This article was originally published on Dallas News here, and written by Melissa Repko.
A Plano startup that matches up big brands with musicians for ad campaigns has raised $6 million in a round led by two Chicago-based venture firms.
Music Audience Exchange, or MAX for short, uses a database of more than 2.4 million artists, 765 music genres and 200 consumer attributes, from political affiliation to hobbies to alcohol preference, to find the ideal match. The brands work with an artist who's featured in music-driven ads on Pandora, YouTube, Facebook and other streaming sites or social media apps.
For Nathan Hanks, the startup's co-founder and CEO, the company supports a grander mission: giving brands a fresh way to connect with an audience and musicians a way to get airtime. He said it also appeals to customers, who want to support brands who understand them and have grown tired of the same dull ads.
Companies hire MAX to help them connect with a certain customer, and its database finds artists that make music the customer might like.
Hanks said the goal is to find an artist who believes in the brand and whose music would draw in fans. Musicians are natural storytellers, he said, and they can "help consumers fall in love with brands again."
Hanks drew on personal experience. He has family members who are working artists and saw their struggles to stand out. He worked for a decade in digital marketing as co-founder and president of ReachLocal, a digital marketing company that helps local businesses win customers online. The company went public in 2010 and sold to Gannett last year.
Hanks said MAX's ad campaigns raise the profile of both the brand and the band. In one campaign, for example, Twix wanted to increase sales among twenty- and thirty-something men who attended music festivals and enjoyed the outdoors. It teamed up with pop-punk band Mayday Parade to promote the candy and gave fans a chance to win music festival tickets or a Skype session with the band. Walmart reported a 9 percent sales bump for Twix during the campaign.
MAX has worked with other brands, including Dr Pepper and Jack Daniel's and artists including Christian rock band Needtobreathe and Grammy nominee La Maquinaria Norteña.
In most cases, artists do not get paid, Hanks said. The brand's advertising campaign gives them a way to show off their music without paying for marketing.
Music streaming has tightened artists' budgets. Instead of selling an album, they make money from concerts and thousands of clicks.
"Back in the day, you had a song on the radio and the goal was to sell a $17 CD," Hanks said. "In the music industry today, you make your money through piles of pennies.”
Getting much-needed airtime or other kinds of exposure can be a challenge, too, said George Howard, a co-founder of MAX and associate professor at the Berklee College of Music and Brown University. He said his classrooms are full of young people who have put music at the center of their life, but aren't sure how they'll make a living.
MAX cuts through arbitrary obstacles that keep them off the air, like a record label, the right connections or a huge marketing budget, he said. "They gain access to a market that was completely walled off to them," he said.
Hanks said he'll use the $6 million of funding to add more features to MAX's data-driven platform. He expects to nearly double the size of the 25-person staff by end of year.
MATH Venture Partners and KDWC Ventures led the $6 million round for MAX. A third Chicago-based venture firm, G-Bar Ventures, and Gregg Latterman, founder and CEO of Chicago record label Aware Records, also contributed. The record label has worked with artists, including Train and John Mayer.
Troy Henikoff, managing director at MATH Venture Partners, said MAX stood out because of how it benefits three parties: brands, artists and consumers. He said the venture firm has now invested a total of $2.5 million in MAX.