Download Marketing Basics - Music Managers Forum Canada

MUSIC MARKETING FOR THE 21ST CENTURY: MARKETING BASICS
For the purpose of this program, we will define marketing as the activities that convert people
into customers and motivate them to make decisions to financially support an artist's music.
It might have been easier to write a marketing course outline for the music industry a few years
ago when the focus was on a single physical product - sheet music, piano rolls, 78's, vinyl LPs
and singles, 8 tracks, cassettes and more recently, CDs and DVDs.
But now...each artist, in fact every single composition - can now have its own marketing
strategy!
For some it's live touring while giving the music away for free to build fan support.
For others, it's driven by ringtone sales in foreign markets, or sync projects for game platforms,
or fans buying the music, tickets, and merchandise and even paying a monthly fee to join the
artist's web fan club - just to be up close and personal with the artist.
The challenge in designing a successful marketing plan is to develop effective marketing that
will be true to the objectives of the strategy and to the credo of the artist - there is no one-size fits
all answer.
The consumer has always been the target but until recently, the way for the music to get to the
consumer and to get the consumer to actively support the music has been difficult. But thanks to
the Internet, social networks, and web 2.0, the music consumer is more accessible than ever
before.
And, if you are on the business side of the equation, you will find that your artist is more
important than ever in developing great marketing that will work.
MARKETING AND THE MUSIC INDUSTRY
How big is this market? The global music industry revenue is estimated to be $75 billion dollars
and of that amount - $12 billion of that coming from music publishing (2008).
Although multinational music companies (or "the majors") account for most of the revenue
generated from the sales of recorded music, there are over 10,000 indie music companies
operating in the United States alone (2008).
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Today's marketplace is more complex and doors are open for careers that would have
been unthinkable as little as just a few years ago.
Creators and performers can establish and develop careers that are financed by a variety
of income sources - publishing, live performance, or other forms of fan support.
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Revenue from the actual song itself can be leveraged in any market in the world through
various activities including physical sales, virtual sales, downloads, ringtones and
monthly subscription services.
What does this mean for marketing music?
The first thing it means is that there is no longer one track to follow in the business of music.
Business and marketing plans can and should vary from artist to artist and from project to
project.
The second is that song - which used to be the end product - is sometimes simply another
marketing tool, a supporting resource for other revenue streams. It can be a calling card, a
giveaway, a teaser or a sale - all of these options are valid.
The third implication is that the focus of music marketing has shifted to establishing a fanbase or in old school terms a "fan club" - and managing the ongoing relationship between an artist and
their fanbase.
That's why a marketing plan is such an important part of your business plan.
THE 4 P'S OF MARKETING
Since the beginning of time marketing gurus love preaching the 4Ps of marketing - Product,
Price, Placement and Promotion. The question is, do they apply to music in its current
environment?
Product
Unlike the past when the product more often than not was recorded music on a physical
platform, today's product can be anything that the artist, creator or business partner wants it to
be.
It can be and often is more than one "product" - the song, live shows, virtual tours, downloads,
subscription revenues, merchandise, ringtones and publishing are all valid stand-alone products.
The challenge of marketing music is the need to consider the many options available and to fit
individual marketing initiatives into an aspect of the "product".
Whatever your product is, it's important to nail down what it is before you flesh out marketing
options and strategies.
Price
Pricing in the past was relatively unimportant. All CDs for example were sold to retailers for
basically the same price, and tickets for shows tended to cluster around a few price points that
were based on the drawing power of the artist.
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As for CD and download prices, they're pretty well set and standardized. Even if you decide to
cut your price, the effect may not be what you think - many consumers back away from
something that doesn't meet their price expectations.
If there's anything that describes pricing in today's music world, it is that there does not seem to
be any rules in place.
Take for example songs and albums. Some artists give their music away and not only emerging
artists.
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Prince used a give-away strategy on his latest album, giving it away free with the
purchase of a copy of a London newspaper.
Radiohead left it up to fans to decide how much to pay for their last album.
All this is driven by music being widely available for free on P2P networks...and in that
environment, how do you put a price on something that is available for free?
The answer is...you build a relationship with your fans. One that is as close and personal as
possible. People are less likely to steal from someone they know, and trust and care about.
When it comes to other revenue streams it's important to remember fundamentals of competition.
