It’s been 20 years since Neil Young famously declared that he wouldn’t sing for Miller or Bud. These days, most rockers are singing a different tune as the concert sponsorship business has skyrocketed.
While media segments like newspapers and network TV post declines, music tour sponsorships have grown 75% since 2003 and will hit $1.04 billion this year, per IEG, a Chicago-based company that tracks sponsorship dollars.
Marketers say the appeal is akin to sports sponsorships and experiential marketing, namely that you get access to a captive audience during an enjoyable activity. “Since the consumer is at the venue all day, it gives us a better opportunity to talk to that consumer one-on-one,” said Chad Vogelsong, general manager of marketing at JVC Mobile, Cyprus, Calif. JVC Mobile sponsors the Jaegermeister Music Tour.
Such thinking also prompted Kia this month to sign on as auto sponsor of the Van’s Warped Tour. Kia will host the Soul Lounge, named after its new small car that will hit dealers early next year. Here it will hold meet and greets with the bands, offer interactive displays and dangle a contest to win a new car. “It’s a big package for us and a perfect way to get to the consumers for the Soul,” said Tim Chaney, Kia director of marketing. Kia’s deal includes signage, a sponsored stage and inclusion in promotion for the tour.
Concert sponsorships also allow for brands to directly reach certain segments. Jaegermeister will hit its male demographic with headliner Hatebreed. Crown Imports, meanwhile, will court Hispanic consumers with its new “Conexion Corona” concert series this year.
Part of the growth is driven by the evolution of the record industry. Many musicians, who have seen their income from recordings eviscerated by free downloads, are much more open to sponsorships, said William Chipps, IEG senior editor. “The tide has changed since even the ’90s, when a lot of bands didn’t want to be aligned with corporations. Now, I don’t think any band would say no to a sponsorship. The same goes for concert promoters.”
Lollapalooza, once the paragon of independent rock credibility, now thrives on corporate backing with AT&T, Bud Light and adidas leading the charge.
Courtney Graber, dir. sponsorships for C3 Presents, Austin, Texas, which puts on Lollapalooza, said it works because “they do things that are relevant, and we take only a finite number of sponsors.” AT&T, for example, has its “Digital Oasis,” where patrons can recharge cell phones and check e-mail.
Brands are even getting involved in the ticketing process. Last month, Live Nation announced a multiyear marketing deal with Citi, giving the credit card company promotional access to concerts, online ticketing and Live Nation artists. In one recent promotion, Citi cardholders were given first dibs at tickets for the Police.
“We’ve changed the model for music promotion,” said Russell Wallach, Live Nation’s president of national alliances. “At one time, we were selling tours and venue sponsorship. Now, it’s the ability to get someone involved in everything from ticket sales forward.”
At $2.3 billion, concert ticket sales were off slightly in 2007, compared to the $2.6 billion in 2006, according to Billboard Boxscore.
Upstart beverage brand Sweet Leaf Tea stakes virtually all its marketing budget on music event sponsorships, including Lollapalooza, Coachella and Stagecoach.
Said Clayton Christopher, CEO of Sweet Leaf, Austin, Texas: “That’s our marketing strategy, to introduce people to our brand at a place where they are having a good time.”
