By Robert Channick Chicago Tribune
WWR Article Summary (tl;dr) Sponsorship spending on music tours, festivals and venues was projected to total $1.54 billion last year, a 4.8 percent increase from 2016, according to research from Chicago-based IEG. Wine and spirits brands were the most active music festival sponsors, followed by beer brands.
The summer festival season kicked off in Chicago earlier this month with Spring Awakening, an annual electronic music event that drew about 100,000 mostly millennial attendees for three days of dancing, drinking and communing at a park in Little Italy on the near South Side.
While artists such as Alison Wonderland, Bleep Bloop and Slushii were the main attractions, mainstream sponsors were an integral part of the experience, paying upward of $100,000 to woo festivalgoers with pop-up dance clubs, branded giveaways and samples of their products, mostly booze.
From Monaco Cocktail's "Silent Disco" to the Corona "Electric Beach," sponsor "activations" are a creative way to resonate with attendees where traditional advertising can't reach. But increasingly, festival sponsors are pairing their so-called experiential marketing efforts with some old-fashioned vendor sales, hoping for a more immediate return on investment.
"The trend is no longer just marketing," said Joe Lucchese, founder and owner of Pro-Ject, a 5-year-old, Chicago-based experiential marketing agency that manages sponsorships for Spring Awakening. "Their goal is to sell as much product, in a thoughtful and unique way, as possible at each festival."
Founded in 2008, Chicago-based React Presents produces Spring Awakening, Mamby on the Beach and other Midwest festivals. Lucchese said brands "have gotten a lot smarter" about leveraging the events to maximize on-site sales.
But this is not your father's Chicagofest beer concession.
Creativity was on full display at Spring Awakening, where sponsors paid between $10,000 and $100,000 to participate in the event, Lucchese said.
Monaco Cocktails, which is owned by Chicago-based Atomic Brands, makes fruit-flavored cocktails in a can. Launched in 2012, the brand has grown sales quickly, fueled in no small part by a summer festival marketing budget that will top six figures this year, including its second Spring Awakening sponsorship.
"The brand has been growing very fast and this is a key pillar of our brand-building activity," said Don Deubler, 44, CEO and co-founder of Atomic Brands.
Monaco's "Silent Disco" is a covered outdoor space where festivalgoers put on headphones and dance to a DJ that only they can hear. Giveaways include Monaco drink samples and branded items such as suntan lotion, bandanas and water bottles.
There are also plenty of opportunities to engage in social media activity, Deubler said, with "photo op walls" and other design elements that stimulate selfies and online postings to help build the Monaco buzz.
The effort also includes direct sales of Monaco beverages, a prerequisite for the brand's participation.
"We're not going to participate in a festival where we don't sell product," Deubler said. "You're trying to offset the marketing expense through sales of the product."
Experiential marketing has gained traction in recent years as a way to engage consumers with branded experiences.
Campaigns can be tied to an event or appear as a standalone pop-up display, a real-world commercial that delivers a brand's message in an interactive and often entertaining way, creating a very different impression than a 30-second TV spot.
Festivals are an ideal setting for experiential marketing campaigns as brands try to blend in seamlessly with the mood-altering atmosphere of a communal celebration.
Sponsorship spending on music tours, festivals and venues was projected to total $1.54 billion last year, a 4.8 percent increase from 2016, according to research from Chicago-based IEG. Wine and spirits brands were the most active music festival sponsors, followed by beer brands.
Chicago has become a nexus of summer festivals, from Lollapalooza to the Pitchfork Musical Festival, with beer, wine and liquor sponsors pulling out all the stops to join the party.
While on-site sales have yet to pay for the full marketing budget at a summer festival, Deubler said it is money well-spent, driving sustained sales increases for the brand in the wake of each event. He said connecting with millennials, a target demographic for Monaco, would be much harder through traditional advertising.
"We have found the best way to engage the millennial consumer is not to chase them, but to show up where they're going and to try to enhance the experiences that they're after," Deubler said.
Next up for Monaco is Mamby on the Beach on June 23 and 24 at Oakwood Beach on Chicago's South Side, followed by the Mo Pop Festival next month in Detroit.
Lollapalooza will hit Chicago in August, filling Grant Park with hundreds of thousands of festivalgoers and infusing millions into the local economy. The summer music festival launched in 1991 and put down roots in Chicago in 2005, becoming a major sponsorship platform along the way.
Beer, wine and liquor sponsors are well-represented at Lollapalooza, but other brands have achieved experiential marketing success at the festival as well.
Morton Grove-based Lifeway Foods, the largest U.S. manufacturer of the cultured dairy drink kefir, has found its place at Lollapalooza by focusing on the youngest attendees. Lifeway sponsors the Kidzapalooza stage, featuring kid-friendly bands, an array of hands-on activities and free samples of kefir products.
"Throughout the festival, lots of people go for the beer," said Lifeway spokesman Derek Miller. "But at Kidzapalooza, it's all about kefir."
Miller said Lifeway gives out lots of branded swag including toys, T-shirts and other promotional items, along with temporary tattoos, hair dyeing and other touches in keeping with the theme of the parent festival.
The formula works so well, Lifeway has a similar sponsorship at the annual Austin City Limits Music Festival in Texas called Austin Kiddie Limits.
"We are a little bit different in terms of some of the other big festival stage sponsors, but we found our niche," Miller said.