Close-up: Live issue - Can adland save the music industry?

A music track in an ad can help both band and agency, provided the price is right.

The relationship between advertising and the music industry has long been one characterised by an unusual level of symbiosis.

The judicious use of music has incredible power to lodge a brand in the public consciousness; likewise, the exposure a commercial creates can give a band the push it needs to break the charts.

Just ask Stiltskin, whose grungey anthem Inside was the soundtrack for Bartle Bogle Hegarty's "creek" spot for Levi's. The track shot to number one on the back of the ad, and led to the hasty formation of a band-proper (it didn't even have vocals when the ad was made) for a Top of The Pops spot.

Today, the level of collaboration between band and brand is more complex than ever, to the point that record companies and music publishers are becoming reliant on advertising revenue. This is most commonly in the form of synchronisation rights paid by agencies for use of a track, which are a major revenue stream for a music business increasingly starved of cash.

The supply and demand nature of the market means that prices are continuously being forced down, though. Sometimes to the point of non-existence. Record companies are often asked to provide a track gratis, with the promise the ad campaign will make the song a chart hit.

"Ad agencies will always try to get the most out of their budgets, so they'll always try to drive the music down. It's vital songwriters and musicians realise there's a value to their music, and that their music is adding a value to a campaign," the EMI Records music promotions manager, Melanie Johnson, says.

Speaking at The Great Escape, a recent music industry conference held in Brighton, Dominic Caisley, the music director at Stream, TBWA's brand entertainment arm, highlighted the changing relationship between advertising and the music industry. He said greater collaboration and a re-evaluation of traditional remuneration can be beneficial for both industries.

"Brands are adopting the record label model. They are producing music and distributing it, which means they're getting involved in the revenue stream as well, including rights ownership and sales of the track," Caisley says.

He highlights the trend with a recent example for the launch of the Nissan X-Trail. Stream collaborated with the Brighton-based record label Mr Bongo to produce the track Follow Me, by Tejo, Black Alien and Speed, and used a Fatboy Slim remix on the TV spot. As part of the deal, Nissan received a royalty payment as well as taking a share in the sales revenue.

Such creative collaborations will only ever yield a relatively small amount of revenue to both parties, though. Robin Kent, the former chairman and chief executive of Universal McCann, and the founder and president of Rebel Digital, argues that advertising could eventually be the saviour of an industry crumbling under the onslaught of illegal, free downloads.

Kent's previous venture was the controversial Spiral Frog - a website that aimed to give free, legal downloads funded by advertising. Rebel Digital is consulting on similar ventures, although Kent warns that the music business needs to be more realistic about the level of funding advertising can bring.

"The music industry has to look at its business model again. The 99 cents-per-track model isn't going to work; advertisers can't afford that price for a song en masse," he warns.

Got a view? E-mail us at campaign@haymarket.com

TBWA MUSIC EXPERT - DOMINIC CAISLEY, music director, Stream - "Music and advertising is a mutually beneficial partnership. If the artist is doing well and there is a successful sonic trigger that has been established, when you hear the artist, you think back to that brand, then it goes hand in hand.

"We have a golden rule that the music has got to be right for the ad. Just because an artist has a new album or single coming out, or is about to make it huge, it doesn't necessarily mean that we're going to stick it in our ad."

EMI MUSIC EXPERT - MELANIE JOHNSON, music promotions manager, EMI Records - "This is a bit of a watershed moment in the industry - with declining record sales, sync is becoming a real revenue stream for music publishers. To do something for promotional value only - give away your music for free - is very dangerous for music in the long term.

"Revenue share is a dangerous road to go down. We put a lot of time, effort and passion into developing a track, and now agencies have the muscle and - sometimes - the money to come in and say: 'We can make you number one.' I don't think we should do it. Unless someone is going to give me three pence for every pair of jeans sold, why should I give them half of my publishing income?"

CONSULTANT - ROBIN KENT, president, Rebel Digital - "Music and advertising are a natural fit. These days, if you want to reach anyone under the age of 35 through advertising, you'd better have a branded internet campaign. Music plays such an important role in internet users' lives that brands and music coming together is critical.

"Does the music industry deserve advertising dollars is a question? Clearly, there is a lot of money in advertising - $640 billion is spent worldwide, and that's going up all the time. Against the music industry - $30 billion - the money's there. Is the money going to come to the music industry, though?"

BBH MUSIC EXPERT - SUSAN STONE, music services manager, Leap Music - "Music and advertising work hand in hand now, but it's important that we remember we're suppliers to the agencies.

"At the end of the day, it's the client's P&L we're responsible for.

"I think what's exciting is that the lines between art and advertising are becoming blurred. From an advertising perspective, there's more artistic opportunity.

"Advertiser-funded tracks have to be transparent, though. The Lynx I See Girls track was never packaged as coming from anything other than from the ad."