Music: Adland faces the music

The power struggle between the advertising and music industries continues apace. What can they do to turn combat into co-operation, Steve Hemsley asks.

Universal Music has been encouraging ad agencies to license songs from the Scottish band Texas' forthcoming album Red Book, but with little success. And EMI Music Publishing is mystified as to why it has failed to secure any interest among advertisers for James Blunt's music, despite the singer topping the singles and album charts this summer.

The fact these two music industry giants still find it so hard to match artists with the needs of the advertising community says a lot about the relationship between these two creative and passionate businesses.

It is a partnership that has traditionally been strained and full of suspicion. Record companies and music publishers accuse agencies of leaving the choice of songs to the last minute and not appreciating the value of music. They also slate client briefs for being too confusing and contradictory, and say agencies expect global and all-media rights for a track but will rarely spend more than 2.5 per cent of the production budget on music.

In the other corner, the music business is criticised for taking too long to clear rights and not indemnifying ad agencies if clearance fails to materialise after weeks of waiting. Agencies also complain that they are being charged too much given the huge promotional window television exposure provides for bands.

Agencies are also distrustful of the record labels' own marketing agenda, accusing them of peddling bands that have new singles or albums due for release, rather than offering tracks that meet the agency's brief. Texas' new album is out on 31 October, by the way.

"We are two very different industries and both want the other to work how we work, and that is never going to happen," Tracie London-Rowell, Universal Music UK's director of film and TV advertising, says. "The music business is perceived as being full of money-grabbing bastards, but the market is changing and we understand we need to be more flexible."

London-Rowell points out that rather than get too hung up over attempts to push songs from a new album, ad agencies should be more open-minded.

She urges creative teams to see the cost and brand association benefits of licensing tracks from an established band before the songs become hits and licensing fees rise.

EMI Music Publishing's managing director, Guy Moot, accepts his company will push certain songs but he is frustrated that few advertising executives really appreciate the importance of music to an ad campaign.

"Many advertising people do not get a warm feeling about music because they see too many obstacles. We want to work with agencies to exploit different marketing opportunities, especially across new digital platforms," he says. "We also have a strong team of song writers who could be writing more exclusive songs for ads."

The music industry may be offering an olive branch, but ad agencies remain wary. Agencies claim this is happening only because the record business is suffering from falling singles sales and internet piracy, which is hitting revenue.

Bartle Bogle Hegarty formed its in-house music publishing arm, Leap Music, in a joint venture with the former Zomba Music Publishers executive Richard Kirstein in 2003. BBH says the pressure record companies are under means agencies can negotiate better value-synchronisation deals.

The creation of Leap did nothing to smooth over the cracks between the two industries. Record execs accused BBH of creating an unwelcome divide and invading their territory.

The head of TV production at BBH, Frances Royle, is unrepentant and says Kirstein's experience has sped up the licensing process because he knows exactly who to speak to and whether a fee is fair. Indeed, Kirstein's knowledge of the music industry is probably unrivalled in adland.

How much an agency should pay for a song is a complex calculation. It depends on an act's chart pedigree and profile as well as how enthusiastic the band is to be linked with a product - a thorny issue in itself. "We can push for better deals but we may still have to use different tracks for different countries if the cost of a multi-territory licence is too high," Kirstein says.

JWT's head of TV administration, Tim Millin, is more sympathetic to the record business and accepts music should be introduced into the creative process earlier. He also understands why rights owners are annoyed when agencies try to negotiate on a piecemeal basis by adding extra territories months after a deal has been agreed.

"If you talk to the rights owner in plenty of time, put your cards on the table and say this is your budget, most music companies can be flexible," Millin says. The negotiation and cost of rights is at the root of the distrust in this market, fuelled by the on-going debate about who needs who more. A great song can make or break a commercial but an ad is a valuable promotional tool for any record company.

Contracts are also more complicated these days. Agencies will want all media rights across many territories and, with singles sales declining, are starting to negotiate a royalty rate for any album sales generated on the back of a licensed track.

This has been prompted by the trend for record companies to exploit interest in a song by putting it on an album. Examples include Velvet Underground's I'm Sticking With You used in a Hyundai commercial. It was not originally on the greatest hits package but the album was quickly re-issued containing the song. More recently, Norman Cook wrote a track for O2 that was added to the Fatboy Slim album Palookaville, boosting sales this year for Skint Records.

