FRUKT on Music

About face: beyond endorsements

2009-11-19T14:48:00Z

A couple of interesting research studies into celebrity endorsements have surfaced of late, prompting us to look again at the role of endorsements in music. A new Adweek Media/Harris Poll, investigating the persuasiveness of celebrity endorsements, offered an insight into the most effective routes to market. Business leaders – of the Steve Jobs variety - came out on top as the ‘most persuasive’, followed by athletes, TV/movie stars, then musicians, with former political figures trailing along in fifth place. However, when the question was flipped as to which were the ‘least persuasive’ athletes, business leaders, politicians and movie stars were deemed less viable than musicians.

Celebrity endorsements can be exceptionally powerful, raising awareness, increasing a product’s appeal and influencing the buying decisions of fans wanting to emulate the lifestyles of their favourite stars. Music, arguably, has more resonance than high profile endorsements from athletes due to the fact that unlike sport the endorsee comes complete with their own soundtrack. This gives a brand leverage every time their music is heard in numerous different possible locations, whereas sport can often be confined to a very limited – and literal -playing field.

A quick scan across the barrage of media channels available today highlights a seemingly never ending string of pop stars and musicians extolling the virtues of a plethora of branded products. Another recent study, The Celebrity Endorsement Sensor, of 24,000 consumers across 25 countries, by the media agency Mediaedge:cia (MEC) highlighted how 35% of its respondents believed celebrity endorsements managed to improve a brand’s overall awareness. However, this awareness is subject to a major perception flaw. A sizable 53% said they had problems remembering which celebrity was attached to which brand. So a brand netting a lucrative music endorsement may actually indirectly be playing into the hands of a rival company. This is a problem that is exacerbated if the musical endorser in question is somewhat fickle in their choice of alignments over a given period.

The Mediaedge study also stated that male adults within the 18-34 age bracket are the most likely to engage with celebrities via digital activities, and it is in this digitally enhanced realm where music celebrities can make a memorable impact. The relationship between artist and brand has evolved from a simple ‘cool-by-association’ proposition to a deeper, more rounded, collaborative partnership. In order to achieve ‘cool-by-integration’ brands need to become actively and creatively involved with their endorsees in broader more consumer rewarding campaigns.

A nationally representative survey in the UK – which features in the FRUKT Music and Brands manifesto 2010 - recently asked: “Which music marketing campaigns make the biggest difference to your brand perception?” Artist endorsements came in at a lowly 23% of all the possible categories. Ticket/download giveaways, the ability to share music with others, receive exclusive content, and get closer to the acts they love were amongst the highest brand and music touch points for consumers.

Endorsement partnerships are like relationships. They need chemistry. It’s ultimately a social science, a love triangle between three separate components – brand, band and fan. As with a chemistry set it’s a delicate balance between creating the perfect mix and it all blowing up in your face. However, get the ingredients right – a dash of star power, a hint of genuine creativity and a healthy scoop of believability – and an endorsement deal rooted in music will give your brand not only a figurehead but a whole new voice.

Here are some key pointers to consider when embarking on a music-based endorsement deal:

1. Understand your market

The reason that some celebrity endorsements fail to provide a ROI for the brand is because celebrities have often been identified in an emotional and sometimes un-researched manner, with the campaign concept tweaked to fit the celebrity into the creative.

2. Forge creative partnerships

The key thing to remember is that placing a celebrity in an ad is not an idea in itself. The off the shelf mentality has gone, campaigns, and even the songs within them can be built from the ground up. Embrace and harness the creativity of those you have decided to work with.

3. Start a conversation

Give them a story. Casting a multi-million dollar film star in your movie means nothing if the script is terrible. The same goes for a music artist. They may be the most popular face on the planet, but if the story they are cast in is bad no one is going to want to listen. Build your spokesperson into a narrative, an ongoing conversation where the music fan plays an active part in the musical journey.

This piece is adapted from the article ‘Sound Investment – From Endorsements to Creative Partnerships’ from The Brands and Music Manifesto 2010. Download a sampler here

The two faces of Google in Music

2009-11-03T11:58:00Z

As hard as it is to predict who the winners will be when the inevitable rationalisation takes place within the increasingly cluttered ad funded / music subscription market place, it's a fairly safe bet to suggest Google will still be in a strong position. What works so strongly in Google's favour is that unlike their competitors in this market they are already an established part of our online behaviour through basic search or Google owned YouTube (a key music discovery portal in it's own right for both audio and visual content). Google facilitates on-demand music discovery without the need for subscriptions or software downloads.

