What happened to my radio?: The new profitable tastemakers

In my last post, I alluded to some of my views on licensing songs and the ties (or, more accurately, lack thereof) to Lifetime Value (LTV) of fans, and thus careers for the musicians. Now I would like to clarify my thoughts on ties between bands and brands and give a sense of how I believe the most mutually beneficial relationships can be built.

I believe that bands and brands have very strong natural ties, and that bands should really be thought of as brands in their own right. The key demographic for up and coming bands is generally the teenagers and young adults, which today is Generation Y. Known as the first generation to grow up with a true comfort with technology, having known no life without computers, we are distrustful of advertising and seek deeper relationships with the organizations to whom we give our time and money.

Music is a well-known key to human emotion. It also influences relationships - people who like the same music are almost instantaneous friends, thanks to a connection felt at a more primal level. Friends are also known to enjoy similar products and brands - they make similar connections influenced by shared experiences and compatible ideologies.

The key, then, is finding where these connections (between consumer and brand, and between that consumer and band) have potential overlap, and leveraging that connection to benefit both parties.

Your car commercial has a catchy tune in it, don't you think some folks might catch onto that (don't you want them to?) and want a download of that song? They would, and they would appreciate you for being the one to recommend it to them. You're building customer loyalty among people who aren't even necessarily your customers yet.

Afternoons had a song in a Lincoln commercial that premiered during The Grammys. I would love to have that mp3 by going to LincolnMusic.com, would be thankful to Lincoln for introducing me to it, and while I'm not in the market for a car right now, I'd have a slightly more favorable opinion of Lincoln. Lincoln, in turn, would have my email address (which they could use to introduce me to more music and further build my trust and respect, NOT to spam my inbox with nonstop car ads), my potential to spread the word to more friends (and thus fans of Lincoln), and a potential lifetime fan of their brand (bringing them perhaps as many as five to twenty purchases).

Traditionally, radio has made a living off being intermediaries -- brokering these relationships through their professional tastemaking and controlling the distribution channel (the AM and FM frequencies of our car and personal stereos). Thanks to the Internet and digital music, the distribution channels are no longer restricted -- brands and bands have access to each other and to the fans through a single channel with no need for intermediaries. (In fact, the Gen-Y fans would prefer not to have intermediaries.)

Many brands, of course, will be slow to understand these benefits. Corporations aren't often used to the concepts of direct ROI from marketing spends -- the people working the income sheets and the people spending the marketing money are on different floors and probably have never met. The onus (and thus, business), then, is on consultancies like Brands + Music to show the finance departments why they should be hired to project manage the marketing department's relationships regarding music. In the future, however, it would in no way surprise me to see brands whose target audience is largely Gen-Y starting music departments to help identify and build relationships with bands with similar demographic fanbases.

While brands may be somewhat sluggish to realize the potential of deeper relationships with artists and mutual fans, successful artists (remember, an artist is a brand, too) can coin themselves as tastemakers and built their own brands. You already see it happening, both with an increased number of vanity imprints (artists starting their own labels to help bring legitimacy to their friends and other bands they like) and with artists like Kanye West, whose blog mentions send page views through the roof for anyone fortunate enough to be on the receiving end of a link. In both cases, the artists leverage their existing fans' trust of their brand to become tastemakers and drive benefits for other b(r)ands, and in turn themselves.

The hope, of course, is to be able to automate some of the identification process for all parties involved -- many of the biggest changes to come about in the Internet era have come as a result of taking manual effort out of business processes. The technology will soon exist to have your brand grow many times in size by being the modern equivalent of the cool DJ in town, an opportunity you may not immediately think relevant. Of course, technology is just a tool, and the brands and artists who employ the tools make their own fates and fortunes with their usage -- technology will never be a substitute for genuinely identifying with the brand you sell and using your own passion to connect with the fans of your brand and desire to add value to their lives.



As a side-note, I'm sure questions will arise as to the potential of "regular" individuals to become tastemakers. To some extent, there is, but it will have to be through a channel they define for themselves (generally through blogs), rather than through sites like SUURGE. Musicane's (and many others) original business model presupposed fans would appreciate being rewarded for their music recommendations to friends. What they failed to realize was how pithy rewards from not having a substantially large sphere of influence is actually a demotivator (people would rather recommend out of passion than see a couple pennies). Where Amie Street separates themselves is by becoming a tastemaker in their own right by aggregating fan inputs (their biggest sales driver is moderated weekly emails with personal recommendations) -- their users buy based on their view of Amie St as a tastemaker, and getting small discounts is a nice side benefit that makes them feel good for being a part of the community.

