Music Ad Tips YOU Need (From A Profitable Record Label) feat. spiration music

Automatically generated transcript (may contain errors):

Speaker 1 (00:00.234)
Alex, if you only had one minute to give music artists the best music marketing advice you possibly could, what would you say, one minute?

I will stick with MetaAd’s marketing advice for this and it is the most important thing to test in your ad campaigns are the song. Whether it’s parts of the song or just the song itself. It’s number one. It’s also the hardest thing to test because to test a new song, you have to spend a month or more creating one. Second most important thing is the visual.

Also, harder to test than some other aspects of the ad campaign. A little bit easier than the song, but it’s number two. And then the third most important thing…

even though it’s still necessary to have it right is the structure of the campaign and the targeting things. Those super easy to change. You can do it in like five minutes. You can’t create a whole new visual in five minutes or create a whole new song in five minutes. But if you want to have the best possible ad results, it’s important to test starting with the song, then going to visual, then going to campaign structure. Most people do it the opposite way and they get subpar results.

When you’ve seen people have campaigns that are going awful, and then you’re trying to fix them and make them not awful, what’s the number one most common reason their campaign is performing bad?

Speaker 2 (01:21.726)
most common reason is that people aren’t don’t seem to be connecting with the song

I think that’s overall true too. mean, like there’s definitely a lot you can do to make a given song do better. But you know, when we’ve had this where we launched a campaign and like instantly out the gate, it’s $3 a conversion and pretty much immediately like we’ll let it run, but it’s like it pretty much right away. We’re like, we’re probably going to have to pivot through a difference.

Yeah. And if, if, if pivoting to a new song isn’t an option, then I would just go down the list and say, well, something can probably be done with the visual component to make it perform a lot better. and even though it’s not as important as the song, it’s still extremely important. And you can cut costs by a ton by having the right visual with the right part of the song in front of the right people.

What’s the biggest change you’ve done in the campaign? Like, you’ve taken the song that was doing like two bucks and brought it down to blah. What’s the most dramatic you’ve turned a ship around?

there are definitely campaign examples that have been close to a dollar per conversion and have come down all the way to twenty cents per conversion and that is really awesome but even when i am able to do that through marketing visual like magic

Speaker 2 (02:42.144)
It doesn’t necessarily mean that the song is still going to perform super well on Spotify or other streaming services. And usually that’s the case. Even if I can bring it down to what would be considered a campaign cost. It doesn’t always perform that it almost never. And I can’t personally think of a single example where I’ve been able to do that and still have amazing results on Spotify. They’re just better than they were at a dollar per conversion.

You run a profitable record label and you’ve been posting about this on YouTube and threads and LinkedIn. And we always get the wonderful spicy comments when you share that like, spent, you know, I spent $5,000 on this thing over the past X amount of time. have this many streams and you have all the people in the comments saying, Oh great. So you made 50 bucks and you spend 5,000 or whatever. But you actually run a, a, a label that doesn’t just burn cash. Like you don’t.

Yeah.

Speaker 1 (03:36.578)
you’re not losing money. I guess walk us through like on the label side, what’s the kind of, what’s the strategy, how do you promote the music and what are the, since you’ve been already public about what are the financials, guess, usually I wouldn’t ask that, but you’ve already been public about it. So if you could share some hints around the financial side, that’d be awesome.

Of course. I, the first thing that’s super important to clarify is whenever I say it’s a profitable record label, it’s like, makes money, but all of the money gets immediately reinvested. I’m like, no money is being taken out of it. So I’m, it’s constantly being forced into a state of not being profitable because, okay, great. Maybe I’ve, I’ve made a three grand in a month, but then that three grand immediately goes back into promoting it more. So.

I just want to make sure that I don’t get misquoted by people who are watching this thinking that I’m talking about like insane profit margins or something.

But like you could not do that. You could just keep your initial investment the same and then cash out all the profit. Yes. Even Spotify did that for the first 15 years or whatever. They every shred of dollar they made, they reinvested. In fact, they spend they would spend more than maybe in debt every year. And now finally, after 15, 20 years of doing that, they’re finally like, OK, let we have to actually we have all the users. Let’s make money. Right. So that’s that’s a

It’s not a crazy strategy and I think a lot of artists should do that with their own music instead of casting out the money, just whatever you make, reinvest it.

