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The Benefits of Festival Sponsorship: Why Brands Should Invest

by | November 9, 2023

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Before you dive in, if you are interested in festival sponsorship, check out these titles in our “sponsorship for festivals” series:

I usually write my blog content from the perspective of beginner sponsorship seekers, as those are my clients and who I work with the most frequently. However, I’ve worked on both sides as a sponsorship seeker and a sponsor, so I understand the process from the two perspectives.

Today’s post is aimed at brands, companies, and organizations considering entering the festival sponsorship sphere. I’ll explain the benefits of this type of sponsorship to convince you to begin accepting partners.

8 Great Reasons Brands Should Break into Festival Sponsorship

1. It’s Big Business (And Steadily Getting Bigger)

If you’ve looked around lately, I’m sure you’ve heard incessant buzzing about some popular festival or another. It seems like throughout the year, a festival is always dominating social media and trends.

Festivals are very popular. According to a 2023 report from financial resource Fin Models Lab, the average profit margin for a music festival is five to 25 percent. Larger festivals will earn nearer the 25-percent margin or over.

For instance, Fin Models Lab mentions that Coachella–one of the biggest music festivals on the planet–had a profit margin of 38 percent in 2019.

LA Weekly writes that music festival sponsorship for multi-day festivals and concerts rose from $574 million to $1.17 billion per year between 2003 and 2010.

These are only music festivals, which is one type of festival sponsorship of many. For instance, you can support an arts festival, local community festival, food and wine festival…the list goes on.

What’s clear though is that festivals earn a ton of money, especially established events. The ROI is there, and the upward trends are too. You always want to consider those factors when making an investment, but a festival is a wise choice to put your money toward as a sponsor.

2. Increase Brand Visibility in a Big Way

I always advise sponsorship seekers to recommend assets and activations that go beyond brand awareness, as it’s often a very small goal on a sponsor’s radar.

However, even if it’s not at the top of your goals list, you’re still always working to build and solidify your brand. Sponsoring a festival is a substantial way to do that.

You’ll generate plenty of free press on social media and in local publications about your partnership with the festival. If you get naming rights, your brand name will be splashed all over the place, from the event website and social accounts to the festival signage and merchandise.

Your brand visibility and name recognition should shoot up, resulting in more traffic to your website. Of course, you must be ready to capitalize on the traffic onslaught by utilizing lead magnets and opt-in forms or the traffic will dry up with nothing to show for it.

3. Appeal to a New Audience

Growing your brand is always a top priority. Your company likely spends tens of thousands to millions of dollars on advertising and marketing campaigns every year, and with fruitful results.

Sponsorships aren’t necessarily less expensive, but they are a way to reach new audiences without being so salesy.

The audience at the festival can discover your brand in a natural way. The sponsorship seekers you choose to work with should present highly detailed and segmented audience data. This will allow you to determine if their audience is a match for your target market.

If it is, you can expect large audience swathes at the festival who are ripe for the picking, so to speak. They’re interested in brands like yours and should gravitate toward your activation.

However, you must be involved in selecting the activation for the festival with the sponsorship seeker, creating something engaging, unique, and within a reasonable budget.

4. Strengthen Relationships with Your Current Audience

Equally as important to growing your audience as a brand or company is retaining your long-term customers, users, clients, or buyers.

These people are the backbone of your business who supported you through thick and thin and generously padded your bottom line, allowing you to expand to areas like festival sponsorship.

Sponsoring a festival allows you to expand your role in your audience’s lives. Entering a new role such as this introduces a fresh side to your brand that your audience might not expect.

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In other words, you’re eschewing the same old, same old. Audiences get bored by businesses that keep it on the safe side. That doesn’t mean you should take unmitigated risks. However, playing it safe can be perceived as stagnation in your customers’ eyes.

Positioning your brand in the places your audience is likely to be anyway, such as at a big festival, increases your usefulness and could result in more product or service sales. You can also inspire brand loyalty.

