Sponsorship spending on music tours, concert series and venues is expected to total $754 million in 2005, up from $695 million in '04, according to IEG Sponsorship Report, a leading trade publication
Sponsorship spending on music tours, concert series and venues is expected to total $754 million in 2005, up from $695 million in '04, according to IEG Sponsorship Report, a leading trade publication covering the sponsorship business.
According to IEG, spending on music marketing platforms continues to be fueled by the growing proliferation of traditional media, which has made it increasingly difficult for marketers to reach the highly elusive youth and young-adult segments.
"Perhaps more than ever before, corporate America recognizes the power of music marketing. It's often the most effective way to break through the clutter and reach the youth market on an emotional level," says William Chipps, senior editor, IEG Sponsorship Report.
The country's changing ethnic makeup and companies' growing interest in multicultural marketing programs also contributed to the increased spending. A number of companies signed high-profile deals with Latino acts in 2004, a trend that is expected to gain momentum in '05 and beyond. Deals include Verizon's sponsorship of Alejandro Sanz; Hershey's partnership with Thalia Sodi and Jack Daniel's Studio No. 7 concert series. Corporate interest in Latino and other ethnic acts also is fueled by economics.
"Sponsorship of high-profile Hispanic artists is typically considerably less expensive than a tie to a similar mass-market artist. That is very appealing to marketers because it frees up funds that can be used to activate deals," Chipps said.
Emerging sponsorship categories include dot-coms, which staged a sponsorship comeback after the category melt down five years ago. Active segments include online dating, social networking and auction sites.
Companies also stepped up interest in naming rights deals of music venues, with Coors Brewing Co. signing title of Englewood, Colo.'s Coors Amphitheatre and Nokia Corp. taking title to Texas' Nokia Live at Grand Prairie Theater and a new entertainment facility in Los Angeles. Nokia will also reportedly title a new venue slated to open this year in New York's Times Square.