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Festival economics: is sponsorship worth it?

  • 9 min read

Your decision to sponsor a festival could represent the single biggest marketing expense this year. How do you decide upfront if it’s worth it to participate? And track performance versus expectations to help guide event strategy next year? Some of the most notable craft beverage fests are right around the corner, so the team at Market Your Craft decided to dig deep into the ROI of event sponsorship to help your brand work the festival economics in your favor. Grab a coffee and keep an open mind, it’s a long read!


PHOTO © BREWERS ASSOCIATION for festival economics postA typical Return on Investment (ROI) equation falls short in calculating the net gain or loss from a craft beverage brand’s sponsorship of a festival. Which could leave owners and executives questioning the decision to invest in the event, let alone marketing in general! A more actionable assessment of sponsorship return measures performance against both attendee and brand expectations; assigns weight to those measures; and reflects that value in the overall spend-versus-gain formula.

the basics – what consumers expect

First, let’s distinguish between a sponsored and a produced event, because the ROI calculation is very different. A sponsored event is hosted by an organizer around a theme, creating an experience for consumers to engage with familiar names and new businesses. Ticket sales for most craft beverage festivals benefit a not-for-profit group responsible for the event’s license to serve alcohol (if applicable), and brands typically have a table or booth for self-promotion and attendee engagement. A produced event is managed and paid for by the individual brand with the goal of awareness/trial, likely occurring onsite or nearby the production facility. Produced events can also be invitationals where multiple brands gather in broader support of the craft beverage community, often in partnership with industry groups like the local guild or association.

Photo by Peter Wagner for festival economics postThe ROI calculation for a produced event is more quantitative: you know how many tickets were sold versus your expenses (including venue, services, staffing, advertising, beverages, etc.). Sponsored events are often expensive, and the lack of cost-control makes return on spend challenging to measure. So why do so many brands clamber to sponsor festivals?! Simple: access to new audiences/geographies. The opportunity to introduce your craft beverage to a prospect in hopes of gaining a new customer is invaluable in today’s crowded selling environment. But if you decide to invest in a festival, you better be prepared to show up in a meaningful way.

We looked at three upcoming festivals to help your brand understand the high expectations of attendees for these or events of similar scale/cost:

No two attendees have the exact same agenda: some go for quantity over quality, fans seek out their favorite brand(s), enthusiasts want to learn and engage, etc. Considering the price tag attached to festivals, craft beverage consumers generally expect the following from sponsoring brands:

  • Selection: pour a mix of generally-available and lesser-known gems.
  • Novelty: allow attendees to try something new or rare.
  • Availability: where possible, don’t disappoint attendees by running out of beverages early. Especially if they had to wait in line for it.
  • Meet the maker: having the producer available for autographs and selfies makes it personal.
  • What makes you different: the tasting staff (your own or volunteer) must be prepped with one-liners about the brand and products.
  • Energy and voice: excitement and crowds draw attention at festivals. Your booth/display is an opportunity to immerse attendees in a mini brand experience worth sharing/bragging about.
  • Swag: t-shirts, lanyards, water bottles, stickers, openers, keychains, chapstick (GABF) are all crowd-pleasers.

getting crafty – a win for brands

Copyright © 2019 Food Network & Cooking Channel New York City Wine & Food Festival presented by Capital One for festival economics post.Now, as a craft beverage brand considering sponsorship of a festival, there’s no avoiding the topic of cost. Festival organizers are happy to customize a package for your brand, some of which could total tens of thousands of dollars BEFORE execution cost. The team at Market Your Craft talked with event organizers to understand the range of standard package prices you might expect for the same three upcoming festivals:

  • GABF: 10’ x 10’ exhibit space starts at $5,500, with hospitality tickets and limited promotional channels included. Compare all sponsorship packages.
  • WhiskyFest San Francisco: each reserved booth includes a front table for pouring and back table for displaying products, starting at $4,995. Detailed exhibitor information.
  • New York City Wine & Food Festival: physical activation space at participating events starts at $15,000, with limited promotional channels included. Compare all sponsorship levels.

