IEG: Marketers To Spend $1.17 Billion On Live Music This Year
A downturn in the concert business in 2010 did not have a negative impact on corporate dollars spent in the space, as North American-based companies will spend $1.17 billion to sponsor music venues, festivals and tours in 2011, a 7.3% increase from the $1.09 billion spent in 2010, according to information compiled by Chicago-based IEG, which tracks the sponsorship industry.
The increase outpaces the projected 5.9% increase in overall sponsorship spending and represents the largest increase in spending among all property types including sports, causes and the arts. The increase reflects both the viability of live music as a platform for brands to connect with passionate consumers and a migration of marketing dollars from traditional media to the more interactive live event space.
“More marketers have returned to sponsorship as the economy rebounds, which in turn has benefited the music touring business,” William Chipps, senior editor of IEG Sponsorship Report, tells Billboard.biz. Chipps adds that double-digit percentage decreases in concert attendance last year should not negatively impact the live music sponsorships going forward. “The decline in the touring industry is not expected to have a significant impact on sponsorship spending. More and more companies are embracing nontraditional marketing channels, and music provides a marketing platform to tap into a key passion point.”
According to IEG, spending continues to be driven by the apparel, automotive, insurance, personal grooming, retail, technology and telecommunications categories. In an ongoing trend, much of the growth is driven by sponsorship spending on multi-day music festivals, with one established festival generating an 80% increase in revenue.
Recent deals cited by IEG include Sweet Leaf Tea Co. sponsoring the Free Press Summer Fest in Houston; Camelbak Products, LLC partnering with Lollapalooza in Chicago; and consumer electronics manufacturer Vizio, Inc. and online local discount provider Gilt City teaming up with the Coachella Valley Music and Arts Festival in Indio, Calif. In addition, RadioShack Corp. this year inked new partnerships with Lollapalooza and the Austin City Limits Music Festival, both produced by Austin-based C3 Presents.
Sponsorships at entertainment venues also shows strength, with Live Nation and AEG both reporting new naming rights deals. Those include Virginia Farm Bureau signing three-year naming rights to Live Nation’s Virginia Beach Amphitheater, a venue now called Farm Bureau Live at Virginia Beach.
AEG has signed a handful of naming-rights deals over the past year for venues it owns or operates, including the Best Buy Theater in New York City; 1st Bank Center in Broomfield, Colo. and the Verizon Theatre at Grand Prairie in Texas.
Corporate interest in music tours also has picked up, with several major acts touring with corporate partners on board. Those partnerships include Katy Perry and Schick Quattro for Women, and Taylor Swift and CoverGirl.