Speaker 2 (05:14.402)
And that is definitely true. could just stop spending money this month and for the next, at least the next three months, the check would be the exact same. After that, there’d probably be some decline because I’m not actively promoting things, but it could just keep on going for years still, still bringing in royalties. But I want to make it a lot bigger. So that’s why I don’t take anything out. And the general strategy is everything right now is built on meta ad promotion.

I promote about a third of my monthly budget, which is typically I’ll spend like three to $4,000 in a month. A third of it’s going to be for my labels playlist. It’s just one playlist. It’s music that Twitch streamers can use on their live streams. And so I run ads to that playlist. That playlist grows from the ads. also grows from a little search engine action on Spotify.

And those Twitch streamers play the songs publicly on their Twitch streams. And all of that results in a playlist that essentially breaks even every single month. So, I started out with just doing that and growing that playlist up until around spending a thousand or so dollars on it per month. And then I, I pulled back on that. And then since that point, which was last year around August, I’ve put more.

cash into individual song promotion so a third of the budget goes to promoting the playlist with meta ads and then two-thirds goes to promoting individual songs with meta ads

The genre that your label operates in is EDM and lo-fi. Is that playlist? Because I think before you had both. You had an EDM for Twitch streams, then you also had a lo-fi for Twitch streams. But now it’s one. So did you find one was just the dominant winner and you just focused solely on that one?

Speaker 2 (07:05.822)
I wanted to focus on one because it just made the branding and the messaging just so much easier. So I just decided I was going to go with EDM instead of LoFi. So I don’t accept LoFi submissions anymore and I’m not releasing LoFi. It’s just EDM now. And I’ve pretty much pivoted away from spending anything on the LoFi playlist.

Yeah, and for everyone watching, I believe you gave me a link where people could submit demos to you. That’ll be down below. So if you want to part of Spiration Music.

If you don’t want to have to do any work or spend any money on your marketing, I’ll do it all for you and I will happily go broke doing it.

And if I recall, you do 50-50 splits? Yes. you do typically individual song contracts, right? So you’re not locking in artists for like multi-year deals.

Exactly. The commitment is just for that one song. It’s a 10-year exclusive license, which means we don’t take ownership of the master recording. You keep your ownership, but we license it and you can’t release it elsewhere for a period of 10 years. And during those 10 years, we can sub-license it. We collect all of the royalties on it, except for publishing if you’ve already got publishing figured out. And then we recoup the money we

Speaker 2 (08:30.56)
Invest into the promotion before making the split. But once the song breaks even, we split everything 50 50.

Nice. Yeah. And, know, if you’re watching and you’ve never heard of lady label contracts whatsoever, that is a lot of those terms are common, but also this deal is on the better end of deals. Like a lot of majors, for example, will own the master. Like you hear about Taylor Swift buying back her masters for like a third of a billion dollars or whatever. That’s because the label on the masters, when you have a deal that’s like this, that’s a licensing deal.

you eventually, the artist eventually retains ownership of their masters and then they could partner back with the label or they could partner with a different label or do whatever they want, which is good. I think that’s what labels should do nowadays. like back in the day, labels were taking huge financial risks in front, like, you know, spending hundreds of thousand dollars developing artists. So like they had to like have something to own, but now labels don’t do that anymore.

If a label is taking your masters, they should be taking a huge risk because that’s like a huge thing to own.

Exactly. And so if it’s just one song for a short period and there’s no ownership transfer at all, it’s usually a much more attractive offer for an artist. And for me as the label, that also means that I don’t bend over backwards to do the artist’s bidding. So we’re focused on promoting the song on streaming services, not helping with touring, not selling merchandise. All of that is still up to

Speaker 2 (10:05.324)
the artist and whatever other teams that they want to work with. This is strictly a, we’ll get people to listen to your song on streaming services and hopefully a lot of people.

