Music Marketing Budgets Explained

Part One - Overview and Reality Check

By: Jai Hutcherson

This series of articles have been written to help independent artists, musicians, and record labels prepare for the costs associated with marketing music regionally or nationally. This is not a marketing plan, rather an overview of what monies will be needed to market music through awareness campaigns, radio solicitation, retail marketing, publicity, internet promotion, and offline street team promotions.

Overview:
When considering the costs associated with marketing music many independents forget the “small costs” that add up to be higher than what is typically considered the “big cost” of a marketing budget. These “small costs” include: man power, information, marketing material, postage, gas, promotional shows, printer ink, food, and hotels. Together, these “small costs” can add up quickly and become the “largest cost” of a music marketing budget. In fact, these “small costs” are what usually eat up entire budgets of independent artists, musicians, and record labels far before one cent is spent on actually buying a magazine ad in Radio and Records Magazine. For this reason it is very important to consider the entire cost of music marketing techniques, ideas, or plans before trying to execute them.

Let’s look at a what is typically considered a cheap marketing idea: Pre-show street team promotions. Most independent artists and record labels feel that sending a team out into the streets before a show to attract potential fans to the show is a cheap method of marketing. “Hey I have a few friends, we can hit the streets, pass out some flyers, and talk to folks...right” Well, yes, but what are the costs really associated with this marketing plan? Remember, we are talking about regional or national marketing. You are not at the local club down the street, you are in a city away from home.

Here are some “small costs” that will be associated when using a street team:

• Gas to the city of the show
• Food on the way to the city and while in the city (times 3 if you are doing it right)
• Hotel once you arrive in the city (times 3 days if you are doing it right)
• Gas to drive around the city finding the hot spots to pass out flyers
• Payment to local promoter for information about the hotspots (they will want to be paid)
• Cover charge at the hot clubs to get to the people who might show up for your show
• Flyers to pass out once you find where to pass them out
• CD singles to pass out
• T-Shirts to pass out
• Posters
• Phone bill, sure you have a cell phone that has unlimited minutes, but it does cost!
• Tape to tape up posters, flats, etc.
• Staples to staple up posters, flats, etc.
• band-aides for when someone staples their hand (It will happen trust me)
• Aspirin (It’s your job to keep your team happy, healthy, etc. to be effective)
• Bottled water (again, you have to keep the team healthy)

This is only the tip of the iceberg. What about labor? Sure they are your friends or guys/girls that are in the band/group/label. But they have to make a living. Remember, this is not your home town. With travel time your street team will be away from home for more than three days, four if they want to stay for the show. They can’t go do a little street teaming at night then go to work the next day. They have to be committed to your project if the marketing is going to be effective. This means you have to pay people to actually be on the road and part of your street team.

You get the point. At home, in your home city where you have a lot of friends that want to chip in and help, allowing you to use several different people to fill the role of a street team when others are at work or unavailable, it’s easy and cheap. You have little gas money involved, you know where the “hot spots” are, you can sleep at home, and your team will be expected to eat before they show up, meaning you don’t have to feed three to four people two times a day.

On the cheap, and by cheap I mean real cheap, you will spend $200-$250 per day your street team is out on the road. This is for three people, gas, hotel, food, and paying for a bit of information along the way. This does not include promotional material. Reality, full blown independent street team marketing projects cost about $500-$750 a week, per region, to really be effective. That includes three people, food, gas, hotel, marketing material, everything.

As your popularity grows as an artist, musician, or record label you will be able to cut those costs dramatically by using your fan base as street team members in each city you visit. Once you have a fans base to draw from you will only need to send a street team leader out to each city. Plus, as you visit each city your street team should build a database of information like cheap hotels, restaurants, hot spots etc. This will cut out the need of using a local promoter for information and your “local fan base street team” will be able to help you gain any additional information needed.

This is only the overview of this series of articles and you can already see the high costs of the “small costs” associated with music marketing. Many, many independent artists, musicians, and record labels have had to stop marketing plans because they fail to properly budget for the “small costs.” Any music marketing plan, idea, trick, or technique must be planned to the smallest of detail well in advance of executing. It is more important than the actual execution. A music marketing plan that has to be stopped in the middle of execution or short cuts taken because money runs out can actually hurt an  independent artist, musician, or record label more than simply not doing or scaling back a plan. How? Streets talk. If you are here and screaming “We are the next big thing” and then are suddenly gone, you “were” the next big thing!