So when rumours surfaced a few weeks ago that Google was set to announce a new music service, interest was understandably high and If you have seen Google Music in China you could be forgiven be getting excited about the possibilities for future music discovery. So when the Google One Box announcement came last week it actually felt pretty flat. The Google One Box service directs users to preferred, partner sites allowing them to listen to a track once before presenting them with an option to buy. Great for the chosen partners, Lala, iMeem et al and the major labels desperate to convince consumers they should actually be paying for music, but what does this mean for independent artists who rely on selling direct from their own websites? Suddenly it feels like rather than empowering and facilitating music discovery Google are dictating it?

Their accent to global super-brand status seems to have been driven by a simple formula. 'Empower internet users with better tools for free' (See Google Mail & Maps) With this launch, have Google undone a lot of their good work and forgotten their key strength as a facilitator?

Just for a moment I was questioning their future role in music. Then I was reminded about Google Wave the brainchild of genius brothers Jens and Lars Rasmussen (who already have Google maps on their CV) Google Wave is a real time communication platform which was created from the start-point of 'What would email look like if it was invented today?' This potentially game changing service feels much more 'Google' and reconfirms their position as facilitator extraordinaire. It's too early to understand the full implications for music fans or artists, but it doesn't take much imagination to understand it's potential.

So I remain confident that Google will be a key player in music, but will it be a key player with Google One Box it's dedicated music offering which dictates where to buy or with Google Wave which empowers conversations and possible engagement around music? No doubt music fans will be the ones that ultimately decide.

What’s the future of music sourcing & buying for brands? Part one

2009-10-01T16:29:00Z

Many of us in agencies, record labels, music publishers and music consultancies are looking to answer this question.

There are many issues to consider, most of which concern how one interest group is changing its relationship with another:

* Brand & agency relationships
* Music talent & music industry relationships
* Music consumer & music industry relationships

For this piece, let’s look at the changing nature of brand & agency relationships. We need to look back first before looking forward.

Agencies (of all kinds) have historically been the gatekeepers of client relationships. Agencies recruited and managed supply chains, and suppliers were kept away from clients. Agencies were always positioned as the experts to make the best decisions on:

* Creative collaborators (or creative assets) for a particular project. In ATL, key collaborators include the director/production company, the on-screen talent, the post-house and the music production company/composer. Creative assets include stock footage and existing music tracks.
* The commercial terms on which these creative collaborators were engaged or creative assets were purchased.

Many agencies liked to maintain linear top-down operational relationships with suppliers in order to :

* Control the creative agenda
* Control the financial agenda (allowing mark-up on supplier invoices)

Where the agency’s creative agenda (i.e. getting the client to sign-off the work) was served by delaying creative decisions, this would often impact the financial agenda by raising supplier costs. Nowhere more is this true than for licensed music where 11th hour clearances inevitably come with premium level licensing fees. Given agencies aren’t spending their own money, this situation served both agencies and favoured suppliers well. This became even more true as client procurement departments shaved margins on agency fees, which agencies sought to replace with mark-ups on supplier costs.

During the early-mid noughties, the linear top-down model began to be challenged through the rise of client procurement departments and independent production/marketing procurement consultancies. These specialists started to demand better justification for agency creative decisions in relation to the corresponding costs. Invoices were demanded and examined, and in some case poor (or borderline negligent) practices were uncovered. The harsh economic realities of 2008 & 2009 have exacerbated clients’ need to secure best value in all purchases. Cost inefficiencies (i.e. overpaying) that might have been tolerated in the good times pre Summer 2007, are certainly intolerable during 2009 into 2010.

So what next? What will the future look like?

The obvious answer is decoupling – the removal of campaign execution from agencies. Of course agencies are fighting back hard against this trend. They need to protect mark-up on supplier costs which frequently covers the overhead of in-house production staff (where the agency fee no longer does). The truth is that decoupling won’t work in every case, though increasingly clients are considering it.

One interesting recent development here:

Campaign’s graduate-focussed issue of 25th September ’09 included an article by recent agency recruits entitled “If I Launched An Agency”. Common predictions about future agencies throughout the various pieces were:

* Minimal numbers of employed staffers
* High reliance on outsourced expertise
* No fixed physical presence
* Constantly adapting agency identity including name

This points perhaps to a future where lean agencies hold the high ground on brand strategy & creative, but outsource execution to avoid the overhead of hiring & housing production departments. Remote contractors across all production disciplines (including music) will work directly for clients within an outsourced web, coordinated by production and marketing procurement consultants. This situation already exists for some clients who no longer want to support the overhead of large roster agencies – sadly this has led to redundancies in many places. The opportunities are now there for specialist contractors who can add more value, at greater speed for lower costs.

