Question: did the sponsorship industry grow or decline last year and this year? To the surprise of many, it grew. Not bad considering the world had just suffered the worst financial downturn since the Great Depression.
In many respects, the financial crisis that started in 2008 could not have come at a better time for the sponsorship industry. Any industry can grow during the good times. Sponsorship grew by 3.9 per cent last year and has been forecast to grow 4.6 per cent this year and beyond, according to IFM Sports Marketing Surveys. This is favourable compared with the advertising industry, which declined by 10.2 per cent last year. However, the sponsorship market is still a comparative minnow, worth about US$44.4 billion (Dh162.61bn) compared with advertising's $421bn last year.
The good news for sponsorship is twofold. First, the sponsorship industry is driven by the passions of people. These fans - fanatics even - are the same people who drive brands and businesses. Second, sponsorship is content and content is king - particularly today. When you are inside the content, it's difficult to take you out.
The internet has helped sponsorship enormously. Take a look at the this year's Indian Premier League (IPL) and Google. According toThe New York Times, 50 million viewers tuned in to YouTube's IPL channel this year. While this was 25 per cent more than Google predicted, the exciting part was that about 40 per cent of the viewers were outside of India. Many may question the IPL founder Lalit Modi's best corporate practice but his marketing skills are not in doubt.
For sponsors, YouTube's figures are gold dust. The web has potentially changed the rules of the game. It brings reach, accountability and evaluation in one quick fix, as well as delivering a direct line for sponsors into the hearts and minds of fans.
In the Middle East, there is a shift in sponsorship occurring. Traditionally, it has been a "patronage"-based marketplace: sponsorship originating within the corporate entourage of a Royal Family member and his or her passion for an event, activity or team.
Patronage is " sponsor-funded content" in every sense. It is about supporting a community and a very pure form of corporate social responsibility, both of which are now widely regarded as important components of international best-practice sponsorship. When patronage combines with the multi-dimensional sponsorship, the recipe is compelling.
New sponsorship announcements continue: HSBC Bank is sponsoring the Abu Dhabi Golf Championship and the Abu Dhabi Art Fair; and Barclays Bank is partnering Al Jazira Sports and Cultural Club to sponsor its football team. These are both examples of sponsorship and patronage combining. Both international banks have identified Abu Dhabi as a key commercial market. They are placing their brand and people at the heart of Abu Dhabi content. They will also bring best-practice activation and help Abu Dhabi's development.
The Al Jazira deal is particularly noteworthy. You cannot argue with a marketing campaign that brings people and brands into play. Other local rights holders are probably taking note of Phil Anderton, the chief executive of Al Jazira Club, and his football team's approach. The challenge is to turn this into income but if you attract the numbers (28,164 for the match against Al Wasl), you'll attract the sponsors and the commercial wheel will start to turn a lot quicker.
In the coming weeks, we are likely to see a new list of sponsors announced at Ferrari World Abu Dhabi. This will be about content-based partnerships with the Middle East's newest tourist attraction. If the industry rumours are correct, Ferrari World has done well in a difficult market to convince several local brands and international partners to participate. The Ferrari brand gloss will have helped.
All the companies involved have identified the opportunity to be the first to be associated with an attraction that will bring tourists to Abu Dhabi - from Dubai, the GCC and around the world.
The Gulf's marketing industry is still dominated by print and outdoor media. Radio is holding its own. Television is working out where it begins and ends with the internet, while web marketing is still in its infancy compared to the rest of the world. All this suits the needs of the advertising agencies.
Sponsorship has been considered too complicated and too much like hard work as it is multi-dimensional and collaborative. Advertising is far more linear. Sponsorship and advertising, however, are not mutually exclusive. They are two sides of the same coin.
Of the top 100 big-spending advertisers in both Saudi Arabia and the UAE this year, about 20 per cent have professional, integrated sponsorship campaigns. Of these, most are international brands, many of which are delivering global sponsorship platforms. The equivalent European or North American lists show more than 50 per cent, occasionally 65 per cent, have such campaigns.
The real opportunity for sponsorship in the region is converting Arabic brands and family conglomerates from patrons to sponsors. One company that has taken this route is the Al Naboodah Group in Dubai. As the sponsor of the Abu Dhabi Golf Championship as well as this year's US Open champion Graeme McDowell, it is using golf as a tool to build its business and brand value both locally and internationally. It is professionally done and in-house. The heritage may be patronage but the application is best-practice sponsorship.
The premier Arabic sponsorship league consists of Aabar Investments, the Abu Dhabi Tourism Authority, du, Dubai Duty Free, Emirates Airline, Etihad Airways, Etisalat, Gulf Air, Mubadala Development (a strategic investment company owned by the Abu Dhabi Government), Qatar Airways, Saudi Telecom (STC) and Zain. They may be in the minority with integrated sponsorship campaigns but the signs are that the potential for growth is excellent.
If I were an executive in an advertising agency in Dubai, I would be most worried about one global announcement this summer: Procter and Gamble (P&G) became an IOC TOP Olympic sponsor. One of the world's biggest advertisers has chosen to take a major ad budget and place it into a sponsorship with no media exposure, as the Olympics are clean from any brand - although there are plenty of commercial partners and public body funders. However, a great strategic move for P&G and their ad agencies will benefit from some of the activation.
Brands in the Middle East are starting to embrace sponsorship without any traditional gate-keeper advice. Rights holders understand that both activation and delivery is required to win and maintain partnerships, given the decline in pure patronage. There is a lot of opportunity - and it's all thanks to the financial crisis.
Jamie Cunningham is the founder of the Arabian Sponsorship Forum, which returns to Abu Dhabi on December 8 and 9. For more information, log on to www.arabiansponsorship.com.