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Licensing of Popular Music in Advertising

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There are two distinct sets of copyrights in music: the rights to the musical composition (the written lyrics and the accompanying music), and the rights to the sound recording of the musical composition. The sound recording is usually owned by a single record company and compositions often have complex ownership groups. Any reproduction of a musical composition or a sound recording requires the consent of the owner of that particular copyright.

Common Music Licensing Terms

Synchronization License: Rights to synchronize the musical composition in timed relation with audio-visual images such as a commercial. Music publishers issue these licenses either as the copyright owner or their agent.

Master Recording: Rights to use a specific recording called a Master. Covers the owner of the Sound Recording (typically the record label, or whoever paid for the recording such as the producer or the artist).

Most Favored Nations: A promise by the licensee to treat a licensor equal to any other licensor on a particular project. This would mean that the Sync and Master licensor would receive the same fee.

Linear Use: Using a song “as is” without any manipulation (i.e. moving around verses, cutting the horn section, etc.) may need special permission for non-linear use.

Exclusivity: The rights granted to the licensee will almost always be in the form of a non-exclusive license; the advertiser will pay more for an exclusive time period or industry.

There are many factors that can contribute to the fees you pay for licensed music. Consider these 10 important questions that will contribute to what you pay:

  1. Do you want to use the composition AND the master recording? Or, do you want to use only the composition and do a re-record?
  2. Do you want to re-record the composition with a parody lyric?
  3. For television, how many spots are you producing and what are the timings of each spot? (include versions, edits, lifts, tags)
  4. What is the media buy? (network, cable, spot syndication)
  5. Are you doing any radio spots? If so, how many?  Lifts, versions, edits?
  6. What other kinds of uses will there be? Do you need rights for non-broadcast/industrial use, sales meetings, trade shows, internet, in-store, POP, use of song title/lyrics in print or use of talent name/image in print, phone systems, in-cinema, in-flight, in-stadium/jumbotron, theme parks? Now is the time to include as much as you think you’ll need.
  7. Term – How long will the campaign run and what is the first air date?
  8. Territory – What cities, states, and countries will the campaign be airing?
  9. Exclusivity – Do you need exclusivity and if so, for what product category?
  10. Option – Do you need an option to renew the use for an additional consecutive term?

In order to procure the most competitive music licensing fees, MRA recommends the use of a third party vendor who specializes in negotiating popular music. Why? These companies have professional relationships with all major publisher and record label licensing departments and have the expertise to secure the best rates for advertisers.

Wondering how to get in touch with a music licensing specialist? Submit a request, and we’ll be glad to introduce you to the best resources in the industry — based on your specific needs.

 

 

Anita SilvermanLicensing of Popular Music in Advertising
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4 Pros And Cons Of Shooting Off-Shore

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Selecting the “best” location for your production is an important decision that should be made with care. Several factors come in to play:

  • LA and NY are relatively high-priced but have a high concentration of directors, photographers and talent available
  • There are a multitude of cities around the world that can offer lower costs
  • Many advertisers travel U.S. based directors and talent to lower cost locations

MRA has created a quick reference guide categorizing popular international locations into high, medium high, medium low and low-cost ranges — click here to download your copy.

While there can be significant cost savings with an off-shore shoot, here are 4 important pros and cons to consider:

Pros:

  • Lower production costs
  • Broader selection of directors geographies, etc.
  • Ability to tap non-union talent and negotiate talent buyouts
  • Reduced overtime (film crews tend to work longer standard days before incurring overtime)

Cons:

  • Increased travel expenses
  • Possibility of paying for travel time (directors, producers and agency supervision may charge for travel time outside the U.S.; in some instances these can be negotiated)
  • Longer lead time to organize and plan the shoot
  • Smaller foreign talent pool if an American “accent” is required

Other Considerations:

  • If the product is not sold in the country of the shoot, customs could delay product delivery
  • When shooting outdoors, be cognizant of the background (i.e., are cars driving on the correct side of the street? Are there signs close-by in a foreign language?)
  • Many countries have very specific regulations specific to producing content – ask an expert to ensure you’re aware of all local laws that may impact your shoot
  • Consideration should be given to safety and fluctuating currencies

MRA has more than 37 years of experience in consulting with clients on making the best decisions when it comes to production locations, and we’d be happy to help you as well. Contact us today to learn more.

Written in collaboration with Angela Saferite.

