You may know (all too well..) that being a music creator in 2023 takes a lot more than just songwriting and production. You have to be a content creator, marketer, and basically, be a mini record label in order to be successful. One often-overlooked role to add to the list, is a financial planner. It's essential to have a solid financial plan in place to help promote your songs, albums, and personal brand. Are you ready to learn some best practices in financial planning your song’s promo budgets? 

The Concept of Promotional Budget Allocation

What is budget allocation? Simply put, it’s setting a target  amount of money you want to spend on promoting your music in a specific amount of time.
Budget allocation in music promotion should be a dynamic process, tailored to your career stage. For emerging artists, the focus should be on weekly and daily spending – a strategy that allows for agility and immediate audience engagement. More established artists, on the other hand, benefit from a heavier allocation towards monthly budgets, supporting long-term campaigns and consistent market presence.

Monthly and Project Budgeting: The Long Game

Monthly budgeting is the backbone of sustained promotional efforts. This is where you plan for larger campaigns such as album releases, tour promotions, or extensive digital marketing strategie. In the recording industry, labels use project-based budgeting to spend a large budget over an extended period to reach a specific goal. For example in a study published by the IFPI, it was highlighted that it can cost between US$500,000 and US$2,000,000 to break an artist in a major recorded music market. These costs were broken down into the following categories: 

• Advance: $50,000-$350,000
• Recording: $150,000-$500,000
• Video production: $50,000-$300,000
• Tour support: $50,000-$150,000
• Marketing & promotion: $200,000-$700,000

At Songtools, we see that labels and larger artists usually opt for one-to-three month packages for playlisting, and always engage in at least 30 day budgets for ads, backing up the idea that higher-tier artists need longer budget commitments.

For newer artists with tighter budgets, these longer commitments usually come after shorter experiments with daily budgets are successful. 

Daily Spending: An indie artist's “sweet spot” 

The concept of daily spending is all about responsiveness. It’s perfect for boosting social media posts, paying for short-term advertising spots, or investing in content creation that capitalizes on current trends. This micro-budgeting approach allows you to be nimble and responsive to what's working to get new fans to your music, all while minimizing wasted budgets.

The key to daily budgeting correctly is sitting down to track the impact of your spend on a daily basis. Pro-tip: Before starting your daily spend, set up a KPI (Key Performance Indicator) tracking sheet. Choose 1-3 important metrics you want to use to track the impact of your spend, for example Increase in streams, increase in followers on Social Media and/or streaming services, increase in Save Rate on your song, just to name a few. Once you have these KPI’s determined, set aside 15 minutes every day to track and evaluate the impact of your daily budget. Give 1-2 weeks of lead time (at least) to ensure you give promotions time to flourish, but don’t be afraid to cut things short, if you’re not seeing the metrics increase – that’s the benefit of daily budgeting! 

Tools and Resources for Budgeting

For music creators, there are specific tools and resources that can make budgeting easier and more effective. You can use a Google Spreadsheet or Doc, Apple Numbers or Pages, OpenOffice, or Microsoft Excel to do this on a basic level, and if you want to take a  step up, you can graduate to Quickbooks (paid) or Wave (free) accounting software. Leveraging these tools can provide you with insights and control over your promotional finances. Songtools' various perfomance dashboards can provide many, if not all the indicators you need to determine your next budget allocation moves. For example, you can check out this blog post about determining whether you should slow down or continue promoting a certain song via our playlisting software metrics. 

Key Takeaways

Whether it’s daily, weekly, or monthly budgeting, each plays a unique role in building and maintaining your presence in the music industry. Remember, a well-planned budget is your stepping stone to creative freedom and career growth.