Now for people who are watching this that maybe are starting their own label, how do you keep track, especially with the playlists and all these different artists, like of how much money you’ve allocated to each project? You have a pretty decent volume of music. One, guess, first question would be how many songs you’re signing a month? And two, how do you keep track of like all the money you spent marketing all these artists? then, you know, it’s a lot of work making ad campaigns for that many things. So I guess some insight on that would be cool for all the label people.

So yeah, it’s four to eight songs per month right now. The total catalog is somewhere between three and 400. I can’t quite remember. And I keep track of all of it with a software called eddy.app and they handle essentially, I put in the information about the contract. add the, the details of the person getting paid, what the split is. And then anytime I have an ad campaign that’s running and it finishes.

screenshot it, upload it as a receipt, put the amount in, and then the software does all of the tracking. Anytime my distributor sends a sheet of sales data, I just upload that sheet and it figures everything out for me. So luckily I can do it as one person because the software does the heavy lifting and all the calculations.

What type of artists do you typically get reaching out to you? Obviously they’re EDM artists, but are they artists who already have some momentum? Are they artists who are just starting off?

Speaker 2 (11:45.77)
It’s both and I’d say most artists are within like their first 10 releases and a few, the small handful, it will have been their first release. But typically for an artist like that, it’s just their first release because they haven’t made anything public. They usually have made a ton of music, uploaded it to YouTube and SoundCloud. but it.

Most artists that I work with definitely are like under 500 monthly listeners. So it’s really nice because it’s not too difficult to take them from that point and then get them up to thousands or tens of thousands of listeners, given their, their campaigns perform well.

For the playlist that you use to promote, you market it as being this like Twitch safe, YouTube safe, DMCA free type of thing, which means that YouTubers and or streamers could use it in their streams and their videos and stuff like that. Have you seen any evidence of that actually promoting the project? Cause on one hand you’re marketing to those people so they’re listening to it all day on stream. But I would think.

The people who watching those streams at some point, they’re going to hear a song they like and they’re going to Shazam it and then they’re going to go listen to it. Or they’re going to find the playlist, the streamer streaming and go, I don’t know. Have you seen, you have any metrics on like, has there been kind of this like organic growth through word of mouth or from streamers?

I wish that I could know that because that would be incredible information to have. The only thing I know is that people definitely use it on their streams a lot because I get a pretty good stream per listener ratio on the playlist. And so they’re sitting down and streaming for three hours and that playlist is what they’re using.

Speaker 2 (13:39.692)
And then there’s somewhere around like 35,000 shazams. I just don’t know if those come from Twitch or if those come from people shazaming the ads, which happens more than I would have thought. Or just people shazaming like the organic content, but organic content is not a huge part of the current success.

Yeah. Yes, I don’t even know how you would track some like that, but the only way I could honestly think of tracking that would ruin the whole thing because it’d be opting it into content ID. Yep. Because then you would see exactly what videos are using all the music and what streams, but then it would demonetize all those videos and then all those streamers would never use any of your music. I think last time we talked about it, your previous strategy was you had this playlist.

you were running, you added to the playlist, you would see like if any of them kind of bubbled up as like good contenders to promote and then you would dive into it, do a big campaign. So you shifted now to doing a campaign for every song. Is that, I’m guessing that’s been better?

Yes, the reason for the shift is it the labels just generating enough revenue to to warrant that kind of spend. Whereas before I did not have, I did not have the revenue to, to like test out a hundred dollar campaign on every song. Now it does, it does work better. Uh, I typically, once the song has spent a hundred dollars, I decide if I want to keep it going. If I decide to keep it going, I let it run up to $500 and then stop it there.

And so I’m constantly taking these benchmarks of, ad spend and deciding what to do next. The hundred dollar market is the first one. And it’s really hard to say there’s, don’t currently have set in stone rules for when I decide it’s good enough to run. The most important thing is that it’s getting around. Like if it looks like this song can be a 15,000 stream per month song based on a $500 campaign.

