The Coachella Valley Music and Arts Festival returns this weekend, unofficially marking the beginning of summer music festival season—which is expected to reclaim a sense of normalcy after two years marked by COVID-induced cancellations. While the busy festival circuit gives brands a chance to reach consumers in real life, marketers will put a new emphasis on digital experiences, including cashless payments, metaverse tie-ins, NFTs, virtual memorabilia and more.
Although the pandemic remains a concern, music festivals across the U.S.—from Lollapalooza in Chicago to the Rolling Loud hip hop show in Miami—are seeing brands jump into sponsorships where they might have been previously hesitant. Client interest in the events is back to pre-pandemic investment levels, said Sarah Dale, senior VP of brand partnerships and strategy at experiential agency Jack Morton. “I think now brands are ready, fans are ready,” she said.
In-person marketing will form the bulk of activations, said Peter Laatz, global managing director of sponsorship consultancy IEG, who framed virtual activations as “an accessory.”
The live music industry, worth $1.6 billion according to IEG, before the pandemic, took a more significant hit than sports events and saw an almost 30% drop in sponsorship revenue for live events, said Laatz. But sponsorship revenue is rising again as festivals come back this year, said Laatz.
While insurance giant State Farm has “completely exited” the music festival scene, brands in emerging sectors such as crypto and rideshare are jumping into festival sponsorships, according to Laatz. Coinbase created an NFT gallery at last year’s Governors Ball in New York and is sponsoring the festival again this year along with delivery brand Gopuff.Live experiences are the focus this year for many brands. For instance, Lay’s at Coachella is producing potato chips on-site and creating a reservations-only space for people to take part in a four-course product tasting.