Ultimately, the choice of music for an ad will depend on the emotion the creative team wants to generate rather than whether a song can produce any incremental income for the agency or brand. With this in mind, it is hard to point to any commercial where the music selection was actually wrong - this is just so difficult to measure. There are things agencies should avoid, however, such as using tracks with lyrics that clash with the ad's narrative, or choosing music considered too bland for the product being advertised. It is understood this was one of the reasons EMI Music Publishing has had trouble licensing Blunt's hit single You're Beautiful.

Record companies often criticise agencies for not testing the music they select. Entertainment Media Research's founder, Peter Ruppert, wants to work with agencies that should, he says, base their decisions on more than gut instinct. "They should be asking themselves if the brand values of the artist fit the image and qualities of the product their client is trying to promote."

One way to avoid the often exasperating round of telephone calls to discover who owns the rights to a song is to use a music consultancy. "With so many misconceptions about both industries, the solution is for both sides to play to their strengths and recognise that synch licensing is ultimately a small piece of their respective businesses," Richard Corbett, the director of the music consultancy Ricall, says. "Record companies and publishers do not have the core competencies to develop creative hooks for brands in the same way ad agencies have no expertise developing music and selling it."

Despite the reluctance of some agencies to go with unproven tracks, many will adopt unsigned or newly signed acts in commercials for creative as well as the obvious cost reasons. "Agencies are more open to using up-and-coming artists because they realise the association an act could bring to a brand over the long term," Barbara Zamoyska, the head of film, TV and advertising at Universal Music Publishing, says.

Leap Music has begun purchasing material from unsigned bands. Earlier this year, it sourced the song Finding Your Feet from the unknown act The Aches on behalf of the advertising agency Mustoes for an HP Sauce commercial.

Although there are tensions between these very different but equally creative businesses, there is mounting evidence both industries want to collaborate more.

EMI Music Publishing and Abbott Mead Vickers BBDO worked together to produce this summer's commercial for BT Broadband's iTunes promotion.

Four of the five tracks were from EMI, including A-list songs by the bands Blur and Supergrass.

"Rather than having the first discussion about the music in the final few days of post-production, we were sending over music to the producer and getting feedback at script stage and during the shoot. This has to be the way forward," EMI's director of commercial markets, Adrienne Dunlop, says.

The IPA and the Music Publishers Association operate a liaison group and have produced a joint document that includes all the questions agencies might have with regard to licensing music. The MPA has also published notes to explain why it can take time to get rights cleared - an artist could be on tour or a deal may have to be okayed by executives in the US. There are countless possible reasons.

The group last met in August to agree the terms of a standard music synchronisation document. The meeting could lead to a reduction in agency lawyers' fees.

Just how many promotional CDs MPA members casually left on the table for agency bods to pick up is unclear. But you can't blame them for trying.

WHY THE RINGTONE IS A VIABLE ADVERTISING MEDIUM

The line between entertainment and advertising on mobile phones is blurring as music from ads and sonic logos ring out in high streets, on buses and in offices across the UK.

The UK ringtone business could be worth £132 million by the end of the year, according to Informa Telecoms and Media, and the music and mobile industries want to work with agencies and their clients to exploit this growing medium.

Jack Horner, the creative director at the music marketing agency Frukt, says brands must look beyond simply licensing music for a TV ad. "Mobile provides a new channel for advertisers, not only making a track used in an ad available as a ringtone, but also as a way to help sell full-length tracks and mobile games," he says.

Globally, the market for ringtones is estimated to be worth between $3 billion and $5 billion (the global music business is worth around $30 billion). In May, the UK's official ringtone chart celebrated its first birthday and unit sales eclipsed CD single sales last year. Yet record companies feel many brands have been slow to see the potential of this market.

Rob Wells, the divisional director for new media at Universal Music UK, says the ringtone is just one of a number of digital spaces being overlooked by advertisers. "They are missing a trick or two - from allowing consumers to download ringtones directly from commercials, to not using red button technology so people can purchase an album featuring the licensed track," he says.

Ruth Simmons, the managing director of the music consultancy Songseekers, says brands need to realise how much music can benefit them. "If the music associated with a brand is exploited effectively, a consumer will not see it as advertising," she says.

One reason brands have been slow to exploit digital music media is, she says, "because, ultimately, the person choosing the music for an ad has been a TV producer. Maybe it is time for digital marketing experts to have more input into the licensing of music for ad campaigns."

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