So what are the key tips here for clients?

1. Insist on competitive tendering for production suppliers and don’t rely on one recommendation as the sole solution.

2. Insist on greater visibility in the supplier chain. Know the end-recipients of your production budget and ensure you're receiving the full value of their product/service and not losing it through mark-ups.

3. Take advantage of best-practice process from those with niche expertise in specific fields – this will include music, on-screen talent and photography. Demand that those who buy products/services on your behalf are fully aligned with the brand’s agenda. A loyal partner should be able to look the client in the eye and truthfully answer the question: “What’s a fair price to pay for ….?”

4. Audit productions after the event. Was the optimum cost-efficiency achieved? If not, why not? Learn from mistakes and instil process to avoid repetition.

Popping up on a high street near you

2009-09-30T15:04:00Z

HMV’s name jumped out at us during a trawl through the music headlines a week or so back. If you didn’t see it the entertainment retailer announced it would be taking advantage of empty real-estate in the recession-hit high street to open temporary pop-up stores in some of the UK’s mid-sized towns. Hats off to this great idea to cope with Christmas demand.

But there’s no reason should this type of initiative should be confined to traditional retailers. While the concept of pop-up stores is not new, taking this principle and applying it to the world of music and brands might have some interesting consequences. What better way to drive awareness and engagement than by making a splash on the nation’s high street? Don’t wait for the customers to come to you, go and find them.

Take a music service rollout that is struggling to gain traction. A simple pop-up demonstration store with some smart incentives and maybe a few bands would almost certainly draw a crowd. Alternatively a clothing brand with a music campaign in full swing could easily replicate the HMV model and establish a physical presence nationwide to support its core activity. There would be space for live music, unique dressing of the location and bespoke promotions that might not be feasible in the permanent stores. Flexibility has to be the key advantage here.

Maybe we’re too focused on the virtual world and not enough on the real world on our doorstep. There must be logic in trading the social network site that’s attract a handful of would-be customers, for a pop-up store that brings your brand activity to life on the high street.

Is this reality of a pop-up music brand experiences viable? As with anything it would depend on a lot of factors to consider – location, budgets, proximity of your target audience – but there’s no reason to think it won’t happen on a high street near you soon. Watch that empty space

The Tweet 40

2009-09-18T12:00:00Z

Vodafone is building upon it's presence in the micro-blogging platform Twitter in an attempt to drive traffic to its Vodafone Music store. The mobile operator has created a new service which it is billing as the "first-ever interactive real-time top 40 chart for music lovers". Making use of Twitter's 'hashtag' capabilities, users add the artist and track name that they are listening to, proceeded by the RealTop40 hashtag. These votes are aggregated on the realtimetop40.com website, where a constantly updating top 40 list sits and of course all tracks can be purchased from the Vodafone Music webstore.

The headline-grabbing, investment-driving phenomena that is Twitter has stamped it's place firmly into the Zeitgeist. From Obama to Stephen Fry it's hooked an estimated 10m users worldwide, claiming consistent year on year growth of 1000%. If MySpace is synonymous with music and Facebook for friends. Twitter is about opinion and soap-boxing. What's more, researchers at Penn State University found that 20% of tweets are about brands, so harnessing and shaping the platform's chit-chat (and making it positive) has never been so vital.

Along the same lines as wearehunted.com, the Real Top 40 is a neat activation. Music has broad appeal and people are willing express their opinions on it, so the activation is inherently viral. Moreover it makes use of the Twitter's hashtag functionality and carefully, almost surreptitiously mobilizes Twitterers off-site for a soft-sell with relevance.

Four tips for mobilizing those Tweeters:

1. Give them a reason to engage
Deliver an activation that is interactive and go for instant gratification, Tweeters want to be a part of something there and then.

2. Make it viral
Of course the realm of Twitter is inherently viral, but build in broad appeal to your activation to ensure it echos.

3. No one likes a pushy brand
Allow the users to own it and let your brand take the back seat. This is their territory so be respectful. In the case of Vodafone's activation there is no company name grandstanding. The branding amounts to a logo on the website.

4. Offer, don't sell
Of course there is an end game to all this, but again don't be too pushy. The 'offer' should have relevance.

