Despite the downturn, festivals - and their sponsorships - remain big business. Noli Dinkovski looks at how brands are making sponsorship work for them

It's always the way at festivals. You arrange to meet your mates at the Brothers Bar, but one has deviated to the Orange mobile phone recharge area, another is in the queue for the NatWest cash machine and a third was last seen pogoing in the Red Bull tent. There's just no getting away from those brands.

Glastonbury rightfully claims to be one of the least corporate festivals around, but founder Michael Eavis certainly hasn't been shy when it comes to seizing commercial opportunities in recent years.

And despite the recession and the slashing of advertising budgets, sponsorship is going from strength to strength. While the more established drinks brands in particular are continuing to pump money into festivals, a number of new tie-ups have been announced including Brothers Cider, Portugese beer Sagres and Czech lager Budweiser Budvar. So what's making music festival sponsorship so recession-resistant? And what do brands have to do to make sure the sun shines on them?

The Gaymer Cider Company has been at the forefront of sponsorship investment in recent years. Last summer it ploughed £4m into supporting a number of leading festivals through its core brand, Gaymers, and this year has upped its investment by a further million. It's money well spent, considering the target audience, says chief executive Peter Spencer. "We're trying to engage with the 18-to-24 age group. These people are reasonably recession-proof - many don't have credit cards and even fewer have mortgages."

Tuborg is another high roller in the sponsorship stakes. Like Gaymers, the Carlsberg-owned brand - well established in a number of European countries - is working hard to gain a foothold with younger consumers in the UK.

While general advertising builds brand preference, a well-placed sponsorship suits a recession because it's more of a "call to action", claims Gareth Roberts, head of sponsorship at Carlsberg UK. "In a climate where you are reducing budgets, you go to where the high guarantees are. Sponsorship events can deliver that, because they give you an immediate return on investment through pouring rights."

When it comes to a festival with a guaranteed audience of 50,000-plus people, that return on investment can be sizeable. "What we have with these events is a captive audience. They've bought their ticket, and they go there with the intention of having a good time. So it's an immediate return that we can have a guarantee on."

And it's a guarantee that doesn't look like waning for some time yet. Tickets for Glastonbury, the V-Festivals and Reading and Leeds all sold out in 24 hours, reflecting the continuing boom in live music.

"It's all been driven by the online revolution and the rise of piracy," says William Fenton, editor of The World Sponsorship Monitor. "Bands aren't making money from selling records any more, so they are going on the road."

The breadth and quality of live music is having a positive effect on smaller 'boutique' festivals as well, says Roberts. Suffolk festival Latitude, for example, had an audience of 6,000 just two years ago. This year the number will be nearer 25,000.

But it isn't all sunshine and smiles. Blues festival Lanhydrock, music and arts festival Meadowlands, Scotland's biggest intercultural festival Mela and Castle Park Rock festival in Wales are just some of the events that have been pulled this year. And while organisers of Homelands - the biggest festival to be cancelled so far - say they pulled the plug because of financial demands from the local council rather than lack of sponsorship, it serves to demonstrate just how narrow the profit margins of some festivals are.

"The festivals most at risk in a downturn are the ones that haven't had three or four years to establish themselves," says Cathy Bell, head of entertainment sponsorship at brand agency Experience. "But when it comes to sponsorship, recession or not, they've never been able to command a big fee, simply because they are not delivering the numbers and the impact that you get off the more established festivals."

When Carling and Festival Republic parted ways last year, ending the beer's decade-long association with the Reading and Leeds festivals, commentators argued it was symptomatic of a move away from the all-encompassing headline sponsor.

Brands are being much more targeted in the sponsorship rights they need to buy, Bell claims. "I don't think there are many brands around these days that can get away with just turning up and badging an event. Consumers are too savvy, they want to see a value-added element."

Blanket sponsorship can alienate certain potential festival goers, says Ben Cull, marketing director at organic brand and Glastonbury sponsor Yeo Valley (see box). "Carling and Reading/Leeds became known as a festival for young lads because of the beer association," says Cull. "In comparison, the Innocent Village Fete immediately creates mental images of a fun, family-centred event."

That's not to say Carling doesn't know how to add value at a festival. Last year it was lauded for its 'cold beer amnesty' initiative at RockNess and the V-Festivals, where festival goers could swap any unopened can of warm beer for a cold can of Carling, at no expense.

"The cold beer amnesty was a brilliant example of a sponsor actually making a difference in being there," enthuses Fenton. "Not only was it gaining a competitive advantage over rivals, but it made people feel good about Carling generally."

The initiative is an example of the importance of "providing a utility", says Jack Horner, creative director at music marketing agency Frukt. "It sounds dry, but brands that can offer a service tend to be remembered positively. Wrangler's washing service for muddy jeans at last year's Lowlands festival is another I'd highlight."

