The Ad-Agency Angle - advertising agencies are getting rights to use songs in advertising various commercial products

Brandweek, May 24, 1999 by Teresa Buyikian

Navigating The Ins And Outs And Rising Costs Of Licensing Music

Start Me Up. You Really Got Me. Ready To Go. Da Da Da. When you hear these lyrics, is it the artists (Rolling Stones, Van Halen, Republica, Trio) you think of? Or is it the products the tracks have been licensed to endorse (Microsoft, Nissan, Mitsubishi, Volkswagen)? Either way, over the past several years, ad agencies have seen the enormous popularity of licensing pop and classic tracks to advertise cars, burgers, computers and pretty much anything their clients have to offer. This popularity has proven beneficial to both the artists and the products their songs push, as well as to the record labels and publishing houses. Ad agencies are finding that, with this popularity, licensing has evolved.

TIES THAT BIND

"It's the relationships, stupid." The saying, common in the ad community when describing the nature of agency-client partnerships, can also be applied to the ways shops go about obtaining the rights to a certain song. "It really helps to have good relationships [with the labels and publishers]," according to Amber Lavender, business-affairs supervisor for Portland, Ore., shop Wieden & Kennedy. In the past few years, these relationships have become increasingly important as publishers and labels get more and more licensing requests. Lavender heads up the agency's in-house efforts with a team of four, working for such clients as Microsoft, Diet Coke and Miller Genuine Draft and, frequently, with the licensing departments of such companies as EMI and Warner Chappell. The agency bandies almost all of its licensing efforts in-house, contacting the publishing houses or labels directly (unless their client has a pre-existing arrangement) versus utilizing outside brokers. The team recently secured the rights to use country-rockers the Mavericks' song "All I Get" for an upcoming Microsoft spot and, earlier this year, broke a new Diet Coke campaign featuring the music of Peggy Lee.

Occasionally, though, it maybe necessary to utilize the services of a licensing broker, like Jill Meyer in Los Angeles or The Albert Company in Cannel, Calif. "It is important to establish relationships with your licensing companies," says Diane Barrett, broadcast business manager for Asher & Partners, Los Angeles. "But sometimes a broker has a better relationship." The agency, which has previously licensed work from Carlin Music for the New York-New York Hotel & Casino, is currently working with Albert and EMI to secure music for an upcoming campaign.

TBWA/Chiat/Day's senior business-affairs manager, Christine Corden, agrees that the relationships are important, and she occasionally utilizes brokers for larger projects. "We're staffed and experienced to handle [negotiations] in-house, but if it's a big project, like securing 10 pieces of music, we use a broker." The agency was one of the forerunners in the use of licensed music with the "Toys" spot for Nissan, which used Van Halen's 'You Really Got Me." It recently licensed the Rolling Stones recording of "She's A Rainbow" for Apple Computer's IMac.

HERE COMES SUCCESS

Mitsubishi agency Deutsch has tasted the success that the use of licensed pop tracks can bring. It used Iggy Pop's "Lust For Life" and Republica's "Ready To Go" for Mitsubishi's 1999 Galant launch campaign. Sales figures confirmed it worked on both ends of the spectrum.

"We sold as many Republica CDs as we did Galants," comments Deutsch creative director Eric Hirshberg. Seeing how high-energy pop helped to move vehicles, the agency secured the master rights from Sony to use Ozzy Osbourne's "Crazy Train," an unlikely choice for Mitsubishi's 1999 Montero Sport SUV. "We wanted to infuse the brand with the same coolness [as the song], and appeal to the market that wants cars not everyone else is driving."

A little-known German band, Trio, also got its spot in the U.S. sun for its song "Da Da Da" used in a Volkswagen Golf ad in 1997. The song, which was only a minor hit in Europe, according to Anne Joynt, broadcast business manager for Arnold Communications in Boston, experienced heavy U.S. airplay after the spot broke. The same was true for the 1998 launch of the new Beetle, for which the campaign soundtrack consisted of bands like Spiritualized and the Orb. The bands weren't the only ones cashing in; VW experienced a 60% increase in sales for 1998. The agency recently continued the trend and used the music of jazz great Charles Mingus in a successful spot for this year's Volkswagen Jetta.

THE TIMES THEY ARE A CHANGIN'

All this success has not gone unnoticed when it comes to billing. "Licensing being so popular with advertisers, the costs seem to be rising," says TBWA/C/D's Corden. "Songs that we licensed a year ago [at one price] will be 10% to 20% higher today. If you're going to buy a Billboard top-l0 song, it can cost upward of $1 million."

The Internet is also playing an increasing role. After creative directors or editors give a song request to the agency's business-affairs department, they previously had to find the CD or look up the song in a licensing book to see who owned the rights. "Now, research has been really helped by Web sites and e-mail, and people aren't as shy about negotiating [electronically]," says Arnold's Joynt. Several labels have their own Web sites, and publishing rights can be found via such sites as NMPA.com, BMI.com or ASCAP.com. Although the actual request for a track still has to be sent (often faxed) in writing, negotiations with international publishers in different time zones has been made easier due to the Internet, notes Joynt.