 

Anita Silverman4 Pros And Cons Of Shooting Off-Shore
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Save Big Money By Asking the Right Questions

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Cyber Monday Case Study

According to CNBC, Cyber Monday 2017 is expected to produce more than $6 Billion in sales, and RetailMeNot reports that 95% of employed consumers plan to surf for deals while at work. Having the right strategy to capture the attention of consumers on Cyber Monday is critical for advertisers; yet, you may be paying a premium to reach your target consumers this year.

I recently had the pleasure of interviewing Angela Saferite of Saferite Consulting, and in this 10-minute conversation, she highlights a recent consulting engagement where she helped her client optimize their Cyber Monday digital campaign — and generate $175,000 in savings by asking one key question.

Anita SilvermanSave Big Money By Asking the Right Questions
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Best Practice Timelines for Live Action Production

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You Have Good Intentions

You planned sufficient time for creating your online video. Unfortunately, you ran behind on approving the final concept, and the production calendar was squeezed. It was never your intent to get behind schedule. It just happened…

So This Happened…

  • The preferred directors were all booked, so you were stuck with who was available.
  • Your agency said, “Because we’re in a hurry, we don’t have time to triple-bid this job,” and you lost all the advantages of competitive bidding (which can save 10%-20% of the production company’s costs).
  • You needed to find the right talent with very little time, so you held casting in 3 different cities, which built in a waste factor of 66% for casting expenditures.
  • You needed color-corrected packages and paid a premium of 50%-100% because of the rushed schedule.
  • Extra props and wardrobe were bought. (“I don’t know which she’ll like better, the yellow or the blue. Get ’em both.”)
  • Extra setups were shot, and scenes were overproduced. You heard people on-set say, “We’ll fix it in post-production.”
  • Post-production and retouching costs escalated by 50% due to “fixes” that were needed.

Why waste up to 25% of your budget on rushed production when those same dollars can be used for additional assets or media? Follow these best practice timelines to ensure success.

90% of Rush Production Can Be Avoided

Carefully review your advertising plans. Producing a spot for TV?

  • Starting point. Keep in the 8 weeks as a baseline (include additional weeks for global campaigns and/or special effects).
  • Extra time. Include extra weeks for creative development, copy testing & research analysis, management approvals, and legal review.
  • Create deadlines. Then, keep the pressure on agency partners and suppliers — and your internal teams — to stick to them.

Brands all over the world struggle with the costly ramifications of rushing production. With MRA, you don’t have to be one of them.

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How Does Integrated Marketing Communications Intersect With Production?

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What is Integrated Marketing Communications?

The definition of Integrated Marketing Communications (IMC), according to the American Marketing Association is the “Planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time.” This includes but is not limited to:

  • Advertising
  • Social media
  • Sales promotions
  • Public relations
  • Direct marketing
  • Point of purchase
  • Sponsorships

The game changed with regard to IMC when the internet came in to play in two big ways. First, instead of marketing campaigns being a “push” strategy, it became more “pull” with consumers searching information and becoming “push and pull” interactive. Second, with traditional media the same information is received by all consumers, and with internet media content can be tailored for specific groups or individuals.

IMC not only focuses on consistent messaging for the customer but also provides an efficient and cost effective way for advertisers to communicate. The idea is to harness the power of each channel to have a more effective impact than working each channel individually. The message remains consistent, but the delivery method varies across the platforms.

This ties nicely into advertising production strategic planning. A well defined content production strategy with optimized work flows is a powerful tool to work an IMC process and manage a budget efficiently.

Additional Types of Integration to Consider

  • Horizontal – across the marketing mix and business functions – production, finance, distribution and communications working together
  • Data – sharing relevant marketing data across different departments within a company and with agencies
  • Vertical – ensuring marketing and communications support the higher level business and company objectives and mission
  • Internal – keeping all staff informed and educated regarding brand and company identities, standards, partners, etc.
  • External – coordinating with all external partners (advertising, PR, media, and digital agencies) to work together in a cohesive manner with messaging and campaigns

IMC: Where do you stack up?

One of the biggest pitfalls of integrating marketing communications (especially for large advertisers) is to be able to effectively and efficiently work across multiple departments that are each producing their own marketing communications. According to Smart Insights, only 6% of companies report that their marketing integration processes are fully optimized while 32% report that integration is a key area of focus for their organization. Regardless where you fall on the spectrum, there are several ways to drive efficiency with IMC including reducing agency fees, streamlining work flows, and leveraging consistent assets across all channels.

Have questions on how to build a production strategy to fit within IMC? Contact us to learn more.

 

Written in collaboration with Angela Saferite.

