North American companies will spend nominally more in 2008 than they did last year on arts sponsorships, including art museums, symphony orchestras and performing arts venues, according to a report released by IEG.
Corporate arts sponsorships are expected to hit $832 million this year, representing a 3.4% increase over the $805 million that companies spent in the category during 2007, based on IEG’s estimates. Spending last year showed a more significant increase from the $743 million North American companies spent on such sponsorships during 2006.
The current economic malaise in the U.S. is a primary reason for the projected slow growth for corporate support of the arts.
Fallout is particularly anticipated among financial services, which have traditionally been strong arts patrons, William Chipps, senior editor of IEG Sponsorship Reports, said.
“We are hearing rumblings about corporate belt-tightening by companies in the financial services category,” he said.
Chipps noted that airlines and automakers, also typically strong arts supporters, are under disparate financial pressures in their respective business sectors.
IEG also sees more money moving toward sports sponsorships, which are generally perceived to be a better bet because of the broader audiences sports events attract at live venues and on television.
“They draw large audiences. They provide mass exposures, which everyone likes,” Chipps said.
IEG doesn’t anticipate a trend of companies abandoning their interests in the arts, since the category draws a desirable demographic largely composed of affluent decision-makers. And financial services companies continue to use their arts sponsorships as opportunities to entertain clients and prospects.
It also expects companies leveraging their arts investments by selectively offering proprietary benefits to a limited number of sponsors. Toyota Motor Corp.’s Lexus division currently offers complimentary valet parking for Lexus owners as part of its sponsorship of the Adrienne Arsht Center of the Performing Arts in Miami-Dade County.
Companies are also looking to create premiums for their customers and employees through their involvement in the arts. Continental Airlines is activating its partnership with the New Jersey Performing Arts Center by enabling its frequent flyer members to bid on private boxes, backstage passes and other perks. Continental currently runs similar programs with Carnegie Hall and other arts properties.
Chipps suggested that arts entities could still mine prospects for corporate sponsorships by creating their own perks, such as enabling representatives of prospective corporate partners access to their donors at performance events.
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