Representative Barney Frank, the sponsorship business has been under a cloud for most of the year. As a result, a number of companies have cut back their activities in the sector or pulled out altogether.
 
But today, Mediaedge:cia, the WPP media agency, is issuing a report -- supported with data from sister sponsorship consultancy arm IEG -- that forecasts significant global growth in the sector, despite the economic downturn. As for the political fallout, MEC executives say it's unfair and shouldn't deter clients from embracing sponsorships as part of their overall marketing mix.
 
At a time when ad budgets are shrinking, the report predicts that spending on sponsorships and related activity will climb worldwide by 15 percent this year to $44 billion and by a little more than 2 percent in North America to roughly $17 billion, per IEG research.
 
Sponsorships came under fire in February when Rep. Frank, chairman of the House Financial Services Committee, lashed out at Northern Trust for allegedly spending "millions of dollars on a PGA golf tournament sponsorship and associated parties" after accepting $1.5 billion from the Trouble Asset Relief Program.
 
Though Northern Trust strongly denied that any TARP money was used to support the sponsorship, Frank said that the financial firm's sponsorship activity "demonstrates extraordinary levels of irresponsibility and arrogance" at a time when the recession was hurting consumers in many ways.
 
Frank's missive, MEC believes, unfairly tainted the sponsorship business. In the ensuing months, Wachovia took its name off a PGA title sponsorship for a tournament in Charlotte, N.C., while Morgan Stanley said it would cut back on entertainment during a tournament it sponsors.
 
"We think it's unfair," said Jon Levine, svp, MEC Access, the agency unit that houses its sponsorship practice. "Sponsorships are clearly under the microscope and it's politically charged." It shouldn't be, he said, arguing that sponsorships are "not any different than an ad campaign and constitute a key and significant piece of the overall communications mix."

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