Tour Sponsorship Growth Expected

Sponsorship spending on music tours, concert series and venues is expected to total $754 million in 2005, up from $695 million in 2004, according to IEG Sponsorship Report, the leading trade publication covering the sponsorship business.

Spending on music marketing platforms continues to be fueled by the proliferation of traditional media, which has made it increasingly difficult for marketers to target the highly elusive youth and young-adult segments, the IEG report says.

"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 of 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 this year and beyond. Deals include Verizon's sponsorship of Alejandro Sanz, Hershey's partnership with Thalía Sodi and Jack Daniel's Studio No. 7 concert series. Corporate interest in Latino and other ethnic acts is also 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 says.

DOTCOM COMEBACK

Emerging sponsorship categories include dotcoms, which staged a sponsorship comeback after the category meltdown five years ago. Active segments include online dating, social networking and auction sites, with true.com and eBay aligning with Clear Channel Entertainment venues and myspace.com partnering with the Vans Warped tour, Blossoming Media tour and this spring's Taste of Chaos tour.

The restaurant category also stepped up sponsorship with several companies launching their first music marketing campaigns. Examples include Cracker Barrel, which partnered with the Grand Ole Opry and the Alison Krauss + Union Station tour, and sub chain Blimpie, which titled CCE's Summer of Live concert series.

Other active sponsorship categories in 2004 included automobile, beer and spirits, personal care, telecommunications and the gaming sectors, all of which are increasingly trying to make a positive impression among teens and young adults.

Companies also stepped up interest in naming-rights deals of music venues, with Coors Brewing signing title of Englewood, Colo.'s Coors Amphitheatre and Nokia 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.