North American-based companies will spend $1.08 billion to sponsor music venues, festivals and tours in 2009, a 3.8% increase from the $1.04 billion spent last year, according to IEG Sponsorship Report, which tracks money spent on sponsorships. In terms of spending, that's the highest level of spending on music ever reported by IEG.
"The fact that music sponsorship spending is holding its own in today's turbulent economy demonstrates the growing importance of music to corporate marketers," Bill Chipps, senior editor at IEG Sponsorship Report, tells Billboard.biz. "The 3.8% increase on music sponsorship spending outpaces IEG's 2.2% projection for the overall sponsorship industry, including professional sports, non-profits and other types of events, further demonstrating the growing popularity of music."
Most of that growth is driven by new and incremental spending on big-ticket national music festivals and tours, most of which have maintained sponsorship momentum in spite of the economy, IEG reports. For example, State Farm Insurance Cos. has expanded its presence in music by spending an estimated low seven-figures on national and regional festivals and events this year.
Those include presenting status of the Billboard Latin Music Conference & Awards and co-sponsorship of the All Points West Music & Arts Festival in Jersey City, N.J.; the Coachella Valley Music & Arts Festival in Indio, Calif.; and the Dfest Music Conference & Festival in Tulsa, Okla.
Unfortunately for many local music properties, sponsorship spending on music is a classic case of the haves and have nots. Chipps says while many local and regional music festivals are having a difficult time selling sponsorship, the nation's largest music festivals continue to find interest from corporate marketers due to their ability to provide access to thousands of fans over a multi-day period in a relatively clutter-free environment.
The music industry also has benefited from increased corporate interest in blockbuster tours by major artists. That signals a shift from the past several years when corporations focused on large-scale music festivals.
Recent deals include J. C. Penney Co.'s 's two-year integrated partnership with Rascal Flatts on behalf of its American Living brand; the Clorox Co. co-presenting the U.S. stops of Keith Urban's tour on behalf of it's KC Masterpiece sauces and Kingsford charcoal; and Research In Motion Ltd. aligning with U2 on behalf of BlackBerry.
"Corporate marketers over the past couple of years have largely focused on Coachella and other big-time music festivals over national tours," Chipps observes. "We're starting to see more interest in national tours again, as evidenced by JCPenney's sponsorship of Rascal Flatts, Virgin Mobile's sponsorship of Britney Spears, etc."
Telecommunications companies, apparel retailers and other lifestyle-centric brands remain some of the most active categories sponsoring music. On the flip side, some properties--particularly local and regional music festivals--have taken a hit from the fallout in the financial services industry.