Steadying the foundation for the partnership industry

After decades of growth and investment, the last two years were a stress test for the sponsorship industry.

The pandemic placed relentless pressure on properties, partners, and suppliers. Through these turbulent times all parties were forced to compromise to survive.

Now with the end in sight, the industry has bounced back in a big way.

How the Industry Has Rebounded

Post-COVID-19 the industry has been in a rebuild.

The removal of lockdown policies and capacity limits has re-introduced live events and experiential opportunities.

This has invigorated budgets and the activation spend within them.

Two people building the base of a pyramid, pushing big stones that say events and activations on them

There has been an emergence of new sports and leagues gaining interest among consumers and brands.

Channels and platforms evolved introducing new sponsorable assets, and creating innovative activation opportunities.

This drove more dollars into the space, and created new ways in which they could be spent.

The same two people building the next layer of the pyramid, with stones that say new sports and new channels on them

On top of all this, net new industries such as crypto and gaming (in North America) flooded the market with sponsorship dollars in an attempt to build loyalty and gain a foothold on untapped market share.

All of these changes breathed life into an industry that desperately needed it.

The final piece of the pyramid, called new industries is added. An alien ship puts this piece on, for fun.

THE LOOMING RISK

As the industry grows, the level of investment and expectation grow with it.

This means more money, more contracts, and more complexity.

In isolation, that’s not the problem.

The problem is we don’t trust each other.

The pyramid is sinking into the sand. The sand is labelled trust because that's the foundation that the industry is lacking.

In a recent survey , 71% of tenured sponsorship professionals agreed there’s a lack of transparency in the sponsorship industry.

How can an industry, so dependent on relationships, continue to thrive without trust?

It can’t.

SO HOW DO YOU CREATE TRUST?

Before we can fix it, we have to identify the root of the problem.

This is an industry historically built on handshake deals, emotions, and often times ego.

This genesis never required the shared understanding of the fundamentals needed to work effectively together – including how to price assets and measure value.

As a result, stakeholders use different sources of truth, and some elect to not use any source at all.

This doesn’t create a stable foundation.

Someone digging into the sand, pouring individual grains of sand out. Saying this isn't going to support much.

To protect what’s been created the industry must build a stronger, more stable foundation.

There are three missing pieces.

1) SHARED STRUCTURE

Everybody needs to speak the same language.

By crafting shared definitions of terms critical to the industry, every interaction can start on level ground.

Two people trying to create a consistent level in the sand; one person is not paying attention.

2) TRUSTED DATA

Universally trusted data has the power to simplify decisions, expedite negotiations, and produce better outcomes.

Less guesswork and disagreement frees time for true partnership and collaboration.

Pouring rocks into foundation layer; rocks are labelled data.

3) COMMUNITY

Sustaining long-term advances in any space requires collaboration.

A stronger community would cement relationships, fuel innovation, and promote an overall healthier industry.

Cement truck pouring cement; called community cement corporation

These changes won’t come easy, and we are still a ways off.

The first step is to look within, recognize the challenges, and start the dialogue.

If together we can create shared definitions, rely on trusted data, and build a stronger community, we’ll have shored up the foundational trust that’s needed for the industry to continue to grow.