Festival Sponsorship Spending Projected to Set Record in 2013

Sponsorship for the live music business is up more than 15% in three years as more brands look to tap into fans’ passion

This story below on the growth of branding at U.S. music festivals is from the May 18 edition of Billboard magazine featuring a cover package on the Billboard Music Awards (airing May 19 at 8:00 p.m ET on ABC and hosted by cover subject Tracy Morgan) with interviews with finalists Taylor Swift, Miguel, Ed Sheeran, Icona Pop, fun. and more. Also, a look at the Rolling Stones' flexible ticket pricing, how Atlantic's Craig Kallman revived his Big Beat imprint; an in-depth look at how Daft Punk set-up their first album in eight years; and a Billboard Special Report on metadata by Glenn Peoples. Pick up this issue of Billboard here; become a Billboard subscriber here.

Brand sponsorship for festivals, tours and music venues keeps growing in the United States, and is projected to reach $1.28 billion in 2013, according to marketing analytics firm IEG Research. Music continues to capture an increasing share of dollars from marketers post-recession, posting a 5.4% increase from $1.22 billion in 2012 and a 15.5% increase from $1.17 billion in 2009.

Part of that increase comes from music’s rising appeal among consumer packaged-goods marketers, with Procter & Gamble’s CoverGirl, Unilever’s Fruttare ice cream bars and Kraft Mondelez’s Oreo all sponsoring major tours and festivals this year, with other portfolio brands at the CPG giants starting to dip their toes in music programs. Other category wars like credit cards, automotive and smartphones have helped pour further dividends into the event, touring and festival space. Top sponsorship categories in terms of share of spend include media and publishing (8.9%), beer (7.3%), financial services (5.3%), spirits (5.2%), telecom (5.2%), automotive (3.6%), hotel and resort (3.2%), soft drinks (3.2%) and insurance (2.8%).

On the brand side, Anheuser-Busch is the top-spending company of all music festivals at $335.5 million. Pepsi ranks a close second with $325.1 million. Coca-Cola finishes third with $236.8 million, followed by Miller Coors ($197.1 million), Time Warner ($147.2 million) and Ford Motor ($138.2 million).

Pepsi is still the top-ranked brand in music festival sponsorship, however, accounting for 15.4% of all spending compared with Coke and Bud Light’s shared second-place ranking with 10%. Heineken, Red Bull and Miller Lite each have 7.7%, while Budweiser, Jägermeister, Monster Energy Drink and State Farm are tied at 6.9%. Bank of America, AT&T, Jack Daniel’s, Sonicbids and Verizon Wireless round out the tally with 6.2% apiece.

IEG’s 2013 report doesn’t factor in ad spending related to music, which continues to play a highly influential role in artist development and even track and album sales. Target’s dedicated spending against exclusive album partners like P!nk, Taylor Swift, One Direction and Justin Timberlake has resulted in the retailer nabbing a significant share of first-week sales for those acts’ respective releases, while Microsoft, Fiat and Dr Pepper are among the brands that have played a key role in breaking current hits from acts like Macklemore & Ryan Lewis, Pitbull and Icona Pop, respectively.

“Music remains hot,” IEG Sponsorship Report senior editor William Chipps says, noting that music’s growth is in line with overall sponsorship activity but still lagging slightly behind sports, projected to increase 6% in 2013.

Infographic by Relajaelcoco