Speaker 2 (15:41.038)
That’s the main thing I look for. Because if I can do a $500 investment and then that song spits off $50 or so a month in revenue, I can make the money back in 8 to 12 months. And then in the second year, by the 24-month market will have doubled as long as the streaming volume stays somewhat constant. So that’s the most important thing.

Right. That’s a good point. So you’re looking to see if you can have 50 bucks a month. You’ll your money back in a year if that’s the case. And then you have the record for 10 years. long-term, I mean, obviously it’ll decay over time unless the artist pops off. Then you might, you know, let’s say one of your artists becomes the next dead mouse or something. That’s great. might end up generating millions of streams and generating the label thousands of dollars. what percentage of tracks?

that you released you find turn into ones that become $500 campaigns.

Probably half of them, which is a fairly good rate.

That’s an astounding hit rate. Just, you know, we run agency ads, right? So it’s like, you know, 50 % of campaigns don’t end up amazing. But I’m guessing the criteria here is you’re, being super selective on what you sign.

Speaker 2 (17:05.558)
Yeah

Speaker 2 (17:11.906)
Right. If I, if the agency model is so different from the label model in that way, because with the agency model, someone wants to promote this song. And as long as it’s not like way out of the agency’s ability to do so, the agency will accept because they, want to promote that song. And so that’s just how that works. And with the label, because there’s no financial commitment necessarily from the artist, I get a

really high volume of demos and I can just choose like, listened to probably a hundred or so demos per day, but there’s only four to eight releases a month. So I’m just taking what I like the most out of all of that volume. And if any, if anyone is going to be that selective, they’ll probably find that their results on average are a lot better. and for me, I just have to have results that are, are better or else I can’t grow at all.

Uh, for a lot of artists, the, the purpose of running their ads may be to get shows and, and to sell March or to find fans that they can engage later on down the funnel for mine. It’s like, I, my business model is streaming and that’s by choice. just like that game. And so I have to, I have to treat it differently than a lot of, uh, lot of artists would running ads or agencies.

True, because if an artist is losing, you know, a lot of campaigns won’t profit when you’re running ads for more songs. But if you’re an artist, that doesn’t matter because let’s say it makes back 50 % of the money over a three year period. So you’ve made back half of it there. And then all the campaigns you run, not only have recouped 50%, if that’s what, you can’t play a show if you don’t have any fans. You can’t sell merch if you don’t have fans. You can’t have a Patreon if you don’t have fans.

And you’re not going to get collabs if you don’t have fans. so for some artists I work with, the whole reason they run ads, promoting their streaming is to get shows or get bigger shows or get higher paying shows. And that’s where they actually make the money. So they don’t care. Like streaming, whatever, like we’ll lose whatever here. doesn’t matter if that gets us to the point where we can play these shows. It was worth the investment, but you don’t have that benefit. So you have to make that part.

Speaker 2 (19:33.678)
Exactly. Yep. And a lot of running the ads over the past, definitely the past year, because that’s been the most amount of ad spend I’ve done of my own money. And so far, my label has had a total spend of around $40,000, which is so much more than I thought I’d ever be able to spend on it. And, it’s, it’s been able to get that high because it’s growing alongside of the

the ad spend. I didn’t just like start with 40 K in the bank. was, I was running $180 a month in ads and that’s just stepped up over time. But if anyone is trying to like, if their game is streaming and they want to make the money back in streaming, what I’ve learned so far over the past couple of years is that a pretty decent rate of return to look for. And this, I’m sure the rate gets better. The bigger the label is and the

the more reach they have with, different artists, but it’s been around like 10 % of the lump sum investment in ads comes back per month from the song. like, I spend $500 on the song, I want that song to be making $50 per month on average. And I’d like that to go for about two years because that is, I believe if I’m not doing mental math wrong, doubling the initial investment in a two year period.

And it doesn’t happen. It’s not like I can do that on every song, but because I test out enough songs, the majority of the budget will kind of form around the songs that have the most promise. So there’s a handful of songs in my library that have had thousands of dollars spent on them. There’s one that’s almost up to 4,500. And so that keeps the, like the average rate of return at or around that 10 % mark. So a lot of them still.

don’t do that amazing but because there’s some that really really pull the weight of the rest of the library I can just allocate the ad spend accordingly and try to force that 10 % or better return.

