The music industry is facing a “unpreviously unprecedented” amount of ad drop in 2019, but some say it’s not a good look.
In a letter sent Tuesday, ad agency Gersh wrote that it has seen a lot of cancellations due to declining attendance, but it says some advertisers are being left out in the cold.
“Our experience in Canada suggests that a significant number of advertisers are having trouble with their ad campaigns, including concert advertising,” the letter says.
“In some cases, the decline in ticket sales has been more severe than expected, and some advertisers have been left with little or no advertising opportunities.”
Some of the major advertisers who were hit by the industry’s worst drop in ad revenue in a decade, including Ticketmaster, were not surprised by the drop.
Ticketmaster told CBC News it’s been “one of the hardest years for us as a brand” in terms of ad revenue.
“We’ve seen some declines in ticket prices, but the overall ad revenue growth has been fairly steady over the past several quarters,” said the company’s president and CEO, Mike Siegel.
“The numbers don’t support the notion that the concert industry is in a recession.”
The drop is being driven by a combination of factors, he added.
Ticket prices have gone up as a result of a lack of competition and ticket prices are going up faster than the rate of inflation.
“They’re not going up as fast as they were, but they’re going up significantly faster,” he said.
Siegel said Ticketmaster will not change its strategy in 2019 and 2020, but said they will be working on ways to make up for the lack of revenue.
The company has a range of initiatives to try and mitigate the drop in ticket revenue, from increased advertising to new promotions to increased ticket pricing.
But the concert advertising industry has been hit hard by the recession, which has seen attendance drop across the board.
In Ontario, there have been almost 1,000 cancellations in the last year alone.
And the industry is still reeling from a record $2.9 billion in revenue last year, which includes losses from the concert cancellations.
Sauer said the industry was still adjusting to the drop, and said there was no easy solution for the concert ad industry.
“There’s no quick fix,” he told CBC.
“It’s a slow process that’s going to take time.”
Siegel also noted the concert advertisers’ “unique ability to adapt” to the changes in ticket pricing and ticket sales.
“This is an industry that is so different from the other industries,” he added, saying he was happy to see advertisers “have the flexibility to move forward.”
Ticketmaster said it’s working on strategies to adapt to the economy, including increased advertising, better pricing and a “fair share” approach for ticket prices.
It said it would work with its ad partners to ensure that all advertisers have access to all of the opportunities that exist for them.
“While we are not optimistic about the concert market going through the next downturn, we continue to believe that this industry is ready for a sustained rebound,” the company said in a statement.
“As we move forward, we’ll continue to invest in ways to ensure our advertisers have the best advertising options available to them.”