A film production that is looking to buy 30 seconds of music for a scene will often have an
option of using a variety of music selections - the ability to lock down the deal quickly and for a
competitive price is very important. For the music purchaser, the ease and speed with which they
can complete the transaction are often the deciding factors.
Merchandise pricing can vary widely based on how popular the band or artist is and the unique
qualities of the merchandise. Think Rolling Stones gear - expensive, yours - maybe less so. On
the other hand making your merchandise price attractive and fitting within the ability of your
fans to pay for it is important as is the recognition that fans wearing your merchandise is great
advertising and builds awareness.
So, it's not like pricing soup - there are many variables. Your challenge is to match your goal to
the capacity and the desire of your customer to pay for it. Bottom line - understand your fans and
what motivates them.
PLACEMENT
Traditionally this meant where your product could be found and purchased. It also could be taken
to mean having your CD in specific stores as well as being in specific sections and even on a
specific shelf.
Today - placement means something dramatically different. In effect, your music has to be
available everywhere possible, everywhere in the world. That means, by extension, that in theory
you need to develop a marketing strategy for every potential market for your music.
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Not really...
As you'll see by working through this outline, the name of the game is to create a relationship
with your fan, your customer, who will find their way to your music.
Your challenge is firstly to create the relationship, then build the demand, and then be sure that
the demand can be satisfied in whatever way the fan chooses to find your music.
You can sell everywhere as long as people can find you.
Promotion
Promotion traditionally means activities that promote the existence and the unique value of your
product. Promotion can include public relations, advertising and media plans.
In today's music environment, promotion means many more things because of the tremendous
impact of the Web and the emergence of social networks.
DEFINING YOUR BRAND
We've all heard about branding and concepts such as "you as a brand".
But, what is a brand? Here are 2 definitions of what a brand is:
1. A brand is a collection of perceptions in the mind of the consumer
2. A brand is the most valuable real-estate in the world - a corner of the consumer's mind
Note that a brand is not the same as the product - it is not a can of soda, or a car. A brand is a
promise, and the product - the soda or the car - is the delivery of that promise.
So your marketing plan must flow from your music to form a promise that is being made to your
target audience, and the music (a song, a live performance, an online experience) - is the delivery
of that promise.
This is an absolutely essential definition that you need to master before developing your business
and marketing plans. As a marketer of music, it helps to understand what is unique about you
and your promise to your audience.
The essence of what is unique about your brand and what will be of identifiable interest to your
audience will be the core around which you build brand loyalty.
The music business equivalent to brand loyalty is the fan club. So, building brand loyalty - your
fan club - is the primary goal of your marketing program and the key to the long-term success of
every artist.
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FYI
For fun, checkout 15secondpitch (www.15secondpitch.com). This is a free site that through a
series of exercises develops your ability to condense your unique identity into an information
bite of no more than 15 seconds - which is all the time you will probably have to interest anyone
in who you are and what you do. After you have worked your way through it - try saying your
message out loud. If it doesn't sound like you...do it again. Not as easy as it sounds...
Hopefully, by the end of the exercise, you will know what your brand is, what is unique about
you, and you will have your very own USP (Unique Selling Point) or BIS (Brand Identity
Statement)
BUILDING YOUR BRAND
Once you have defined your brand you can start developing your marketing plan. Having a plan
gives you a roadmap and a point of reference as you begin to tell the world about your music.
And remember, building a brand is a long-term proposition. It's the cornerstone of your career
and whatever you do - writing, performing, recording - any public activity, can have one of three
impacts on your brand:
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Brand negative - it works against your core message. You are never to undertake
something that is brand negative - even if your cousin thinks it's a good idea.
Brand neutral - it doesn't have any impact on your message. You can allow yourself the
luxury of a few brand neutral things (because you like the idea) but remember that
everything you do costs time and money - make sure you have some of both to lose.
Brand positive - it reinforces your message and adds value to your brand. For every
marketing activity, look in the mirror and make sure that what you are going to do works
for your message and strengthens the connection with your audience.
Throughout your career, it will always be necessary to make sure that you are focused on who
your audience is and how to keep them as fans and paying customers.
Eventually, your brand (and your music) may change - you may evolve into new areas. When
and if this happens it is important to remember two critical things:
1.
Where you are going may not be where your audience wants you to go - you may lose
some fans along the way. Is this something you can and want to do?
2.
You will need to develop new fans.
