Hip Hop Gets Down with the Deals

Musicians of an earlier generation used to sneer at corporate sponsorships. For today's stars, they're both cool and lucrative

By David Kiley

When hip hop majors Ludacris, Big Boi, and Jermaine Dupri took the stage on Apr. 7 at Manhattan's Dodger Stages, it was for a select audience of about 50. This wasn't a VIP concert, however. The artists, assembled by TAG, the youth marketing unit of ad agency McCann Erickson, were there to tell marketing execs from the likes of Coca-Cola (KO ), Wendy's International (WEN ), L'Oréal, and Verizon Communications (VZ ) what kind of sponsorships and marketing deals they would be interested in (see BW, 5/23/05, "Mad Ave Is Starry-Eyed Over Net Video").

This is a major shift in mindset. While many artists of an earlier generation believed that renting out their tunes to be used as ad jingles was an odious form of selling out, hip hop musicians are aggressively courting marketers, often using brand placement in their music as bait. They consider big brands to be a part of their identity and enthusiastically weave them into their music, videos, and public lives. Getting paid for it is just an extra measure of success.

"Without three or four business deals with major brands, you aren't seen as cashing in, and cashing in is part of the hip hop culture," says Josh Taekman, former executive at Sean "P. Diddy" Combs's Bad Boy Worldwide Entertainment Group and now president of marketing firm Buzztone.


  Increasingly, advertisers are biting, despite the often-ribald lyrics in rap songs. There are an estimated 50 million hip hop fans in the U.S. and 100 million worldwide, mostly under 34 -- a coveted demographic group, and one that's increasingly tuning out traditional ads. Bob Levite, vice-president of marketing for Wendy's, a TAG client who attended the business conference at Dodger Stages, says the fast-food company "has to get into hip hop, because that's where the kids all are."

In the best case, both marketers and artists cash in. Rapper Petey Pablo went from rapping generally about gin to specifically singing about Seagram's gin in his Freek-A-Leek hit after inking a deal with Allied-Domecq's (AED ) Seagram's brand, helping spike gin sales more than 10% in urban markets. Cadillac (GM ) credits the popularity of its Escalade SUV in hip hop music with surging sales of its SUV as well as an overall brand lift. Sales of the Escalade grew last year to a record 62,250 units, and it was the top-mentioned brand -- 41 times -- in Billboard's Top 20 singles, according to Agenda, a San Francisco ad agency.

While formal contracts to write songs about brands are rare, some rap artists have seeded their songs with a brand name and then sought a deal. Others work the label in after inking a sponsorship agreement, as a goodwill gesture. Antwan "Big Boi" Patton of Outkast reaped a six-figure deal in 2003 after he recorded Hey Ya!, which featured the recurring line, "Shake it like a Polaroid." The deal included appearing in ads and performing with cameras in hand.


  At the TAG conference, Patton let it be known he was interested in a cross-promotion with the Ford Mustang, a car he says he loves, though he hasn't yet written it into a song. P. Diddy is currently negotiating a deal with Ford's (F ) Range Rover unit, a brand he has written into his music, after a deal he was seeking with the automaker's Lincoln brand fell apart.

Perhaps no artist is better at managing this mutual exploitation than 50 Cent. With three of the top 10 songs on the Billboard Hot 100 list, 50 Cent (real name, Curtis Jackson) has his own line of hot-selling Reebok International shoes and apparel, which has surpassed Reebok's sales for any NBA star and for rival artist Jay Z. The deal calls for 50 Cent to help develop products, perform in ads, and wear the clothes and shoes in performances and videos.

Reebok, meanwhile, is cross-promoting 50 Cent's music. The rap artist's annual take, based in part on sales, could pass the seven-figure mark. Chris Lighty of Violator Records & Management, 50 Cent's dealmaker, says "Fitty" didn't plug Reebok in his lyrics before the deal. "But as a good business partner, Fitty has mentioned the brand since," in songs and performances, he says. In the hit song Ryder Music, for example, 50 Cent raps: "Soon as I step on stage, the crowd applauds. Soon as my sneaker wear in stores, Reebok stock soar."


  The influence of hip hop stems from its runaway crossover popularity in suburbs, besides its obvious domination of urban markets. New York marketing consultant Mastermind Group estimates that what it calls the "urban mindset," with lyrics about city life, sex, violence, sports, and brand worship includes 100 million consumers worldwide. That's bigger than the U.S. Baby Boom generation.

Of course, not every hip hop deal goes platinum. McDonald's (MCD ) stirred up controversy among artists, agents, and bloggers recently as it explicitly offered hip hop artists quid-pro-quo payment per radio airplay for songs it approved that mentioned "Big Mac." This isn't the model artists and most advertisers are pursuing. "The only boundary the artists and advertisers are looking for is that it feels authentic and not scripted," says Lori Senecal, director of McCann-Erickson's TAG.

However the deals are structured, being a hip hop favorite will take a little getting used to for some brands. The genre is replete with obscene and violent lyrics, so for marketers of products with "family" images, tying the brand to a rap artist requires a thick skin.

Yes, Courvoisier sales took off after Busta Rhymes wrote a rap paean to the suddenly hot, nearly-200-year-old French cognac, titled Pass the Courvoisier, but did the venerable brand really want its name used in the same lines as, "Give me some money, you can give me some cars. You can give me the bitch. But make sure you pass the Courvoisier."

Perhaps not. But these days, that's the sort of risk many marketers are happy to take.

Kiley is Marketing editor for BusinessWeek in New York

Edited by Phil Mintz

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