The total global sponsorship spending for this year is
projected to be around the US$ 58bn mark compared to the estimated US$48.6bn
five years ago. A significant chunk of this cash stems from the oil- rich GCC
states particularly the major airlines and sovereign wealth funds of the UAE
and Qatar which leverage lucrative sport sponsorship contracts in order to build
global brand equity.
According to some estimates, the UAE’s two major airlines,
Emirates and Etihad are spending roughly $250 million between them on sports
rights annually. According to various studies, Middle Eastern sponsorship today
accounts for almost a fifth of sponsor spending in the European football leagues.
But as the price of oil continues to be under par compared
to the recent past sponsorship dollars are likely to be viewed under a much more
austere eye as marketing budgets across the region shrink.
And while the likes
of Emirates can sustain this level of funding indefinitely and irrespective of commodity
price fluctuations, other corporates or SME’s active in sponsorship deals or
planning to pursue similar strategies must already be thinking twice before
committing marketing budgets towards sponsoring any sporting, cultural or CSR
activities.
But how can companies and their CFO’s be convinced to invest in CSR or other sponsorship activities without being able to translate their investment into tangible returns? Follow the link for the full Gulf News article to find out.
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