Building genuine hype & engagement online

2009-09-10T11:21:00Z

Recently music blog aggregator Hype Machine blacklisted 40 artists accusing them of creating fake accounts to manipulate its popular song rating in order to inflate the ‘Hype’ around them. This raises several questions. How much difference is there between fake and genuine hype and how can you build not only hype but engagement around music on social networks?

From my experience of sponsorship I know the following scenario only too well. An agency creates a music programme for a brand and sets up the now obligatory MySpace and Facebook page. Within minutes there is an email circulated asking you to befriend the event or join the group, and to add a comment to the wall to enthuse just how good this event really is.

All fake hype of course. You could argue all pretty harmless unless the intended target audience cottons on. Let’s face it in most cases this fake hype is painfully transparent especially when the 50 something finance director rocks up and joins in.

Assuming you decided not to pursue this overtly fake hype route, the very next step may well be to brief the appointed PR agency to – you’ve guessed it, generate some hype. Not to say your event isn’t great, but let’s face it there is certainly a large element of fake hype driving your PR campaign and if the editor buys it to be genuine enough it will probably make it to press.

This is great but “I want genuine fan engagement“ you can hear the brand manager saying. Now the challenge really begins. Once you have waded through your wall comments and removed the ‘Check out my band’ plugs how much positive and meaningful engagement can you really find?

How to building genuine music engagement & hype online:

1. Have a story: communicate why you are involved in music and your role from the start and continue to communicate it.

2. Don’t waste time on fake friends: focus on quality over quantity, avoid creating your own clutter.

3. Work hard: frequently update and refresh content.

4. Provide a reason to engage: what kind of engagement can you expect from an endless stream of factual announcements?

5. Go where the people go: consumers only visit a handful of websites, don’t expect to drive them to a new destination site.

6. Have an off-season plan: ensure you have a plan to continue to engage fans when your activity ends

For Gimmick Sake

2009-09-04T09:48:00Z

Playing night after night at the Hammersmith Apollo doesn’t seem so appealing to the exuberant performer in search of the next thrill. Ever since the Beatles pioneered the ‘gimmick’ gig by performing on a Saville Row rooftop, bands have been rocking out in all manner of places from high on snowy peaks (The Alarm) to leagues below the sea (Katie Melua). Brands have also got in on the act.

They’ve tried it all, from unusual locations, to mad stunts, but how can they be sure they are really adding value? Sony Ericsson, for instance, invited 200 people to sit on a plane at 35,000ft with a jigging Jamiroquai at their feet back in 2007. Unquestionably a unique camapign, but some may have struggled to find the immediate relevance to the Walkman handsets. Until it was duly pointed out it was to reinforce the message that you can listen to music without limitation. It’s no coincidence then, that most of the major brands active in music are all vying to find a more unusual place to host a gig, and all conveying the message that live music can be taken literally anywhere.

However, is this message getting lost amidst the gimmick itself? If you really have to choose an ‘original’ location, then do as Carling did when they invited fans to see their favourite bands play at festivals around the UK in the back of Carling’s refrigerated trucks. The gigs were an ancillary but popular part of the ‘Strike it Cold’ campaign and the Carling Cold Beer Amnesty, which all reinforced the unifying product message that ‘quality’ is best served cold.

Similarly T-Mobile ‘s ‘impromptu’ Pink performance for the ‘sing-along’ in Trafalgar Square was a well timed performance, following the hype from the flash mob dance in Liverpool St Station, that fitted rather snuggly into the ‘Life’s for Sharing’ campaign. Alternatively, if gigging in a manhole isn’t your thing, take things digital. YouTube hosted the world’s first collaborative online symphony concert, which invited musicians from all round the world to enter with the chance to play at Carnegie Hall in New York. The entire campaign was hosted, submitted and performed on YouTube allowing it to showcase its viral abilities and its wealth of credible content that goes well beyond wedding dances and two legged dogs.

A well planned stunt can unify a campaign and showcase your brand’s product and messaging very effectively. If finding a new location is what your brand needs it should complement a larger campaign and not be standalone. The key to capitialising on the inventiveness of a particular promotion is in maintaining a clear lead back to what makes the product itself unique. Full articles and comments are included in the new FRUKT Music Intelligence Report. To find out more visit www.fruktmusic.com. You can also follow us at twitter.com/FMInews

Buy-ology – Part 3

2009-08-28T09:49:00Z

What of both brands and artists working together? Certainly the days of dollar-heavy, simple endorsement deals are over (such as Michael Jackson and Pepsi in the Eighties), but there remains good potential for both parties if they are well matched.

