For all advertisers, campaign success relies on many factors. High on the list is close collaboration between different departments and alignment around common objectives. Using a musical metaphor, it’s essential that different disciplines work in concert, like an orchestra, even if their tonal characteristics may vary.
In a past life, I worked for a large music publisher whose MD who used often-repeated mantras to educate his immediate reports. He once described how the commercial A&R arm, which courted and signed songwriters, had their foot on the accelerator, whilst Business Affairs had their foot on the brake. This analogy spoke to the need for balanced risk assessment to achieve positive creative and commercial outcomes. In essence, court and sign the right talent, but only if the deal makes sense … and walk away if it doesn’t. There was gleeful Schadenfreude when rival music publishers overpaid on advances to sign hot songwriters following which their singles and albums failed to meet expectations.
There are parallels in music licensing for advertising.
Over many years working in this space, I’ve observed the following departmental traits within advertisers:
Marketing
- Frustration with Procurement around cost management and perceived interference in creative
- Frustration with Legal around risk management and perceived interference in creative
- Procurement and Legal are kept out of the loop until it’s too late to effect change
- Piecemeal decision-making around campaign Deliverables and Usage requirements
- Close to financial Year End, remaining annual budget is “panic-spent”, irrespective of value add
- Creatively-led stance, following the lead of their creative agency
- A attitude of “the brand always gets what it wants”, sometimes at whatever price
Procurement
- Frustration with creative agency around single bid music deals with little or no leverage
- Frustration with Marketing around “finding more money” on out-of-budget music deals
- Depending on background, Procurement teams can sometimes view everything as a commodity
- Failure to understand that commercially -released licensed music is not priced by rate card
- Unrealistic expectation that music rights owners should behave like service provider vendors
Legal
- Frustration with Marketing around:
- Poor risk management
- Keeping Legal in the dark to avoid early intervention
- Leaving Legal to “clear up the mess” when poorly-brokered deals turn sour
- Unrealistic expectations that music rights owners should:
- Behave like service provider vendors
- Use advertiser’s template licences with uncapped indemnities
- Agree boilerplate terms, but still allow advertiser to keep amending them
Whilst the above lists may seem like gripes, these issues have been recurrent during two decades of acting for brands and agencies. As a consultant, it’s not uncommon for me to hear one department openly criticising their colleagues and/or creative agency, albeit in confidence, venting frustration at their behaviour.
There’s a clear opportunity here to bridge the gap, whereby different disciplines align around common objectives for better creative and commercial outcomes.
Let’s articulate key goals:
- Great music, driving engagement – creative outcome for Marketing
- Bought at a fair price – cost management outcome for Procurement
- Licensed under fair T&Cs – risk management outcome for Legal
How can each department get what they want? Here are some suggested best practices:
Marketing
- Mandate creative agency to make early music recommendations: hero and 2 X back-up tracks
- Early brand team decisions on Deliverables and Usage requirements – and stick to them
- Early brand team decision on Music Budget – and stick to it
- Involve Procurement and Legal from the outset – Mandate that creative agency must cooperate
Procurement
- Mandate making low-ball offers to rights owners rather than requesting quotes
- Mandate triple bidding i.e. simultaneous negotiation of hero and 2 X back-up tracks
- Guard against “finding more money” which music rights owners always believe will happen
- Mandate direct billing relationship between rights owners and advertiser for full transparency
- Challenge any commission-driven intermediaries, engaged by agency, who broker licence fees
Legal
- Mandate direct contractual relationship with rights owners for full transparency
- Become familiar with business affairs “custom and practice” of music licensing sector
- Respond quickly to incoming draft licences
- Seek a fair and balanced outcome, which necessitates some compromise
- Seek negotiated boilerplates, which can be repeatedly used, and stick to agreed terms each time
Music licensing is a complex and often opaque purchase category for brands. It’s a sector in which industry custom and practice can appear nonsensical to the different advertiser departments, driving non-alignment and poor outcomes. If you have any questions, please get in touch on richard@resilientmusic.com.