Further, the newly converted customers who first encounter your brand during the festival and derive enjoyment from your activation will be more loyal to your brand from the get-go.

5. Have a Competitive Advantage

You have staunch competitors no matter what industry you belong to. Even if you’ve dominated the industry or have decades of experience, new brands always enter the fray eager to take your place.

These companies will appeal to your audience simply because they’re shiny and new. If your competitors present their business case more compellingly, market in ways you don’t, and find other ways to gain advantages over you, you risk losing business.

You must give your long-term customers a reason to continually choose your service and provide leads with incentives to convert. That means looking in directions your competitors haven’t.

Festival sponsorship could be just the thing. Newer competitors likely don’t have the capital to offer sponsorship, which already puts you at an advantage. Even more established competitors will fall behind if you think of festival sponsorship first.

Keep in mind that your competitors will eventually catch on to what you’re doing and try to follow in your footsteps. That doesn’t mean it’s time to eliminate festival sponsorship from your repertoire.

Rather, you need to continue expanding your sponsorship offerings, with bigger and better activations and amore significant festival presence. That will help your brand dominate the industry.

6. Convert More Leads

Lead conversion matters. After all, you could generate 5,000 leads, but if only 100 of them convert, your business doesn’t benefit. Brands always seek lead conversion measures, and sponsorship is one of the best there is.

I already established that promoting your brand at a festival will lead to more website traffic. That’s why you must be prepared with forms that will capture the lead’s contact information. You can begin nurturing the relationship once the lead is on your email list, guiding them toward a conversion.

However, festival sponsorship will convert leads in more direct ways than that. For example, if your festival activation is a contest or giveaway, you can expect to generate a significant number of signups as event attendees eagerly participate.

If those who are signing up consent to join your email list, you can begin building your contacts, then use email marketing to guide leads toward a sale.

Alternatively, you could give away free product samples, requiring an email list signup in exchange.

One of the best benefits of festival sponsorship for lead conversion is that your leads may enter the sales funnel qualified. For those reading this who aren’t marketing gurus, a qualified lead knows more about a brand and is readier to buy than a lead entering the sales funnel through other means.

That’s to say that conversion is likely only steps away.

7. Gain Industry Insights

Brands must always expand their knowledge to continue serving their target market and long-term customers. Participating in a festival sponsorship increases your industry knowledge. You can learn more about your own industry and the industry of the festival.

This is another useful way to gain a competitive advantage.

8. Increase Your Sales

The top festival sponsorship benefit, and the reason many companies get involved, is to elevate their sales.

You may have a very healthy sales margin now, but you can always afford to make it even healthier. This safeguards you against slower periods or sales declines for any other reason.

Participating in a festival as a sponsor will result in sales, sometimes directly, and other times indirectly.

For example, you might sell a product at the festival. This will directly influence your sales figures for the month.

However, most festivals sponsorship activations lead to indirect sales. Going back to the contest or giveaway example from the last section, email list signups are the beginning of the road to sales, but you must build up a relationship with the lead, understand their pain points, and position your product as the solution to close the deal.

How many sales you make depends on the alignment between your brand and the festival audience. However, you should have a good idea the amount of revenue you can generate before the festival occurs.

Which Are the Best Types of Brands for Festival Sponsorship?

Coca-Cola is the king of festival sponsorship, followed by Red Bull, then Tito’s, Monster, and finally, Pepsi. This suggests that soft drink brands will succeed in festival sponsorship endeavors, but they’re not the only types of brands.

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Truly, almost any company or brand can get involved with a festival, as there are so many types of festivals to select from.

Even if yours is a more “boring” industry like insurance, you can still promote your business in a big way through sponsorship. Look no further than insurance brands and sports sponsorships for proof of that.

Getting Your Sponsorship Journey Underway

Sponsorship is a rewarding avenue for businesses to explore, especially festival sponsorship.

Attaching your business to a music, arts, or food festival can raise your profile, help your business differentiate itself from your competitors, drive more qualified leads, increase customer satisfaction and loyalty, and increase sales.