Sponsorship in the Live Music Business
by Mark Harrison
In sponsorship marketing, brands often ask properties (festivals, teams, charities) how they calculate their value of association.
In overly simple terms, what is the "logo" of a property worth? How does my brand gain from being associated with it in terms of consumer favourability, impact on my positioning, or providing my brand permission to make claims or engage with consumers?
The value of association is not about the media exposure or reach metrics that a property can provide. It must not be generated as a CPM statistic. No, the value of association must be directly related to the more abstract attributes such as prestige, reputation, and trust.
Recently, the Canadian Live Music Association published a comprehensive report conducted with Nordcity that provides a deep understanding of the economic power and potential of Canada's live music industry. The report, which is an economic impact study, discusses direct and indirect GDP output and employment numbers. The numbers are substantial and demonstrate that our live music business, which is played out across thirty-seven hundred venues to the tune of fifty live shows per day in this country, is substantial.
How substantial? How about $10,92 billion in GDP, with the direct job creation of 28,000 people in live music operations and the creation of another 77,000 jobs in tourism?
"The incredible small, medium, and large venues, clubs, concert halls, festivals, arenas, and other live music spaces that connect artists with their fans form a vast, complex, indoor and outdoor ecosystem. This is the system that facilitates live music–and its massive supply chain across Canada, be it a national arena tour, or a one-off local show in a 120-cap independent venue…and everything in-between." said Erin Benjamin, President & CEO of the CLMA.
Canada ranks comparably to countries we often mirror. A. According to Oxford Economics, we are close to the United Kingdom ($12.6 B) and trail Australia ($18.5 B). However, the latter also has 30% more venues than Canada, demonstrating the potential for infrastructure investment.
As a sponsorship marketer, these numbers have significance beyond their vital economic impact. They demonstrate the power of association for brand partnerships in music, which is less about the performer and their star power and more about the industry as an economic driver.
When a brand or sponsor calculates their ROI, they must examine two categories. First, the impact of their sponsorship on their business, from customers to supply chain and everything in between. Second, their effect on society should include everything from the property's stakeholders to followers. Often, you can utilize tracers to measure these attributes. Tracers such as volunteers, years in existence, social media followers, depth of participant engagement, percentage of discretionary spending per follower, improvements in societal scores (i.e. physical fitness levels), and more.
Brand partnership professionals should leverage the data in the Hear and Now study or their local economic live music impact study to build a proper value equation for music integrations.
Those practitioners who leverage this information in a sophisticated model will be able to demonstrate powerfully to their clients (internal or external) the impact of live music. They will be able to validate that their brand's investment will have a central role in powerful outcomes of job creation, placemaking, and community building. These are metrics that matter to corporations.
The value of association is not about how many people you reach.—that's activation. Pure sponsorship is about borrowing equity, which is easily found on a $10 billion stage
Mark Harrison is the Founder of SponsorshipX and the MH3 Collective
To access the full Hear and Now report from the CLMA & Nordcity, visit - canadianlivemusic.ca and watch the launch event here - youtube.com/live/Wqa-hnPkAS4?si=FDaTB4cZ4uckaNcz.