"We do know it works, but it only works in those cases where the relationship is authentic. And that means, from the consumers point of view, it seems real, relevant, part of the story line and most importantly it has ritual"

The objectives of both brands and artists have become increasingly aligned and consumers are less cynical, so long as there is that crucial ‘fit’. However, understanding the rights, consumer motivations, channels, and technologies which connect the two sides is crucial, and increasingly makes the case for specialists in the music space to help both sides form successful unions.

The full interview with Martin Lindstrom appears in the new FRUKT Music Intelligence report, out now. You can also follow us on Twitter.

www.fruktmusic.com

Buy-ology - Part Two

2009-08-26T11:20:00Z

Whilst brands need to harness the power of music, so the reverse is true and Martin cites three factors crucial in creating an artist’s “Brand” – something which will enable deeper and wider consumer engagement, and ultimately increased revenues. The viral channel, the physical channel and The Story.

Martin sees viral activity pre-empting any tour or music release as paramount to creating a battalion of direct marketers working for the greater good of the brand. "They basically have to develop the Obama technique of having core believers who spread the word of mouth. So they become a direct marketer in reality".

Following on from this is the importance of the Artist Brand making a physical connection with their fans - creating unforgettable experiences and ‘Superfans’ who'll be more loyal and more likely to become a brand exponent. "We do know today that concert goers are more than 350% likely to recommend a CD, or that music, or talk about that artist, than if they are not attending a concert." The fact that some of the world's biggest grossing acts are also the biggest touring acts is no coincidence.

Lastly, The Story. Every Artist Brand needs one. "Artists need to treat themselves as a brand... Bono walking around with his funny sunglasses, or Elton John with his $150k flower arrangement in his home each week, or whatever funny story they have. All those things are just adding to their brand." All the rumours, rites and rituals build the legend and the intrigue… it’s no longer just about the music.

Continued on Friday... The full interview with Martin Lindstrom appears in the new FRUKT Music Intelligence report, out now. You can also follow us on Twitter.

www.fruktmusic.com

Ensorsements They Are A Changin'

2009-08-26T07:22:00Z

So Mr Dylan is apparently considering the voicing directions for your journey for two SatNav brands... this will doubtless raise eye brows of not just hardcore Dylan fans, but anyone with even the slightest sense of belief that some musicians actually stand for something - that they create music at least in part, as a statement and in Dylans case, a more explicitly political one at times.

He's not alone. In recent months Jon Lydon - the archetypal anti-establishment punk can be observed here jauntily selling butter for Country Life and Iggy Pop plugging Swiftcover's car insurance here - until it was pulled as the copy was felt to imply that he actually used Swiftcover, when they don't actually insure entertainers.

So what's the problem? Musicians aren't selling as many CDs as the traditional business declines, so they turn to brands as a source of revenue. No big deal right?

I am frequantly asked whether I think artists working with brands is 'selling out' - and my answer is twofold:

1. Are you 'selling out' by collaborating with a brand any more than you are a major label? Brands tend to not demand rights to your entire career for the rest of your life or take significant royalties from you. Not to say labels are 'bad' just that for any artist who wants commercial success, there are likely to be concessions they make to get the investment and exposure they need to achieve this.

2. Brands are increasingly smart with their artist partnerships - and so well positioned relationships where there's a natural fit between artist and brand or product can actually be really interesting (i.e. Pharrell and Converse, Dave Stewart and Nokia)

Firstly, none of these artists needs the money, not in the sense that Andrew Ridgley or Dane Bowers most likely do anyway - so why oh why would they compromise their position?

Secondly, could they have chosen worse fits with a brand? A literal 'British' thing with Lydon and 'Rebellious' thing with Iggy (though not sure I really even get this) are not enough. God only knows what the connection between Dylan and SatNav voicing is - he's barely understandable at the best of times, so I can't see how him mumbling at me on some unknown foray up North is going to result in positive vibes towards either him or my TomTom.

Personally I believe it's an exciting time for artists - there are many more ways for them to fund their careers, brand partnerships being a significant one. However, these 'role models' are not setting a good example... discuss.

Full articles and comments are included in the new FRUKT Music Intelligence Report. To find out more visit www.fruktmusic.com. You can also follow us on Twitter

Buy-ology - Part 1

2009-08-24T10:25:00Z

Since starting his own marketing agency aged 12, Martin Lindstrom has become one of the most respected branding gurus in the business. Among Time Magazine's top 100 most influential people, his advice is sought and savoured by the world's biggest brands. His latest best-selling book, 'Buy-ology', is the culmination of a $7m neuro-marketing research project.

FRUKT recently asked Martin to turn his thoughts to music.