Overview - Part Two

Most independent record labels, artists, and musicians do not consider or execute follow up marketing and tracking. Therefore, they do not budget the costs associated with executing. This is a big mistake as it is the only way you know your music marketing efforts are “paying off.” Tracking and follow-up marketing tells you if your efforts in a particular plan, idea, or technique actually gave you the return you expected. Ahhh, there is the rub. You can’t track results if you didn’t consider what you wanted out of your efforts. Simply sending a street team out in the streets and not knowing the goal is wasting money, time, effort, and resources in the worst possible way. Why? Because you have no way of knowing if your efforts are working so you may continue throwing money at something that is ineffective time-and-time again. Plus, goals are motivational tools. How can a street team push themselves further and harder if they have no goal? How can you know if your street team is ineffective and when it’s time to replace members that do not execute and reach goals if there are no goals?

Follow up marketing and tracking is a fundamental piece of the music marketing puzzle. In most cases it is the missing piece of the puzzle that separates independents from the majors. Major record labels have follow up marketing and tracking down to a science. They know exactly what is working, what is not working, and the “whys” of both. It is why they out-market independents. Common thought is that major record labels have more money. This is true to a degree, but why do they have more money? They started as an independent themselves at one point. They have more money because they learned or hired someone who already knew how to effectively market music which includes follow up marketing and tracking to ensure every dollar spent gets more dollars back in marketing returns. This is often times referred to as ROI or Return on Investment.

Follow up marketing and tracking tells you that for every dollar you spent executing your marketing objective you received “XXX” dollars back. (ROI) Here is a brief example using the street team mentioned earlier. You send your team out to a city three days before a show. It costs you $400. If you are performing at a club and you are getting a door split of 80% and the ticket prices are $10 you will receive $8 per person that comes to see your show. You have to get at least 50 people through the door to break even. That does not include the travel, accommodations, etc. for the actual artist/group and the support staff for the actual show. But keeping it simple... Your first goal from your street team efforts would be 50 people. You second goal would be to make a profit. A good starting point would be 50 additional people through the door. If this goal is met, you would have a ROI of 100%. You would profit $400 for your street team music marketing efforts.

Now, how would you apply follow up marketing and tracking to let you know if your efforts worked? In this simple example the first step would be to count your money at the end of the show. If you only have $200 in hand you would know that your efforts missed the mark and you would know that you need to rethink your plan, execution, team, and even weather or not your artist/group is commercially sound (more on artist later). If you have at least $400 in hand then you know that your efforts somewhat worked. And, if you have $800 in hand then you know you hit your goal and the street team’s music marketing execution reached it’s goal and ultimate expectation. But follow up marketing and tracking does not stop there.

You next objective in follow up marketing and tracking is to understand the “why.” If your team did not hit their goal you have to find out why. How many flyers did they pass out, where did they hang poster, how many local DJs did they talk to, where they able to find the local tastemakers and trend setters? All these questions and more need to be discussed, reviewed, and logged into a marketing database for each city/region. Then you reach out to the people that came to the show. How? If you are effectively marketing then you should have had someone walking around the club/venue the night of the show getting folks to sign up with email address for the artist/group/label newsletter. Right? Reach out to these folks and thank them for attending the show. Then ask them how they found out about the show, where they were, what promotional material they saw, received, etc. Then go further and ask them about their marketing experience. Ask them how your team could improve their efforts. This is follow up marketing at it’s best!

Tracking your music marketing efforts begins with follow up marketing. Once you start to get results form your team, people that attended shows, etc. you will input that information into a database. This is tracking. you can now use that information to adjust, change, abandon, or further you marketing efforts in the future. Once you know what works it’s easy to get more people to come to shows, buy CDs, or join fan clubs. You simply use the information you gathered during your follow up marketing and tracking execution and adjust your marketing goals, plan, and execution.

Follow up marketing and tracking takes time, resources, and labor. This equals money that has to be budgeted for when creating your music marketing budget. This is on of the “small costs” that will add up.

The next article in the series will go much deeper into street team marketing costs and how to budget for the unexpected! Until then, information is king! Go to google and do a search for music marketing, read everything you can. As you learn more you will be able to better budget for all your marketing ideas, tricks, techniques, and plans!

Peace,
Jai
“Love the Music in Yourself, Not Yourself in the Music!”