SPONSORSHIP, BRANDS AND ROCK'N'ROLL
In five years, sponsorship for major music festivals soared 700% in Brazil - Marcelo Onaga
Not long ago, Brazil was a sort of refuge for decadent foreign singers and bands. Without the cash they needed to attract the premier international music stars on tour, Brazilian fans and producers had to make do with concerts of the likes of Jimmy Cliff, Gloria Gaynor, Men at Work, Double You and other minor league international showbiz folks. The absence of major idols was an obstacle to securing sponsorship that could afford larger structures and, without the cash from sponsors, attracting top stars was an utterly impossible task. The picture started shifting about five years ago, when the Brazilian economy began gaining relevance abroad and the nation was included in the routes of the major international events. Under the new economic scenario, bands and singers who rarely performed here, such as U2, the Rolling Stones and Madonna, started putting Brazil on their mandatory tour itineraries. Sponsors looking for a piece of the action appeared and multiplied rapidly - telephone operators, carmakers, breweries and banks had (and have) an interest in associating their brands with the image of the idols of pop and began funding the major events in the country. In 2001, Brazil hosted two international events of the first order of magnitude: Eric Clapton's concert and the third edition of the Rock in Rio, featuring bands such as Oasis and R.E.M. This year, at least 20 of the biggest current-day stars came to the country - including Coldplay, Paul McCartney, Black Eyed Peas, Shakira, Elton John and Metallica, in addition to U2 itself, owner of the most profitable tour in history. "Sponsorship revenue accounts for 50% to 60% of a festival's revenues. Without it, it is impossible to hold a big event," says Roberta Medina, vice president of the Rock in Rio, a festival held in October which attracted more than 700,000 people in seven days of concerts at Rock City, an area sprawling over 150,000 square meters in the western section of the city of Rio de Janeiro.
The increased supply of singers and sponsors led to the creation of new festivals such as SWU and "Planeta Terra," to the resurrection of brands such as Rock in Rio, and the to multiplication of international tours. In just over five years, the Brazilian sponsor market for events of this type soared 700% and is expected to generate revenues nearing 400 million Dollars this year, compared with 50 million in 2005, according to the promoters' estimates. "The boom in festivals came about at a time when advertisers were in search of new media platforms," said Silvio Laban, a marketing professor at the Insper business school, in São Paulo. In addition to using traditional media to showcase their brands, companies with connections to the high consumption markets have considered this type of action a way to draw nearer to and interact with their audiences. "The concerts involve a lot of emotion and allow sponsors to create unique, lasting experiences for their consumers," says Laurence Miskyn, professor of marketing at Columbia College, in Chicago.
NEW EXPERIENCES
Unlike what happened in the festivals of the 1980s and 1990s, when they only baptized the events and scattered posters around displaying their logos, today corporate sponsors conceive promotions ranging form making a draw of tickets for consumers to meet their idols to creating activities within the arenas - lectures, radical sports activities or a simple tasting. "We wanted to introduce activities in the festivals that our customers would never forget," says Nuno Teles, vice president for marketing at Heineken. A sponsor of both Rock in Rio and SWU, the two biggest festivals in Brazil, Heineken installed a zip line in the City of Rock, in Rio de Janeiro, passing over the audience in front of the stage. Also, for the first time in Brazil, it used a mobile device that allowed cold beer to be sold anywhere in the venue. "We created the conditions for the consumer to have the best experience with our product," says Teles. During the Rock in Rio, Heineken nearly doubled its market share in Rio de Janeiro, from 0.8% to 1.4%.
The growing interest among consumers and advertisers for this kind of experience has led advertising and communications groups such as TotalCom, ABC, Terra and Globo to establish branches to create content and events. "A couple of years ago we conducted a study and realized that the two biggest concerns among young people are entertainment and sustainability," says Eduardo Fischer, CEO of the TotalCom group. Last year, Fischer rolled-out the SWU, an event conceived to unite music and activities to drive sustainable development. In early November, the second edition of the SWU gathered about 200,000 people in three days of concerts in Paulínia, in the interior of the state of São Paulo.If there is a worsening in the international crisis, many plans can be changed. However, for now, what concerns the companies most is rising operating costs
STAGE WAR
Companies such as Terra and Ambev invested in their own events to draw nearer to their customers. Five years ago, Terra, an Internet outfit belonging to the Telefônica group, created a festival to reinforce its music and video download services. Since then, the event turned into one of its main advertising selling platforms. According to Alexandre Cardoso, marketing director for Terra, in the first year of the event, sponsorship sales fell shy of 4 million Reais. In 2011, the festival grossed 19 million Reais. Three years ago, AmBev brought the Sensation electronic music festival to Brazil in association with the Skol brand and, in the second half of this year, it sponsored a series of concerts of international singers to launch Budweiser in the country. "These events allow for an intense interaction with the audience," says Peter Earp, director of marketing for AmBev. Among the sponsored bands were Red Hot Chilli Peppers, who also performed at Rock in Rio, in which it was the protagonist of a controversy involving advertisers. Anthony Kiedis, the band's lead singer, took the stage at Rock in Rio, an event sponsored by Heineken, wearing a shirt displaying the Brahma brand and rekindled the beer brand war. "It was just a coincidence. Red Hot was sponsored by Brahma in Peru, and their singer liked the shirt," says AmBev's Earp. In the coming years, major music festivals must compete with events such as the World Cup and the Olympics. Planeta Terra, SWU, Rock in Rio and Sensation have already confirmed their next editions. In 2012, the Lollapalooza festival, one of the most important in the US, will arrive in Brazil. With the multiplication of events, sponsorship revenue in Brazil is nearing American standards. Five years ago, the nearly 50 million Dollars that were raised in the country with sponsorship sales represented a mere 6% of the U.S. market's sum. Today, the 400 million Dollars paid by Brazilian sponsors are equivalent to a third of what is collected in the United States.