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UK brand spend on music ‘remains high’

UK brand spend on music ‘remains high’

Brand spend on music has remained relatively stable despite the recession, claim new findings from music marketing agency, Frukt.

Research carried out on behalf of UK royalty collection society, PRS for Music, found that in 2007 and 2008, spend decreased by just 0.62% in 12 months to £88.9 million.

The findings also reveal the most significant increase in UK brands' music spend was on digital marketing channels (online and mobile); in 2008 brands invested £4.5 million in this space, up 17.9% from 2007.

This was driven by an increase in the use of digital platforms, most notably social networking partnerships, which help give brands a prolonged exposure and deeper consumer interaction.

Investment in TV has also increased by 6.97%. This is due to the growth of ad-funded programming, where brands co-fund production in return for greater brand integration and extended usage rights.

Examples include Nokia Green Room and Orange Unsigned Act, which have the added advantage of enabling brands to support new talent.

However it is predicted that some of this activity will start to move online over the next 24 months. Large brands also take advantage of the high audience reach associated with established formats, like Carphone Warehouse and X Factor.

Although investment in the core sector of live music platforms still made up over 25% of total spend in 2008, there was a fall in spend between 2007 and 2008 (-9.6%) mainly caused by lower income from festival-based sponsorship and a move from some brands towards custom-created events.

Advertising remains a key channel, with brand investment of over £24 million in 2008, and is often used to support activity in other areas in order to amplify audience awareness.

Other channels have seen a small increase: event creation (up 5%) with activity such as Jack Daniels' The JD Set and artist endorsement (up 5%) with activity such as Joss Stone with Flake.

"Brand investment in music is more innovative than ever before, with more consumer brands understanding that a long term view and clear definition of a role within music is critical to their acceptance and success,” said Frukt founder, Jack Horner.

“As brands move from the old approach of badging and towards developing content, music offers the opportunity to create truly engaging platforms. These investments in music are becoming a valuable revenue stream for the music industry, hence the openness with which all parties now approach collaborations and the increase in deals."

Will Page from PRS for Music, added that the report helped explain why the British music industry 'pie' had grown to £3.6 billion in 2008.

“More strikingly, business-to-business (B2B) revenues, such as direct and collective licensing as well as advertising and sponsorship, now make up a quarter of the overall pie,” he said.

“These B2B revenues are at best misunderstood or at worst overlooked.  This impressive contribution from Frukt sheds light upon the various channels into which brands are looking to invest in the music industry eco-system.

Page concluded, “Hopefully, through greater awareness and collaboration, we will see much more of this activity going forward."

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