Speaker 1 (21:45.678)
It makes sense. I usually tell people that if they’re going to release 10 songs in a year, that two of them are going to be amazing. Two of them are going to suck and the other six are going to be in some type of bell curve. Now that’s assuming that the music’s great too. Like if the music sucks, it’s going to be worse than that. If they’re super talented for whatever reason, like I know this group that they literally write songs for like Justin Bieber and Walk the Moon and other huge artists for a living. And so like for them, their hit rate is much better.

But for most artists that are still great, it’s like you get 10 to 20 % of your songs, crush it. 60 % do good, fine, all right. And then 20 % just completely just don’t.

Just eat it. And it’s great. I have not learned how to better predict that at all. I, one may assume that I can listen to a song and maybe have an idea of how it’s going to do. I am wrong so often. And some of my least, not, I won’t say least favorite releases, some of the releases I’ve done through my label that I just thought were okay. And I was on the edge. like just barely decided to release it.

have done so extremely well and some of my favorite releases have flopped so hard and I from that I just I try not to be attached it to my label songs but it’s helped me for when I release a song of my own I can be so much more relaxed about releasing it because I just know this form of marketing doesn’t work on every song doesn’t mean the song is good doesn’t mean people are gonna aren’t going to love it and so I try not to be attached and

And that’s been a really helpful lesson for me to learn. And I just try to pick songs that I like, I personally like, and that makes my job a lot easier.

Speaker 1 (23:43.758)
Same. I haven’t been able to predict it. What I have found I’ve gotten good at over just like, I don’t know, thousands of campaigns I’ve worked on or whatever, is guessing out of a set of videos which couple of videos are gonna do the best. That I know I’ve gotten better at over the last thousand campaigns. just, I don’t know, in the last few months the amount of times I’ve run a campaign and…

The ad, the client ends up being like, that’s the ad you said was going to do best. That’s the winner. Yep. I still don’t get it right all the time, but that I’m getting better at the song thing though, complete crap. Yes. It’s, and it’s, it’s infuriating because sometimes you, get, you know, the, best song you’ve heard in years and it fails. And then you get a song that you were borderline going to reject and it does great.

And it’s, it’s kind of a soul sucking to a degree, uh, because it is kind of like, you know, now they’re not horrible songs. It’s just, they’re not masterpieces. I’ve used this example recently, you know, teach me how to ducky. No one’s going to argue that that’s a good song. And I mean, one, one person said in the comments, the beat was fire, which has the beat was fire. had a dance, but it was a marketable song. was a catchy marketable song. It was not a objectively good.

well-written song like soldier boy to the same thing and no one’s gonna say that’s a masterpiece that song those songs probably outperformed like so many songs that won like awards for being amazing songs and that people love and consider the best songs ever just because they were catchy stupid things that made people laugh and have fun

I try to catch myself whenever I’m like saying

Speaker 2 (25:30.094)
was bad because the song isn’t good. I’m trying to be more specific and say performance wasn’t good because people through this medium aren’t connecting with the song right away. Because it’s like, is crazy because there are songs that are just painstakingly written and composed and they just don’t do well, but they could get all of the accolades and the appreciation from critics and it’s really rough for that reason.

So a lot of people that have labels, that I know at least, end up going with places that take a percentage of royalties. So they’ll go with Symphonic as a partner, or they’ll go with Vidya, or they’ll go with the Orchard or the AWOL, or there’s a list of distributors that take commissions. The trade-off of that usually is between 10 and 20 % what the distributor will take, but the trade-offs you usually get

dedicated support. I’m like, I have some artists that I distribute through the orchard and the support there is pretty great. Like hopping on zoom calls is not crazy to do. Like within a week or two, hop in a zoom call with some of the company. That’s kind of normal at the orchard. Um, and Vidya, can, you can, those people, can call an email. You have a dedicated account rep and a few others as well, but they take that cut, but they can pitch your songs and editorials. So there’s, there’s like all this push and pull. I don’t know if there’s a route note.

take a cut and two, they offer any like, I’m guessing no, because you said you kind of think they’re not that great.