In some cases, you may decide to change or alter your brand because being remarkably good at
tracking trends and your fan base direction, you have determined that your fans are going in a
new direction and you need to adapt if you want to keep them.
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Make sure what you are undertaking is really something you can do and something you are
capable of being. If not, your audience may quickly abandon you.
Too Much of a Good Thing
Some artists have killed or shortened their careers by being over-exposed.
Selective, well executed marketing is always better than trying to be everywhere and spreading
yourself too thin. Selective - in this case - means choosing the best options in terms of
cost/benefit and in terms of brand reinforcement.
Marketing has to be cohesive and it needs to be integrated.
Investing effort and money in marketing forays that stray from your plan is not only is wasteful,
it may conflict with other activities that positively support your image and objectives.
Go back to the idea of being brand positive. You can't possibly want or need to be everywhere.
Stick to brand positive activities, pick your spots and become great at working them.
YOUR MARKETING TEAM
For most of the last century, artists went to an advertising agency for advertising, a website
developer for website development and a graphic designer for graphic design.
While this may still hold true, thanks to today's technology, titles don't help to zero in on the best
solutions.
We need to think about what we want to do, not who we want to do it. The what - is in the
marketing plan, along with a budget assigned to it. But if there's no budget, then you know who
is going to have to do it.
So think website development vs. website developer and promotion vs. promoter. Look at what
you do best and what you don't. Identify the most important don'ts. Then look for the best people
- with creativity, passion and, most of all, fit - who can fill the gaps in your plan.
Skills and Competencies
First order of business - understand what you can do and what you can't.
In order to develop and execute effective and dynamic marketing, your team will need some
basic skills and competencies, including:
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Reading, writing, and math. Marketing materials laden with spelling and grammatical
errors or inaccurate financial forecasts is a guaranteed way to limit your success.
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Speaking and listening. Being able to convey your ideas and being able to hear the
feedback and decipher it are absolute musts. Being a good communicator is surpassed
only by being a good listener.
Brainstorming. Creative thinking, decision making, problem solving and reasoning. The
other side of the brain stuff. You either can do this or you can't.
Planning. Being able to efficiently allocate time, money, materials, and staff. People who
are good at this are worth finding and holding on to.
People skills. Being able to work in teams, teach and lead others, and the fine art of
negotiation.
If you have the skills and competencies to take on your own marketing then that's always an
option. Otherwise, find people who do and don't be afraid to leverage their skills and
competencies. Ask for a proposal and more importantly meet with potential partners, ask
questions and make sure you feel comfortable with your choices.
Remember, they too need to understand your brand, your audience - and most important - your
music.
UNDERSTANDING YOUR AUDIENCE
Next to the music, your audience is the single most important element of your career. This is not
only where the adulation, the validation and the gratification come from, it's also where the
money comes from.
The audience is the customer. The audience is in control. The audience is king. Units sold,
backsides in seats, numbers of downloads and hits on web pages are all products of audience
participation.
The artist's relationship with his or her audience has been transformed with the advent of the
Internet.
It matters less if a popular record store or big box retailer carries your music - because a fan can
order it on a transactional website. In theory, there is no such thing as being out of stock, and
your music "store" is open 24/7.
Physical product is giving way to electronic product - legal downloads as well as P2P file
sharing. Fans can now access an enormous selection of music spanning every genre imaginable
and with that access came - control!
Today's consumer - your audience and your future - is in control of the market.
Being successful in the music marketplace means connecting with your audience,
building and maintaining that relationship, and converting that relationship into
revenue.
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Further on, we will look at managing your fanbase (your audience database), but before we move
on to discuss marketing plans, let's look at some basics about audiences.
Successful marketing plans are drawn from research and part of that research is the
understanding of who the audience is, what their characteristics are and what motivates them.
Individual fans can be thought of as members of tribes - with similar clothes, hair, language and
mannerisms.
In the beginning, the best way to learn about your audience is through observation. Check them
out at shows or at launches, chat with them and try to figure out what you're hearing and what
you're seeing - what are their age brackets, gender, what clothing do they wear, could you spot a
fan from 10 yards away?
As careers develop, audience characteristics can be more difficult to nail down because the artist
may be attracting different types of audiences - or in marketing speak, appealing to multiple
audience segments.
While this calls for diversified marketing it is important to not go down a marketing road for one
audience segment that will alienate another.
In the music world, your audience is everything - never forget who they are.
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