MAC Presents’ founder Marcie Allen broke down the strengths and weaknesses of branding at the XLIVE annual conference in Las Vegas this week. Allen closed the first day of the conference (Dec. 10) with a keynote discussion moderated by  music journalist Larry LeBlanc.

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Allen, who has helped facilitate brand partnerships with Khalid, Billy Joel, Citi, Cracker Barrel and many more, explained to the audience at the Mandalay Bay that brand sponsorships with tours and festivals are no longer worth the money for most companies.

“First of all you need to know that tour sponsorships are dead. I don’t sell them any more. I can’t sell them,” Allen told the crowd, adding brands “feel like if they are going to do a logo slap, they are going to do a sports deal. You have to remember, music partnerships are $1.5 billion according to IEG and sports is $60 billion.”

Allen explained that tour sponsorships are no longer moving the needle for companies and brands find they are making more of an impact with fans by including an artist’s song in an advertisement or exclusive shows.

“Over the past five years, we have worked on numerous festival activations at big festivals like Governors Ball and ACL for Miller and Life is Beautiful for Samsung. With brands, there is festival fatigue,” said Allen. “Brands are not seeing their return on investment, their conversion on a lift in sales during the pulse period that they are sponsoring.”

Allen, who also teaches at NYU Steinhardt, gave the example of asking her students who went to major festivals if they could name two sponsors present at either Coachella or Governors Ball which each had dozens of brand partners respectively. According to Allen, the class was unable to name a single brand for either festival.

“Especially Live Nation and AEG, they are doing multi-festival deals. It is very rare that a brand is going to sponsor ACL and not do anything else,” said Allen. “Buy in at those major festivals is a million plus, that gets you in the front door. Then you have to do your activation. You have to do any additional advertising. You have to amplify your activation on site by doing a deal with an artist who is already performing. You’re in for another $500,000-600,000 before you even blink.”

Brands are more interested in being part of an artist’s album launch, philanthropic endeavors, social media efforts and branded content, said Allen.

“Why would a sponsor not go and sponsor Magnificent Coloring Day with Chance the Rapper or Posty Fest with Post Malone or Astroworld with Travis Scott and get a buy in for a tenth of that? I am going to get much more brand recognition and have the ability to stand out in a much bigger way because the artist who is curating the festival is going to really take ownership,” said Allen.

Another booming component of the brand industry at the moment is the esports world.

“Esports gaming is huge. We got an offer the other day for one of our artists to show up for 30 minutes and play a game against an athlete for $750,000. I thought it was a typo,” Allen said. “This artist doesn’t make $750,000 for a show.”

Allen explained that while Amazon’s Twitch doesn’t have the money for brand sponsorships, the games do. Addressing promoters in the room, Allen recommended they set up gaming rooms at their venues and request that artists play for 15 minutes and live-stream it on Twitch for additional revenue.

“Soon you are going to see an artist stream their album for the very first time on Twitch and in a game. The synergy between music and gaming, we can’t keep up,” said Allen. “Brands want to be in the center of it and they are willing to pay for it, as long as they are taken care of.”