Looking ahead: Could these 5 brands emerge as sponsorship saviours in 2023? 🔮
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Looking ahead: Could these 5 brands emerge as sponsorship saviours in 2023? 🔮
Using a crystal ball and all tricks of the trade I can remember from my time as a Research Manager, I’ve taken a look at 5 brands that I believe could enter into numerous sponsorship deals in 2023
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Globally, $57 billion is spent on sports sponsorship, a figure estimated to rise to $90 billion within five years, according to McKinsey & Company.
Much of the new spending in 2022 came from two sectors: crypto and direct-to-consumer brands (like Getir or Cinch).
However, with the high-profile collapse of FTX and significant global inflation leading consumers to cut back their discretionary spend, it is less clear where new brands will emerge from this year.
Using a crystal ball and all tricks of the trade I can remember from my time as a Research and Insights Manager, I’ve taken my shot - pointing to five brands that I believe could enter the sports sponsorship scene this year.
1. Electric Vehicles: VinFast
VinFast, an electric carmaker which is backed by Vietnam’s richest man, recently received permission to sell its EVs in the US ahead of its planned initial public offering (IPO).
The electric vehicle (EV) market is booming and the US accounts for 10% of global EV sales. VinFast aims to capitalise on this growing appetite. However, as a foreign brand entering the US market, they could look to sports properties to raise their brand awareness and build trust with consumers.
Traditional automotive sponsors are also likely to double down on their commitment to electric within their sponsorship activations in 2023. It may prove to play an important role in where they choose to spend their money, too. SponsorUnited reported that 2022 saw brands vie for more purposeful and emotional attachments with consumers.
2. Enterprise Software: Databricks
Another brand planning to IPO this year is Databricks, a Cloud-based Data Engineering tool that is widely used by companies to process and transform large quantities of data and explore the data.
Brands such as Airbnb, which signed a $500 million Olympic sponsorship deal and Darktrace, who became the ‘official AI Cyber security partner of McLaren F1, are prior examples of companies that have used sponsorship to increase their brand exposure and to improve public perception ahead of an IPO.
Like Darktrace, Formula 1 would seem a particularly natural fit for the company – though nearly every sport now claims to be data-first.
3. Generative AI: JasperAI
As JohnWallStreet wrote previously, generative AI could become sports’ Next Big Sponsorship Vertical as they are attracting a lot of “VC and PE attention.”
Jasper AI, for example, raised $125 million at a $1.5 billion valuation in October.
Generative AI refers to artificial intelligence that can generate novel content such as text or images, rather than simply analysing or acting on existing data. Though awareness has been heightened by the rise of Chat-GPT, generative AI companies are still in the early adoption phase.
“Everybody's building on the same foundations, the same models, and they're trying to say how they're going to be different, but the reality is they are going to be differentiated on customer acquisition,” explains Shaan Puri, co-host of the My First Million Podcast (at approx. 52 mins). As a result, these companies are “pouring millions into marketing to get customers.”
4. Health & Wellness: Oura Health
Fuelled by an increased interest in health and wellness, a growing fascination with sleep, and greater availability of technology, the wearables market is expected to reach $118 billion by 2028, according to a recent industry report.
The Oura Ring, which dubs itself ‘The World’s Best Sleep Tracker’ is one company that is benefiting greatly from this. The Finnish company, which provides personalised sleep and overall health insights, has grown rapidly over the past five years – witnessing a 3850% in search growth in that time.
The company did announce a partnership with Red Bull Racing in 2020 to help track the team’s performance, wellbeing, and recovery. However, 2023 could prove to be the year that they really expand their presence within sports sponsorship, particularly given the clear narrative a partnership with a professional sports team or athlete offers them.
5. CBD: Charlotte’s Web
The global CBD market is expected to reach $22 billion by 2030. Increasing adoption of CBD infused products in various industries such as personal care, pet care, and cosmetics, along with its medical applications, is expected to drive the market. This has caused an influx of celebrity investors, from Jay-Z to Travis Barker.
For CBD brands such as Charlotte’s Web, which is the leading CBD company in the US despite holding only a 2.27% share of the market, sports sponsorship or athlete endorsements could provide the perfect opportunity.
For all the progress of the industry, old misconceptions linger on. A study published in 2019 found that two-thirds of participants believed that CBD was an illegal substance. Sponsorship has a real opportunity to educate these people on its benefits.
Furthermore, in February of 2022, the NFL awarded $1 million to study the impact of cannabis and CBD on pain management. This has come on the back of former players taking ambassadorial roles for CBD brands, increasing the conversation around athletes’ use of the product.
What do you think? Let me know what brands you are bullish on entering the world of sports sponsorship in 2023 in the comments or replies.
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