Why do you really like Coca Cola over Pepsi, or vice versa? Is it the taste, the brand colour palette, the advertising? According to the research, chances are it's because the mother of your best friend (the one with the big trampoline in the garden) served it up on a hot summer's day with a plate of flapjacks. This, or other happy memories, 'branded' into the darkest recess of our sub-conscious minds is what most influences our buying decisions. Of course we are not aware of it, if asked we'll conclude with an answer that makes more rational sense and is less personal... "I prefer the taste".

Known as somatic markers, these brain bookmarks are stored for the easy recall of positive or negative feelings, emotions and memories experienced at a time in our past. The waft of a scent once worn by an ex-partner, the old cowboy films watched in the company a much-loved, long-gone granddad, the music that became the common ground that fostered a life-long friendship... The music.

Martin believes sound and music to be the best somatic markers "Music is basically hardwired behaviour to effect our mood", says Martin "the only express elevator to our mind." Importantly for marketeers, the study revealed sound to be the single most important sense when building a brand. Smell is second and sight third. Yet 83% of all communication today focuses on sight alone.

"Once you have embedded it in the brain, we as human beings, cannot forget it so it's a really good way of doing sticky communication. If you're not using music you need to come up with an incredibly convincing argument as to why you're not"

Continued on Wednesday... The full interview with Martin Lindstrom appears in the new FRUKT Music Intelligence report, out now. Email: sales@fruktmusic.com or head to the website for more information on subscriptions, or to sign-up for your free trial.

www.fruktmusic.com

Mobile music: Brand-as-you-go

2009-07-30T12:46:00Z

Orange UK has launched a new free music streaming service aimed squarely at 16-24 year-olds today in a bid to capture a youth market hungry for free music. The new service - entitled 'Monkey' - is a JV between Universal Music Group, Orange UK, and Channel 4 and is the first free music package positioned entirely towards pay-as-you-go customers. The new deal will serve up thousands of songs from Universal artists, plus free competitions, news, gossip, exclusive access to artist content as well as providing the ability to share playlists via social networks. All of this will be free if users simply top up their phones with £10 credit.

"The free music element of the package fulfils an untapped market that is looking for a low-cost, easy access music service," states Orange. "Unlike some music services, which are either restricted to high-end more expensive handsets or have download costs, Monkey is for everyone," echoes Tom Alexander, CEO of Orange. Mark Mulligan of Forrester Research however takes slight issue with this highlighting how the 600 minutes a month restriction on Orange's new pay-as-you-go music service positions it as slightly less than free in reality. He argues that customers regularly paying £30 a month in phone credit are actually paying the equivalent of £2.14 per album.

So where do other brands fit in this new musical picture? Well, the service is also expected to tie-in with Oranges recently announced partnership with Blyk, the mobile marketing company, with Orange suggesting that Monkey will include "great offers from relevant brands". It’s plain to see the youth market wants free music, but do they want this to come with brands on board? The answer seems to be yes for a large percentage of the market. A recent KPMG Consumers and Convergence survey suggested that 40% of UK consumers are happy to watch mobile ads in exchange for free music. A figure backed up by an annual research survey from 3ple-Media, which stated that 41% of mobile subscribers are 'quite likely' to forward mobile ads in exchange for free access to music tracks. (Notably in these cash-strapped times this is up from 30% in last year’s survey)

What particularly interesting about the Blyk tie up is that Orange will serve advertising based on users preferences. How this works in practice in terms of what brands a Lady Gaga fan gets over a Razorlight fan is at present not entirely clear. However, the fact that music consumers want personalised advertising is. Around 48% of 18-45 year olds say they pay more attention if an online ad is relevant to them according to Lightspeed Research. One can assume this translates equally favourably across to mobile as well.

So can brands reach music consumers via mobile? Undoubtedly. Can they get the relevant cut through? Arguably yes if the ad content is personalised to user preferences. The main factor here is that advertisers need to see mobile as another touch point in a wider music related strategy. Around 51% of consumers say ads are highly effective if they “give me new information” according to a new Harris Poll. A non-related ad is going to get passed over, but one that drives the user into a deeper musical experience elsewhere is going to have the highest engagement factor. Mobile ads in this respect act as bookmarks to a deeper rooted music association in the minds of music consumers. Not so much music-on-the-go, more a music experience you can go to.