Anita SilvermanHow Does Integrated Marketing Communications Intersect With Production?
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3 Budgeting Pitfalls to Avoid

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This month, we’ve spent time discussing budget planning, successful budget management, and how to find more money within your budget. Now, let’s take a moment to review some key tips to help you avoid common budgeting pitfalls.

 Annual Budgets

Common Pitfall: Instead of starting with project or campaign level budgeting, pull out and think big picture. Are there certain ground rules or strategies to align all the teams on before jumping in to the detail build?

Helpful Tip: When reviewing the annual budget, do a detail review for any spending not tied to a specific plan or campaign, often this can identify spend that can be trimmed without impacting brand objectives and KPI’s.

Production Budgets

Common Pitfall: Instead of asking your agency what the production budget should be, consider using models to build your own budgets and set guidelines. The budgets and models can be further refined as the detail planning and creative idea is finalized.

Helpful Tip: When building out models for production budgets, it may be helpful to have a ranges of standard costs for components. For example, animation costs will vary widely depending on the complexity of what is required. A :30 spot with heavy CGI will have a very different budget than one with very little. Music costs will vary depending on whether you’re using stock, original, or licensed music. No two :30 spots are exactly the same, and buying production is not like buying widgets. Setting an appropriate budget is a critical first step to managing costs.

Need a production budgeting tool for your organization or benchmarks for different components of production? Contact us — we’ve had the pleasure of helping hundreds of brands with budgeting, and we’d be glad to help you, too.

Ongoing Management

Common Pitfall: Failure to obtain written approval for scope changes, overages, or changes in direction during the project can lead to agency disputes and financial management issues down the road. Standardizing and formalizing this process relieve this pressure on projects, teams and relationships.

Helpful Tip: Use a standard form for routing and documenting change requests and approvals. Also consider using a management report to show project budget, revisions, and final spend. Having a dedicated resource (internal or external) who actively manages the budget during all stages may seem like an additional step, resource or cost, but this pays for itself quickly (usually multiple times over).

Need a fresh perspective on a budget issue/opportunity? Click here to submit questions to our team, and one of our experts will get back to you right away.

Written in collaboration with Angela Saferite.

 

Anita Silverman3 Budgeting Pitfalls to Avoid
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Budget Planning: Fall Into More Money

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With today’s consumers digesting content at a rate like never before, organizations are struggling to keep up. Marketers are challenged to create more content, more often — yet have stagnant (or decreasing) budgets. So, how do you overcome the challenge of doing more with less? During this “budgeting season” we wanted to share a few ways you can approach “finding” more money in your budget. Check out three real-life examples:

Refine Your Content Production Strategy

This can help drive creative synergies, increase speed to market, and lead to significant cost efficiencies — especially for advertisers looking to globalize advertising development and production. So, where do you begin?

  • Tap an internal or external production expert to analyze current processes, creative outputs, staffing, technology tools, content needs, and spending across brands and geographies to identify opportunities, barriers, and challenges.
  • Develop an annual planning protocol — and stick to it
  • Determine the optimal production approach(es) based on your content needs for the next year
  • Analyze historical benchmarks and develop a methodology for tracking success

MRA was tapped to lead this process for a global advertiser. The results? 44% savings in production costs versus historical benchmarks for comparable scopes. Click here to request the full case study.

Establish Targeted Production Investment Levels

Whether you’re investing broadcast and digital video, creating target investment levels based on deliverable type and complexity can have a significant and positive impact for your organization.

Start by building standard cost ranges (based on historical benchmarks) for the various components of production. A few examples of these “components” include:

  • Video style (presenter, single storyline, testimonial, vignette, etc.)
  • Testing (boardomatic, 2D animatic, 3D cinematic, etc.)
  • Number of locations
  • Number of shoot days
  • Music (licensed, stock, custom, etc.)

 Once all components have been considered, develop categorizations based complexity and deliverable type to be used as “building blocks” for budgeting.

Next, create a budgeting tool which factors in additional elements which may increase/decrease the investment level. A few examples of these additional elements include:

  • Heavy CGI or special effects
  • Multiple casts
  • Shooting in a low-cost location
  • Repurposing existing assets

By right-sizing your budgets based on historical benchmarks, deliverable type, and complexity you have the opportunity to drive efficiencies all year long. In fact, one of our clients tapped us for help and captured $1.5M in efficiencies within the first year alone!