Horner believes fmcg sponsors could learn from technology brands, which have been quick to exploit new ways of ticketing as well as other gimmicks, such as live access to VIP areas, through mobile and internet technology. "Technology firms have tended to think more holistically about what role technology performs before, during and after the event."

It helps that boutique festivals such as Big Chill, Bestival and Lovebox have a more collaborative approach to working with brands, claims Horner. "These festivals have grown year on year, and have additional reach through very active and loyal online communities, giving potential year-round opportunities to brands that think smart. However, they are also quite choosy about who they work with."

Cider maker Brothers is one such brand targeting boutique festivals this year. Consumer marketing manager Matthew Langley believes his company has been effective in spotting the events that will be attended by "early adopter consumers", which will help build a credible following.

Some would argue that Brothers' hand was forced after it was outbid by its Shepton Mallet neighbour Gaymers for the Glastonbury cider pouring rights last year. However, the Brothers Bar, which has been a fixture at the festival since 1995, will still make an appearance.

Langley concedes that festival prices have inflated for cider brands, a fact that perhaps prompted Merrydown's decision to pull out of the Beachdown and South West Four festivals this summer. "The reason for our relative strength in festival sponsorship is that promoters sell off the rights exclusively by category," says Langley. "As the competition for the cider category part of festival sponsorship has increased, the prices have gone up accordingly."

Sponsorship has always been about how much people are prepared to pay, says Carlsberg's Roberts.

"But rights owners are also becoming better at understanding what festival goers need and are getting the right partners involved in the right categories," he adds.

But while beer and cider brands continue to dominate music festival sponsorship, food companies maintain a peripheral role. So, are they missing a trick?

"There are a number of innovative small food manufacturers, like the Square Pie Company, that have made a concerted effort at festivals, but they act more like vendors," explains Bell. "I can't see why Cadbury, for example, would want a Cadbury lounge - how big a role does chocolate play in your enjoyment of a festival?"

Chocolate may not be ideal, but ice cream goes down a treat, if Ben & Jerry's Sundae on the Common festival in July is anything to go by. "The key to a successful festival in the current climate is to give consumers real value for money and we're proud to keep our tickets under £10," says brand manager Vicky Willis. "So far, consumer feedback has been very positive and we've sold out every year."

Whichever the sector and whatever the cost involved, the consensus is that sponsorship needs to add value to the festival experience to truly work. Festivalgoers don't particularly want to stare at giant advertising hoardings all weekend. They'd much sooner wait for their friends with a cool beer.

How Yeo Valley helped 'love the farm and leave no trace' at Glastonbury 2008
Yoghurt and music may seem like an unlikely sponsorship tie-up, but add a common cause and everything changes.

Yeo Valley has been involved with Glastonbury since 2003, and last year was its most successful yet, with more than 30,000 pots sold over the weekend.

But while sales were generated traditionally - from two stands - Yeo Valley took its festival involvement a stage further by supporting the organisers on their quest to improve recycling levels.

It provided 20,000 bin lids on-site to designate where to recycle bottles, cans, food and paper. It also gave a bag for life to every festival-goer - 130,000 in total. "It is a natural affiliation between two organisations that share a similar ethos on the environment, sustainability and reducing carbon footprints," explains Yeo Valley marketing director Ben Cull. "Sampling activity is intensified in this kind of atmosphere. Take our bags for life. This would simply not work as an everyday city-based marketing idea - the consumer would perhaps take the bag, notice the brand then discard the item on the day. When living on basic essentials in festivals, however, branded items such as bags, torches, water bottles and drink tokens become vital parts of your festival experience."

Ben & Jerry's
Rather than just simply sponsor a festival, the ice cream brand is this year again going that one step further - by running one. The family fete-style festival is held on Clapham Common in late July. The 25,000-capacity Sundae on the Common will have a heady mix of helter skelters and cows to complement the usual music and ice cream tasting. And all for under £10 as well.

Brothers Cider's strategy is to target 'avant-garde' dance events such as Glade, Big Beach Boutique and Creamfields. It will continue to have a bar at Glastonbury, the place where it all started for the four Showering brothers and their pear cider in 1995. The brand will also be spending £2m on advertising on TV for the first time.

Budweiser Budvar
Prior to last weekend's Cheltenham Jazz Festival, Czech beer Budvar ran a competition in conjunction with pub trade magazine The Morning Advertiser to find the best unsigned jazz band in the country. The top three submissions were asked to play at the event, which Budvar sponsored for the first time this year after being the official beer of the event since 2007.

Portugese beer Sagres announced a tie-up with Brighton's Beachdown festival last month. The brand, which commands 50% of the Portuguese beer market, was added to owner Scottish & Newcastle's portfolio in June 2008. S&N views the deal as a "great opportunity to build on the success that the brand has to date".