They, they take a cut if you are on a free tier so that you can release music there for free and they take 15%. Uh, but I, I was not willing to do a distribution company that took a percent. I did talk with a couple, um, like a couple larger ones and they, none of them were able to give me any sort of data that said, yes, we take the 30 or the 20%. But.

Speaker 2 (27:35.112)
You make more overall because you’re with us. It was always like, yeah, we take the 20%, but we pitched the music and that it was very unconvincing to me. And I didn’t think that they would be able to provide enough to warrant that amount. Because if I were giving a up 20%, that would be an extremely high yearly payment. If I was looking at it from, that end and until one can tell me that they do in fact.

help you make more than the amount they take. Yeah. I’m, I’m going to sit out and just use, use this one. Maybe one day have my own. That’d be nice. Cause then I could do the support on it or someone on my team. If I had a team later.

Yeah, that’s, that’s why I am not on any of those paid ones for my own music. Cause I find the percentage thing kind of, you know, it works. makes sense for some artists, but usually you have to have a certain amount of momentum before it ends up actually being worth it. Cause it’s like, they, see the dollar signs and they’re like, let’s go fight for this artist’s behalf. Because if we like, they’re already making us, you know, if we’re taking 15 % and they’re making a hundred thousand dollars a year, we’re making $15,000 a year.

So that’s enough for them to justify like every release they send us, we’ll go pitch it to maybe not even just Spotify, but Spotify playlist, Apple playlist, Amazon playlist, et cetera. And I see people would get really good results for that. problem is there’s no guarantee and they’ll never put anything into writing. I know people who have had bad experiences with some labels that not labels, distributors that I’ve offered that, you know, like, Oh, we’re going to do this for you. We’ll take a cut, but we’re going to pitch the editorial. And then like they sign with the distributor.

customer support just vanishes, they never get any replies, and now they’re contractually obligated to keep it with them for a year, and then it ends up being a dumpster fire.

Speaker 2 (29:26.028)
Yeah, that sounds… There was one who offered, was, I think it was no split, no royalty split, but they still required that you sign one of those like, keep it for a year thing, and I also didn’t love that. They also use AudioSalad as their backend, so even though they weren’t taking a cut of royalties, I know AudioSalad did.

And I just don’t want to have to sign up for anything that would keep me there for a year, especially if the purpose of signing up was just to test. And I’m done. I’m so tired of moving the catalog around. I’m sticking with this one until I have someone else on my team who can, if we need to change distributors, they can do it. I’m not going to do it again.

migrating 350 songs is no joke. that’s that like weeks of work, honestly, probably not full time. Well, could be on it. You could probably do someone full time for a week to move migrate 350. It would be that brutal. Um, I know someone who owns a label that does some really good streaming volume, like 10 million streams a month. And, uh, the he’s trying to migrate to a distributor and not only are they offering them better rates and like

cash advantages, cash advances and stuff. But they’re offering to migrate the catalog for him. There can be an option at some point. actually know even not at his level, because his level is a four million month of listeners or something. there’s a lot of money there for the distributor. And a lot of them have tools where they can mass export and import ISRCs and stuff. And you give them just your digital file with all the music and then they handle everything.

Yeah, that does sound nice.

Speaker 2 (31:08.718)
That’s super.

I know someone who did that with like 50,000 monthly listeners. Like, I think it was actually Toulost had some like tool to help them migrate as a whole, like 100 song catalog.

It’s compelling.

Sweet, well, you wanna apply inspiration music, is, there’s the kitty. There’s a link down below if you wanna submit a demo. There’s a link to Alex’s booking calendar if you wanna check it out, and a link to your video on how to promote music, or it’s a playlist rather, because you have a channel, and that’ll be linked down below, and maybe another social. What’s your best social media site?

If people are looking to see how I run campaigns and like the marketing stuff, they should check YouTube long form videos. That’s the one to check out. If they want to listen to the music, I’d say Instagram is the best one to check out.

Speaker 1 (32:00.59)
Thanks for

Absolutely. It’s a pleasure as always.