Create a Strategy for Scaling Social Media

These days, marketers are struggling with the need to produce more and more content for social channels — with flat budgets. Many organizations are finding themselves with unsustainable year-over-year expenditures in social media and are looking for new approaches to be able to scale their program. If you find yourself in this situation, here’s something to consider:

  • Leverage an internal or external expert to evaluate optimal content for driving the best interaction across channels
    • Look at social media posts over the last 12 months and analyze interaction rates
    • Identify trends in interaction rates by content types and posting cadence

MRA was recently tapped by a global advertiser who needed help in scaling their social media program. By partnering with our client’s marketing team and agency, MRA was able to analyze engagement trends and identify multiple opportunities to stretch budgets and drive efficiency. The results? Our client stretched their social content production budget by more than 35%. Click here to request the full case study.

In Summary

As you can see, falling into more money comes in all shapes and sizes. Understand the strategies currently accepted by your company and what strategies might improve your approach based on the culture and tolerance for change.

Check out our upcoming article as we’ll provide steps on enhancing your 2018 budgeting processes.

Written in collaboration with Angela Saferite.

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Production Transparency: Tips & Tricks

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“Change before you have to.” — Jack Welch

Here are 4 key tips to consider as you implement change to bring about greater transparency with your agency partners:

Tip 1: Create Policies, Procedures, & Guidelines

Many people may believe that production policies are developed to simply prevent issues. However, they offer a true benefit by outlining transparent production practices, creating efficiencies in the production process, and including safeguards to mitigate financial risk. Remember, it’s best when your production policies and guidelines:

  • Include the “do’s and don’ts” as well as clearly-defined business procedures
  • Address approval processes, responsibilities, and limits
  • Have training, training, training – BOTH internal advertiser employees and agency employees should be trained annually and/or during on-boarding
  • Are proactively utilized to review/audit for compliance
  • Are updated regularly to ensure the latest industry best practices (including the ANA Production Transparency findings) are addressed

Tip 2: Assign Responsibility

It might seem straightforward and intuitive, but many companies focus on tips 1, 3, and 4 but miss this critical element. Having production policies means nothing unless someone is responsible and actively assuring compliance. Also, it’s important to make sure the person(s) you designate has the right tools and resources to be successful; getting the right expertise or training is crucial and should be considered up-front.

Tip 3: Consider Up-Front Analysis

Analyzing costs and overages after-the-fact (or when the purchase order runs out of funds) is simply just the process of approving incremental spend. The most critical decisions which can have a significant impact on transparency (and costs) are made early-on. Having a seat at the table with standard processes, tools, and templates helps ensure transparent discussions between your brand teams and agencies — and can help you avoid any unnecessary spending. With a proactive approach to up-front analysis, you’ll also be better equipped to manage scope changes (while still staying on budget) — or, heck, you may end up with funds that you can reinvest back into your brand.

Tip 4: Review Invoices Prior to Payment

Prior is the key word here. After payment is made, issues are often discovered:

  • During an audit
  • When invoices come in and there are no more funds available on the purchase order
  • When invoices come in and the project is closed

This wastes precious time and money to resolve — and may lead to issues with the agency.  Moving this review and “audit” process up before payment is made is the key to success.

In Summary

There’s never been a better time to take an active role in managing and governing production transparency in your organization. Check out additional articles on the topic:

Need advice? Click here to submit questions directly to our team, and one of our experts will get back to you with an answer immediately.

Written in collaboration with Angela Saferite.

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Production Transparency: 4 Steps to Getting Started

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With the recent release of the ANA Production Transparency, now is the perfect time to review and refresh your practices.

Step One

Identify someone or a team who is responsible for managing production. This can be accomplished in three ways:

  1. Tap into in-house resources with deep production knowledge (these team members may reside in marketing operations, procurement or finance)
  2. Train and develop internal team members to manage the production process and expenses
  3. Hire production experts to supplement your internal team

Assigning this responsibility is a critical first step to success!

Step Two

Implement solid policies, procedures and guidelines governing production spend. These usually start with your company policies and procedures that need to be adhered to. However, this alone is not enough; more specific production guidelines require clarification and communication. Production guidelines are best when in writing, updated often, and both employees and agency personnel receive training. (The training is best delivered by the individuals responsible for the management of production costs.)

Step Three

Avoid surprises and issues with your agencies up front in the process by conducting a thorough pre-bid meeting, including leveraging an objective party to ensure 100% alignment among agency personnel and brand teams on all elements of the production, including (but not limited to):

  • Recommended bidders
  • Shoot location options
  • Types and number of assets to be included in production
  • Talent requirements, residuals, and buyout considerations
  • State incentives
  • Music
  • Special effects
  • Budget

Input and clarity around these topics early in the process facilitates transparency, effective management of budgets, and — yes, even results in savings.