And we thought it was expensive for consumers to attend! Granted, these are premiere industry events drawing thousands of consumers (60,000+ for GABF) over a 1-3-day period. So, from a pure advertising perspective, many brands may consider this a bargain for all the exposure. We recommend for your brand to go deeper, factoring the following performance metrics into any ROI calculation:

Prior to the festival:

  • Time: how long was your brand promoted.
  • Reach: how many individuals were exposed to your brand, regardless of intent to purchase tickets.
  • Frequency: how often was your brand promoted across various channels.
  • Impressions: total views of your brand across email, printed and other promotional materials (reach x frequency).

At the festival:

  • Attendance/Traffic: number of actual attendees versus tickets sold/available.
  • Engagement: quality of the traffic, estimated in terms of % of attendees interacting with the brand at your booth. Also consider event-specific social #hashtags used.
  • Product launch: raising awareness of a new craft beverage can be very impactful at a festival.
  • Net social followers: the increase in followers during the event versus a typical day or baseline number if your social @handles are promoted.
  • Participation in activities: attendance if you planned a special beverage pouring or sponsored additional events like a silent disco.
  • Merchandise sold: total sales if allowed to sell branded merchandise at your booth or from a centralized concession area.
  • Leads: while the goal of a festival isn’t lead generation, having a badge scanner or email capture device could enable newsletter opt-in.
  • Sales: depending on the event guidelines and state rules for sponsors, whatever is being poured at your booth is typically sold to the organizer at a discount or donated (usually accounted for under cost/expenses).

Following the festival:

  • Press: number of news/editorial mentions as a result of your sponsorship activity.
  • Satisfaction measures: how happy was the attendee with the festival, captured by exit survey and often in terms of Net Promoter Score (how likely they are to recommend the festival to others on a scale of 0-10).

behind-the-curtain – measuring ROI

Beyond supporting the community and generating goodwill lies the basic ROI formula that owners and executives have to consider when sponsoring a craft beverage festival:

ROI = (Current Value of Investment – Cost of Investment) / Cost of Investment

But how do brands place a value on the event when 1) they have to pay to attend, 2) they lose money on donated or discounted beverages and 3) they must cover buildout, staffing and other costs? The team at Market Your Craft recommends using your own performance data to help benchmark advertising cost and estimate marketing value.

Facebook logo for festival economics postFor example, if you recently spent $300 to boost a Facebook post with higher-than-average organic engagement and saw a net follower increase of 1,200, you effectively paid $0.25/follower. If 10% of those followers continue to engage with the brand after the first month, you might assign a relative weight of 10% to followers gained from boosted posts on Facebook.

If you assign similar values and weights across all of the items included in the sponsorship package – like banners, attendee email, direct mail, social campaigns, digital ads and traditional media – then you are estimating the intangible value of the program. Or what you would spend to achieve comparable marketing performance on your own. So, our new ROI formula might look more like:

ROI = (( Tangible Value + Intangible Value ) – Cost ) / Cost

We have put together a spreadsheet to help estimate your ROI for sponsored events. It is meant to be illustrative, not absolute: the values and weights for items included in your sponsorship are most accurate when they reflect your own performance data. Substitute general media buying data where historical data doesn’t exist. However you get there, what’s important is holding your investment in festivals and other sponsored events to a higher standard.

Festival Economicssample spreadsheet – 19 KB
Additional calculator

October 2019 content calendar – including GABF!

Social Setting image for festival economics postYour customers require more engagement from social, but who has the time or the creativity to keep up? Ditch the whiteboard and start the month of October with more than 60 attention-grabbing ideas to help design a content calendar that delivers traffic, clicks and sales. Available for purchase from Market Your Craft, our Social Setting Calendar gives you confidence you’re getting the most out of social each month. In it you’ll find timely and topical talking points; lesser-known craft holidays worth messaging; and recos on ways to share your brand story, culture and energy with followers and fans.

October, 2019 | 1.8 MB, 38 pagesAvailable for purchase and immediate download >

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