UK Brand investment in music totals £89M in 2008

2009-07-22T13:27:00Z

A new report from UK royalty collection society PRS for Music points to growth within the music sector despite the economic problems and continuing piracy issues - with the overall size of the UK music industry growing by 4.7% to be worth £3.6B in 2008. The report also highlights the need to create a balanced account of revenue across the full spectrum of the industry. As well as traditional label revenue, and the substantial live market, the wide reach derived from B2B revenues, such as licensing, advertising and sponsorship, increased by 10% to £925M during 2008, despite a slump in spending by major advertisers. You can download the full PRS report here.

Will Page, chief economist at PRS, emphasizes the importance of brand revenue to the overall picture. He highlights data provided by FRUKT - which outlines an £89M spend in music from brands - saying it "introduces us to a source of revenue which isn't new, but has arguably been omitted from much of the industry analysis to date". Advertising support (£24M) and live sponsorship (£23M) dominate, however there is a ground swell with regards to digital investment (up almost 20%) and brands being prepared to step away from the big names and events to embrace niche and emerging music. Jack Horner, Creative Director, FRUKT, says: "Brand investment in music is more innovative than ever before, with more consumer brands understanding that a long term view and clear definition of a role within music is critical to their acceptance and success. As brands move from the old approach of badging and towards developing content, music offers the opportunity to create truly engaging platforms. These investments in music are becoming a valuable revenue stream for the music industry, hence the openness with which all parties now approach collaborations and the increase in deals".

Brand investment: the numbers

•   Advertising support = £24M (27%)
•   Live music sponsorship = £23M (27%)
•   TV = £25M (28%)
•   Event creation = £8M (10%)
•   Digital = £5M (5%)
•   Artist endorsement = £3M (3%)

We’ll be looking at this area again in our upcoming FRUKT Music Intelligence Report 003. In the meantime it’s worth considering how ingrained endorsements have become in both the brand psyche and the bank accounts of major artists.

Beyonce was ranked 4th on Forbes Celebrity 100 earlier this month with fairly staggering earnings of $87M. The Beyonce brand has gone from strength to strength with revenue diversifying away from the more traditional roots of album sales. That's not to say she's not shifting plenty of albums, around $29M of her earnings came in from direct music sales. However, other revenue generators based around the Beyonce brand dwarf this. She netted $14M in a combination of concert ticket and merchandise sales, highlighting the importance of her new tour on forthcoming earnings. However, putting album sales and live revenue to one side, Beyonce has pulled in $15M from her fashion line (Dereon) - she has announced her intention to give away Dereon handbags and a pair of Dereon sunglasses via a text competition during her current tour - and a massive $20M from brand endorsements.

With a string of endorsement campaigns for Armani, Nintendo, L'Oreal and Trident gum under her belt, the figures here highlight just how much brands are financing music. The question however is whether brands are getting the required ROI by aligning with artists in this way? Simply badging a product with a celebrity, or having product touched by the hand of a major singer can often provide the midas touch for artists but not always for the brand. Many brands are now moving to deeper relationships with musicians that offer additional creative freedom for the acts involved and also provide more long-term investment opportunities for fans. Badging certainly has its place, but followed up with deeper long-term music investment it can offer a more lucrative reward for all parties - brand, band and fan - over time.

Music fans want a return on their festival investment

2009-07-14T16:08:00Z

The saturation of the music festival market – which reached its peak in 2007 – echoed the mounting problems that arose from the saturation of the sub prime mortgage market of the same period. With live music the lucrative end of the music industry - following the dramatic falling away of the CD market - everyone wanted a slice of the financially satisfying festival pie. But as seen in the mortgage business, short-term gain isn’t always as lucrative as it’s cut out to be. As a result this year started out with the festival sector facing an uncertain future and an entirely plausible festival recession. Would music fans ever don their wellies again? Would sponsors pull out on mass? Which festivals would find that their sub prime tent pitch was up for repossession?

The festival sector has undoubtedly seen some natural wastage as strapped for cash consumers become increasingly picky about where to spend their hard earned festival dollars. We conducted some research into the habits of festival goers this year in the UK - in partnership with Virtual Festivals - and over a third of music fans said they were cutting back on the amount of festivals they were attending this year – with around a quarter not attending at all. Having said that by far the biggest cut back is in overseas festival attendance, with 88% opting for festival ‘staycations’ as the recession makes even the most attractive line ups abroad financially unpalatable.