Step Four

Have a smooth invoicing process which includes a detailed review of invoices before payment is made. This also is helpful in eliminating the painful process of recouping funds if there are discrepancies or disputes with the billing.

Experts that specialize in reviewing production invoices and back-up documentation, monitoring compliance, ensuring verification of all costs can provide a thorough analysis. (Up-to-date, best-practice guidelines are a key element to have in-place prior to implementing the invoice review process.)

Summary

Regardless if these 4 steps are supported by internal or external resources, there’s never been a better time to take a look in the mirror and identify areas for improvement. Find yourself wondering how you’re stacking up to other organizations, or need help identifying areas that you might be at risk? Call 513-354-3833 to schedule a free transparency assessment.

Join us next week as we provide tips and tricks for implementing change to production management practices in your operations.

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How Production Transparency Can Impact Your Budget

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Building from last week’s “Cliffs Notes” on production transparency, this week we take a look at case studies and examples of how this very topic can directly impact your budget.

Whether it’s internal or external, having a resource for production expertise can lead to real savings for advertisers.

Below are a few real-world examples of how a lack of transparency can lead to increased costs:

Templates:

Here in the United States, bids for TVC/video production shooting and post production are often on the Association of Independent Commercial Producers (AICP) and Association of Independent Creative Editors (AICE) forms. However, the scope of work for digital, photography and experiential projects are often in different formats with varying levels of detail and specifications. This makes it extremely difficult to compare across bids submitted. A best practice is for the advertiser to utilize a standardized template with all the required specs and appropriate level of detail (similar to what is in practice for TV and video). This allows for a smooth pre-bid meeting and the ability to make smart business decisions regarding costs.

Related Party Transactions with Bidding:

The ANA Production Transparency Study noted cases where related party transactions were not disclosed leading to various competitive bidding issues. In a recent project, a freelance producer who also owned a production company wanted that company to submit a bid for the project. In this instance, since an external production consultant was involved, the relationship was disclosed and bids from all production companies were received and evaluated by a 3rd party resource. Can you imagine what would’ve happened if the production consultant hadn’t required proper disclosures before bidding began?

Bid Review

During a recent bid review, a line listed “equipment” with an associated dollar figure. When asked for clarification, the specific items (grip, lighting, back drop, gels, etc.) with prices were provided and the total “equipment” amount came down several thousand dollars.

Overage Approvals

A brand director on a commercial shoot was asked by the agency to approve an overage on set due to some overtime requirements. The brand director “signed off” not really paying attention to the amount, authorizing the over time required in the amount of $60,000. When the production consultant analyzed the charges the next day and looked at the detail requirements for the two hours, the overage amount should have been $16,000. Having someone with production knowledge understanding the details and digging in really paid off in this situation!

Invoice Review

Why use your precious budget on things you shouldn’t be paying for? In today’s world of high turnover, short-staffed teams, and people who are stretched so thin, there’s a higher risk for error — which can impact your bottom line. Invoicing transparency issues aren’t necessarily intentional or malicious, but it’s critically important review all billing prior to payment to ensure you don’t fall victim to common issues, which include:

  • Number of individuals above guideline limits traveling to the shoot
  • Inappropriate class of airfare, upgrades, airline clubs, monthly fees, subscriptions, etc.
  • Miscellaneous non-billable expenses (items you can’t imagine!)
  • Non-transparent talent charges related to miscellaneous payments, member violations, fees, wardrobe, overtime, etc.
  • Charges to incorrect brands or projects (and yes, even incorrect clients)
  • Duplicate charges
  • Past due balances on invoices
  • Taxes charged on non-taxable items

NOTE: MRA has an entire team of people who review agency invoices and back-up documentation to ensure billing is 100% accurate. To learn more, click here to download an overview of our LineWatch® Invoice Monitoring process.

Purchase Order & Budget Management

When advertisers don’t have solid pre-bid and bid review processes in place, project estimates become inaccurate and one risk is having the purchase order open for a larger amount than needed. If the advertiser doesn’t have an individual or team closely managing open purchase orders and budgets (vs. actual expenses), significant amounts may be left on open purchase orders and when final billing is settled, there isn’t always enough time to utilize the available funds. Imagine if YOU were the client that found out too late an entire additional spot could have been produced for your campaign!

Join us next week as we provide steps for how to get started and make improvements to your production management practices.

Written in collaboration with Angela Saferite.

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