October 15

How To Handle Increased Costs Of Music Marketing Part 1

Digital Marketing, Finance

Alright, let's get this out of the way first: it is still incredibly easy and affordable to market yourself as an artist or creator. There has never been a better time to be a content creator. Compared to even just 10-20 years ago, we have an overwhelming amount of tools available at our disposal to get more fans, even on modest budgets of a few dollars per day.

That caveat aside...

Costs For Music Marketing (And Really All Digital Marketing) Are Going Up

Across the board, reaching people on platforms like Facebook, Instagram, Google, YouTube, and others costs more. Attribution is getting harder to understand. And, frankly, it's easier to waste money without really knowing what the new benchmarks are. 

This is in stark contrast to even a little over a year ago when it had never been cheaper to advertise digitally. Of course, those were terrible circumstances — much of the world ground to a halt and businesses stopped spending money altogether in the face of severe uncertainty. 

The reality is we're much more likely to see music marketing and other forms of digital advertising stay as expensive as they are or continue to increase than to see costs revert back to pandemic or even pre-pandemic levels. 

It's easy to blame an increased focus on "privacy" as a selling point. Certainly Facebook launched an all-out campaign against Apple when the company decided to put a focus on reducing how advertisers can track customers while using Apple devices. And while the iOS changes, as well as a host of other changes from Apple and other companies, are certainly leading to increased advertising costs and decreased understanding of attribution, the reality is as content creators we simply can't get comfortable with one marketing strategy.

Some Older Strategies May Not Be Tenable Anymore 

The most important way to address increased costs is to rethink what you're trying to achieve with your advertising dollars. Are you trying to increase your music streams?  

There are a lot of resources on advertising strategies to increase your streams, particularly using things like Instagram Stories ads. The issue is that this strategy is rife with potential issues and errors. Considering the increased costs, it might not be tenable to spend money here anymore, unless it's one part of a larger strategy and you have a substantial budget.

That's not to say it's not potentially still beneficial. We've helped artists run these kinds of ads in the past to good success — if the metric for success is, "I want more listeners."

Even the best music marketers spend hundreds to thousands of dollars simply on testing and struggle to get the cost of a new listener in the United States or similar countries below $.30 per person. The average is much higher — even three times that. It wasn't always this expensive, but now the unit economics make even less sense. 

The belief is that by driving people to listen to your music on these platforms, it will eventually help "trigger the algorithm" and lead to exponential growth. And it's not a *bad* strategy per se. But it's very much a long tail strategy and you'll need to be prepared to release a lot of content and spend thousands of dollars before hopefully either recouping from the platform over the following years or just having some of those listeners turn into fans who financially support you other ways. 

These are the types of campaigns you'll see most frequently, and these — along with things like video views and engagement campaigns — have all increased in costs globally, often by 200% or more. Could you target cheaper countries? Sure, but you'll still at best be losing money more slowly — and introducing yourself to other potential issues around your audience.

Rethink Your Goals

So what does it mean for you? For one, don't panic. Yes, doing the old things costs more now. But the changes affect just about anybody running ads and now is a great time to rethink what you're trying to do with your marketing efforts. 

If you see yourself as a small business (which you really should), think about what makes the most sense. For most small businesses, revenue drives the model. They need operating capital and that only comes in the form of sales. 

On the other hand, some companies try to get as many users (free or otherwise) as possible and then monetize them later. We see this happen a lot in the tech space. Consider a company like Clubhouse, which raised millions and millions of dollars to continue onboarding millions of free users. These companies and the various individual investors and funds that financially support them expect them to be able to monetize those users in the future and are willing to spend a lot of money without any return in the present to get them.

This is, to an extent, how some label backing functions as well. In the traditional system, a label essentially loans a bunch of money to an artist for them to make and market content, hoping that the label's ownership of the content ultimately pays off and the fans come later. Of course there are infinite degrees of deals and you'll often see labels spending more time investing in artists who have already proven some degree of financial return (typically through streaming or some other asset they can easily obtain ownership of). 

Focusing Solely On Streaming Requires A Bigger Budget

When your music marketing goals focus largely or entirely on streaming, you're kind of taking this "users first, money later" approach. Yes, you do get some money from streams, and yes, you can lead users to streams with some free assets. But the amount of time it takes to drive people to these platforms is still a cost — because remember, even if you're not putting in physical dollars making social posts and reaching out to people, your time is valuable, tool.

And you need to reach significant volume for streaming to turn into an asset that can truly fund you as a full-time creator. So unless you have a significant budget (whether it's money, time or both), spending limited resources attempting to drive streams could lead to burnout, financial and otherwise. 

So what if you don't have the financial resources to spend a lot of time just trying to increase awareness so that one day you may be able to monetize finds? You need to think about how every dollar in could eventually translate to more dollars out. This comes down to what a lot of businesses understand as their "80/20" rule — where 80% of a company's revenue typically comes from 20% of its inventory, services, or in a creator's case — fans. 

Quality Over Quantity

This should really always be a focus for creators, but it's even more important when you're funding your business from the revenue you're making early on. Most of your revenue will come from people who want to support you and consume everything you put out. It comes from the people who want to join your fan club, tip you because they can, buy every new piece of merch. 

And these people exist, even for brand new bands. 

That's why it's important to think about who and what you're trying to do with limited time and money to market. In the next article, we'll talk more about some good metrics to pay attention to and goals for your marketing, given how much more it costs to reach people now. 

We'll also look at a few of the different common platforms where you can run ads and how they might be useful.






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