The knock on effect of the Credit Crunch clearly hasn't stopped music fans hitting festivals in their droves, as attendance at UK festivals so far testifies to. Surely it has hit brand involvement though? Not at all. In fact despite the feared slump, the opposite is actually happening. Brands are investing more in the live space according to a new IEG Sponsorship Report. The spend across North America will increase from the $1.084B injected into the sponsorship of music venues, festivals and tours in 2008, to $1.08B (a 3.8% rise). Notably, in a period where traditional music sales are severely diminished and a global recession is throttling the world's finances, this is the highest ever recorded sponsorship spend reported by IEG. "The fact that music sponsorship spending is holding its own in today's turbulent economy demonstrates the growing importance of music to corporate marketers," states Bill Chipps, senior editor at IEG. Another recent study (conducted by EMI) found that 67% of marketing executives are continuing to invest in live events as part of their branded entertainment strategies.

But what about the music fans, are brands getting their message through to them? A recent study highlighted in Marketing Week suggests they are. It pointed to the fact that 41% of music fans have positive feelings towards the brands that sponsor music festivals, with an equally sizable 40% showing positive feelings towards the brands that advertise at these events.

In our research alcohol brands were far and above the most recalled by music fans, which is good news for those brands that are securing lucrative pouring rights, but it does also highlight how much more can be done on the ground by others in order to ramp up that recall rate. Brands need to realise that simply badging an event isn’t a strategy in itself, and that hitting 50,000 eyeballs isn’t the same as reaching 25,000 hearts and minds. “Festivals are unique in offering a large market share of target audience in one place at one time but you’ve got to be communicating something relevant to the right people in the right way,” says Ziggy Gilsenan, MD Get Involved and Co-founder of Bestival/Camp Bestival. “Quality of audience over quantity is key if you want to achieve a deeper, more relevant dialogue with the consumer. Many brands still go for the shopping arcade approach of hitting events with big audiences but have no creative appeal to that audience – it all becomes a bit like Tescos in a green field, soulless,” says Gilesnan. “You cant just drop a shopping mall sampling exercise into a field of 50,000 festival goers and expect to have the same consumer reaction”

On the ground activations from a brand need a proper, considered focus, tailored to its intended market. Which means defining clear goals prior to the ‘big idea’, nurturing how it is communicated pre and post event, and understanding just what function and value you will ultimately be bringing to the fans experience of the event. "Consumer brands really need to think 'beyond-the-field' - just turning up at a couple of events with a bus and some deck chairs may be fun, but it's going to be tough justifying ROI on these light and 'idea-less' promotions when so many brands are building festival activity into a well considered year round programme," echoes Jack Horner, creative Director, FRUKT.

Experience is everything, give fans a return on their investment and it’s likely that brands will find themselves centre of mind with music fans as they recall the acts that were centre stage.

For more on brand activity at festivals see the FRUKT Music Intelligence Report 002.

Ad-funded music streaming heats up

2009-07-14T15:30:00Z

We7.com, the 4M track strong free streaming music service founded by Peter Gabriel, has announced that it has topped 2M monthly unique visitors. The news comes hot on the heels of its main competitor Spotify announcing its own 2M user landmark. However, this vast intake of users amounts to very little if advertisers don't get behind both services, something highlighted well by We7 CEO Steve Purdam in a recent interview where he suggested the focus of the site was to "Sell more adverts, get more music, get more audience". That is very much the priority order today, without advertisers on board survival is reliant purely on funding to ride out the downturn which is no doubt holding potential advertising back. With Spotify recently seeking a further £20M-£30M in investment, funding should keep the ad-funded ship afloat for a while longer. With few other bold options on the digital music deck, no one wants to see the ad-funded ship sink. The interesting part of We7's 2M milestone is that 50% of that figure comes from it's "play anywhere" strategy - where music is accessed via online media partners, including NME, the Guardian, the Sun and Daily Mirror. With added reach outside its site and users spending on average 30 minutes within the We7 site itself, the free consumer becomes a valuable customer for brands - but the question still remains as to whether brands can become key customers of these services and support them to a level that can sustain their business model long term?

Today Microsoft announced their intention to enter the space. ""Music is an important area for Microsoft," said MSN executive Peter Bale. "We are looking at launching a music-streaming service imminently." He went on to reveal the primary reason for the quick turnaround: "It will be a similar principle to Spotify but we are still examining how the business model will work." Microsoft's previous music service via MSN was pulled in 2006 after two years on the market and any new model may end up utilising technology from the company's acquisition of digital music service provider Musiwave. The new venture will be promoted through MSN and other parts of the Microsoft network as well as potentially though its Xbox gaming console - with a view to making the device an "entertainment hub" in users homes. The traffic that MSN brings and the existing relationships they have with brands and media agencies may well make them a major competitor to the existing players in this space.