Turn a virus into reverberation to get lasting fans

There have been a couple New York Times articles recently that have stood out to me. The first was Jon Pareles's piece on "Songs From the Heart of a Marketing Plan," discussing the licensing business's rise in recent years (thanks to DA of Chester French for the tip). The second was Gregory Schmidt's article on Broadway's use of MySpace and other viral techniques to fill theater seats. Both articles are about new ways for the arts to generate awareness.

The final quote of the Schmidt article touches on a point that I've been adamant about: “In the theater, there is only one proven marketing technique that works: to generate word of mouth,” Mr. McCollum said. “Everything else is a shot in the dark.”

Viral Marketing techniques are little more than the next generation billboard or TV ad -- they generate a bit of brand awareness if executed properly, but don't have any real lasting effects. You may see a spike in traffic as a result of a Viral Marketing campaign, but it rarely has any meaningful long-term revenue impact. Same goes for music licensing -- having your song licensed for a commercial is often good exposure, downloads of the single on iTunes will spike, as will MySpace plays, but how many new fans has it given you?

I actually admire the band Chairlift for deliberately not calling attention to the fact that their song "Bruises" was featured in the latest iPod Nano commercial ("I tried to do handstands for you..."). They knew that by making a big deal about one song being featured on TV, they'd alienate their true fans and make a big statement about their intentions as artists (to make money and get famous quickly instead of caring about their art and the fans who have supported them from the start).

As Seth Godin has posited for many years now, the best products, those that sell and that people love, are the ones with the marketing built in. Andy Sernovitz says "Advertising is the cost of being boring," and he's absolutely right. Viral Marketing is little more than a new generation of advertising -- its purpose is to generate brand awareness rather than create long-term fans and customers.

Reverberation Marketing, on the other hand, happens when a product (be it an album or a bottle of soap) is worth talking about and is properly exposed to its target audience. The first part, that it's worth talking about, must be baked into the product. The second piece, exposure to the target audience, is the job of a marketer.

Fleet Foxes have topped a vast number of Album of the Year lists (including my own), but that has nothing to do with the fact that their CD was available at Starbucks. In fact, the Starbucks deal came after they were playing sold out shows to thousands of die-hard fans around the world. They built a remarkable product, and exposed it talkers and tastemakers in their target audience (Pitchfork.com, for example). They continued to build with a tour opening for Wilco, a band with a similar target audience, and are now selling out headlining shows in Australia.

Perhaps most importantly, the fans they've made will stick with them. Viral Marketing encourages flash-in-the-pan artists or brands, whereas Reverberation Marketing builds a lasting fan-base that can be marketed to for years to come.

Fleet Foxes have focused on their fans, rather than general exposure, as they recognize the true fans will allow them to do what they love for the rest of their lives. I talked to them briefly after a sold-out show at The El Ray in October and they said they would be thrilled to play to that crowd at that venue for the rest of their lives if that's where their fans were. They even mock the marketing ploys of dollar-driven artists in a recent blog post:

"We have found the perfect place to record our next record, we've rented a barn/house in Port Townsend a few miles from where my dad used to build boats, and we're gonna build a big ole Titanic that will seem indestructible but will actually sink quite easily due to something minor that we overlooked (something like hella world beat / glitch pop influences or a continuous literal narrative). SO watch out for FORD AUTOMOTIVE PRESENTS FLEET FOXES II: TIDES OF THE UNDERDEMON, SERMON 3:16 exclusively at Best Buy, January 17th 2009!"

So what can they do next? Make the ties to their existing fans stronger. Get more direct contact routes than MySpace (email addresses, cell phone numbers, etc) in order to increase quality of communication (read: segmentation by location or depth of connection (single purchase vs large purchase and sharing)) and strengthen the connection. Understand what those fans want from them, understand who else those fans are listening to, reward the fans who help spread their message, and most of all continue to be themselves.

The true fans have come because they feel an untainted connection to the band. They will support the band for years to come. The folks who buy your single off iTunes because they heard your song on a commercial are virtually meaningless in comparison. Thinking financially of the lifetime value (LTV) of each:

• True fan: Buys 3 albums (3 x $10), 1 vinyl ($15), tickets to 5 shows (5 x $20), and 2 t-shirts (2 x $15). Also, they inspire 3 other fans, who might spend half that on average. Total LTV = $437.50
• Single purchaser: Buys one single on iTunes ($.99), likes it enough to buy the whole album (rarely happens -- perhaps 1 in 20 at best). Total LTV = $9.99

Obviously nearly every artist is going to have some of each. Exposure is not necessarily a bad thing, in fact it might help create more true fans. However, your time is much better spent targeting the true fans than worrying about a sheer number of ears you can get your music in. True fans enable reverberation for years to come.

For more on how targeting true fans can benefit the bottom line more than mass exposure (and some great examples), I highly recommend Ian Rogers's recent keynote speech from the GRAMMY Northwest MusicTech Summit.