Be careful using the word “payola” around Nathan Hanks. Even though the founder and CEO of Music Audience Exchange feels like the word explains what his company offers, he knows the practice of record labels and managers greasing DJs’ palms to get certain songs onto the radio still carries a tremendous charge and taboo.
“It is payola in its best form,” Hanks said of the service his company provides. “It’s just, payola has become this toxic word.”
As practiced in the 1950s, payola was synonymous with the worst kinds of music industry iniquity. A congressional inquiry cost people their jobs and nearly destroyed the careers of industry luminaries like Dick Clark and Alan Freed. But the "payola" Hanks is referring to — playing big chunks of artists’ songs during commercial breaks on terrestrial and streaming radio broadcasts — actually offers the reverse, a chance for rising artists to get a level of exposure that would normally be beyond their grasp.
“For an artist that doesn’t have a big record contract, this is perfect,” said David Allan, a former radio executive and program director and current professor of music marketing at St. Joseph’s University. “They’re where they want to be, getting the exposure they want.”
At the most basic level, Music Audience Exchange, which shortens its name to MAX, gets brands together with bands to make advertising. The specific types of advertising vary — MAX campaigns include everything from terrestrial radio spots to social media campaigns to live concerts — but the most potentially controversial are its radio advertisements. The 60-second spots get the hook and chorus of a band’s song onto radio airwaves, right after the band thanks a brand partner for the opportunity.
MAX has been around for a only couple of years, but brands have been buying what it’s selling. Ford, Jack Daniel’s, Coors Light and AutoZone have all used MAX on assorted local advertising initiatives, and Hanks is bullish on his company’s prospects for doing more. The company did 50 deals last year, and it has set a goal to do more than 300 in 2016.
“I do think we’re in a space where everybody can be our friend,” Hanks said.
At its most basic, this is not a new idea. Record labels, back when they actually had marketing budgets, would buy airtime on radio and MTV and put on bits of their new bands’ upcoming singles or videos all the time, and brands have hired bands and musicians as pitchmen for decades.
But over the past two decades, two things have happened that have changed the way musicians and marketers think about working together. The marketing budgets at record labels have essentially collapsed, especially outside the major label universe, leaving artists and their managers with few options to get their music onto big promotional platforms. At the same time, advertisers are ramping up their investment in content and experiential marketing, often without a clear idea of how to run those programs locally.
“You can see that that world was moving toward content, experiential marketing,” Hanks said. “People are writing about that ad nauseam. But there’s a real scale problem.”
In a perfect world, MAX solves both problems simultaneously. The company built a database of 2.4 million artists that allows marketers to sort them by a number of different attributes. If one wants to find a pop-country band based in Los Angeles that’s popular with mothers aged 25-34, it’s just a few clicks away. If you need a bachata singer from San Antonio who has more than 10,000 Instagram fans, he’s available too. That database, which artists can voluntarily add themselves to, allows brands to find local talent for efforts that are meant to reach across the country.
Once it’s found the right group for the right brand, MAX runs campaigns across a number of different platforms, including terrestrial radio, streaming services like Spotify, Pandora and YouTube, and social platforms including Facebook, Twitter and Instagram. Both artist and brand get detailed reports on how it goes: When listeners click on a radio spot when it’s playing on Spotify or Pandora, reverse look-ups give them precise data about who’s engaging. If fans opt in to certain promotional activations after shows by giving bands their phone numbers or email addresses, the brand gets them too.
The brands appreciate that precision, and the bands see results too. Hanks said two of every three bands contacted by his company about a possible project say yes, and most see benefits that go far beyond a quick paycheck. We the Ghost, a rock band from Tulsa, Oklahoma, saw its single “Let Me Know” debut at No. 4 on the Billboard singles chart back in June after a Dr Pepper campaign MAX brokered; La Reunion Norteña’s album “Reuniendo Corazones” hit No. 1 on iTunes’ regional Mexican album charts, then stayed in the top 25 for more than a month; Todd O’Neill, a singer-songwriter, signed an artist development deal after a company noticed a MAX program O’Neill did with Forty Creek Whisky.
“I would definitely work with them again,” said Robbie Rivera, an electronic dance music producer and DJ from Miami who did a MAX campaign for Jack Daniel’s. “I think the campaign was very successful.”
MAX gets those results because it offers small bands the kind of marketing muscle that’s completely impossible to build on their own. In the right scenario, a band that signs on the dotted line can get its best song onto the radio in markets they’re trying to break into, into the ears of Pandora and Spotify users who listen to the same kinds of music they make, a generous injection of money they can use to promote themselves on Facebook and other social networks, and a handy payday on top of everything else. The brand gets to associate with a face and name that’s much more compelling than the names and faces they’re typically stuck with when doing local advertising.
“I tell all my bands to be very leery about companies offering to promote them, because there is usually a catch,” said Buck Judkins, the founder of SoundCheck International and We the Ghost’s manager. “Their services are a much need[ed] thing in this industry. It seems to be good for the brands, and it is definitely good for the bands. It’s sort of a win-win.”
It’s worth pointing out that the radio exposure comes with a small asterisk. Because the songs in MAX campaigns are played during commercial breaks rather than traditional music blocs, they don’t count toward the radio charts kept by industry leaders Mediabase and Nielsen. But to plenty of artists, that distinction doesn’t matter. Simply hearing their music on the same radio station, associated with a national advertiser, is good enough. “They want the credibility,” Hanks said.
Unlike some music-focused advertising projects, MAX isn’t in a rush to work with bigger artists. While they’ve worked with some fairly prominent indie acts, including OK Go, Jamestown Revival and Bobby Pulido, Hanks sees his company having the biggest impact for bands that are smaller.
“If Katy Perry is a 10, we’re working with the 6 through 9,” Hanks said.
There are plenty of acts that fall into that category. And while Hanks and his team still have work to do, some in the industry feel they may have cracked the code.
“I wish I’d started that company,” Allan at St. Joseph’s said. “They are in a pretty good sweet spot.”