There is a complex push and pull dynamic happening with digital and brands.
On the one hand, digital is allowing younger consumers to become invisible; on the other hand, the push for more content means smaller acts are getting a (slightly) fairer crack of the whip; while digital music is also opening up emerging markets as it is no longer a luxury product accessible only by the elite.
In this ebb and flow of opportunity and threat, we speak to those trying to make music and branding work better digitally about what they are doing and why they are doing it.
There is something bitterly ironic that the generation most open to brands working with music – namely millennials and post-millennials – are the ones most alienated from it all via technology.
Ad-blocking software and a retreat into the ‘dark social’ (mainly messaging apps) rather than more “open” platforms like Twitter and Facebook are steadily defining these consumers’ behaviour and making it almost impossible to segment and measure impact – the two things brands and music have become obsessed with in the past decade as social media pumps out huge plumes of data for them to capture and dissect.
On the flip side of this, however, is the fact that digital is lowering the barrier to entry for not just emerging acts but also audiences in emerging markets. What digital and branding takes away with one hand, it is giving with the other.
Music Ally spoke to labels, digital platforms and brand agencies about what they see as the defining trends and challenges facing them as we race towards 2017.
Data, insight and the moving target of segmentation
Data around customers was something that, in the analogue world, retailers owned and labels (and managers) had no access to. They could, of course, conduct their own consumer insight (see: inlay cards in CDs), but this was slow, costly and restricted.
Downloading, streaming and social media has turned a drip of consumer data into an ocean. That was, for a period, a godsend; but the way consumers now behave online – or, to be more specific, the way they can be tracked online – has changed enormously and made things more complicated rather than more straightforward.
“Brands are looking for much more data,” says Alfonso Perez-Soto, SVP of business development for Latin America, Spain and emerging markets at Warner Music. “Brands in general are looking to better understand what the profile of our artists are and what they do. We are working very hard to make our artists attractive [to brands] and properly profile them to awaken the interest of the brands.”
In the old days, matching a brand and an artist was often done in a nebulous way – based on ‘gut instinct’ and a ‘feel’ for what was right. Today there is a more complex process of due diligence happening, where brands identify the audience they want to reach and labels have to present detailed audience and market research around the acts that will connect best with that audience.
“When we do our presentations and discuss with agencies, we are looking a lot at the profiles and the targets – and trying to understand brand interest,” says Perez-Soto. “They are looking for performance [indicators] and different interests that we try to accommodate, considering the data that we get and that we can present to them.”
He adds, “We have a team that traffics campaigns. When we select the format and the targeting, we advise the brands on how this could work better for them and help them accomplish their objectives. When we sit down with a brand, firstly we have to know what they want. We have to understand how we can help them. That comes from properly managing a lot of data that we get from our different dashboards.”
Chris Gorell Barnes, the founder and CEO of content agency Adjust Your Set, suggests that a company like Shazam is an ideal bridging partner between brands and labels/musicians as it not only offers consumer insight but also becomes a post-event marketing partner in and of itself.
His agency worked with Shazam during the Bacardi Triangle event in 2014 where Calvin Harris, Kendrick Lamar and Ellie Goulding played a mini festival in Puerto Rico. Shazam, he says, was ideal for measuring the brand fit.
“That is one of the things I think Shazam does so brilliantly,” he proposes. “They know the audience so well and they know what they are interested in. They know what things they like. They know the demographic. They can then sell that data back to brands who want to reach those audiences.”
After the event, Shazam was used to link back content created at the event to Shazam users who had tagged music by the acts performing, creating a neat feedback loop.
This is all, however, something of a moving target, but the accessibility and expansion of real-time data is increasingly important here. “That enables you to be much more intelligent with your media spend, knowing which channels are working better and how you can turn off the ones that aren’t working so well and reach the ones that are,” argues Gorell Barnes.
That should mean a hermetically sealed world of perfection for music and brands using digital as the core of what they are doing, but younger consumers have moved out of the social media spotlight glare. Finding them and communicating with them is increasingly like finding a needle in a haystack in a windowless room with the lights off.
Possibly the most inelegant marketing term of recent years, the idea of the ‘dark social’, where younger consumers are basing their social media activities on closed platforms such as WhatsApp and Snapchat, could prove marketing and branding’s biggest challenge in decades. They know where young consumers are, but they don’t know what they are doing there or how to properly reach them.
“There is a certain amount of the unknown in there,” says Daniel Cross, CEO of Record-Play Music Consultancy who work with adidas and Google among others, of this social trend. “There is a sense of the unknown where brands who have taken conventional placements in media in conventional positions are looking to this as a threat, possibly.”
This, he feels, is not necessarily a bad thing – if brands and labels/artists start to think about it carefully. “It also drives creativity,” he suggests. “It creates a hotbed for the aspirational concept. There is the idea that if they can make something that is so good it gets shared on the dark socials, that is proof of success.”
For Gorell Barnes, it should mark a significant change in thinking and strategy if everyone here is to turn it to their advantage.
“It becomes harder and harder to reach audiences,” he says. “This is why brands need to stop interrupting what people are interested in and they need to be what people are interested in. That’s why there is the massive opportunity of brands partnering with music artists and the music industry as that is content that people seek out and want to watch, listen to and share.”
He adds, “It is so much harder now to find audiences through traditional advertising. There has been a huge shift in the industry where brands are really focusing on content marketing and creating content that is useful, relevant and entertaining so audiences want to seek it out. It needs to be culturally relevant.”
This idea of the increasingly ‘invisible’ audience is something that Spotify, for example, is keen to address and resolve. Adjust Your Set has been working with the streaming service to help it find those younger consumers who don’t engage with traditional media and whose online behaviour is very different to how those who are even a few years older conduct themselves digitally.
“What we have done is help Spotify reach niche audiences through native advertising,” says Gorell Barnes. “It was hard-to-reach audiences like 24 year olds who spend all their time on mobile and don’t watch traditional channels. They use ad blockers and so are very hard to reach. We used a native platform that Adjust Your Set has developed and created and we came up with themes around promoting Spotify’s new running app. We then distributed engaging content into select publishers and we had great results compared to traditional advertising. There was much higher engagement.”
It is probably the most misused, overused and tarnished term in marketing – the idea of “organic” content. The great cliché of marketing in 2016, certainly if you go to any branding conference, is all about using “organic content” to “tell stories”.
But really, at its best it is about making something original and owning it. It is also going to become increasingly important as ad-blocking software allows users to strip the ads from around what they see online.
“Ad-blockers will continue to be an issue for publishers and advertisers,” says Gorell Barnes. “There will be more and more focus on how we create stuff that people want with brands finding the right cultural fit for them so they can then create content that people are interested in.”
Creating content that people are interested in is increasingly about staging something unique – something that wouldn’t have otherwise happened. That is obviously going to cost time and money, but the thinking here is that this level of investment is worth it compared to throwing cash at online advertising and hoping some of it, somewhere and somehow, will stick.
“There seems to be a real move away from stamping a logo on a brand ambassador,” suggests Cross. “People have got wise to that. It’s so easy for the brand to go down that route; but what is more interesting is providing access to interesting content that wouldn’t otherwise be available. So Brand A collaborates with Media Partner B and Artist C to create something new and interesting that wouldn’t exist otherwise.”
Bacardi Triangle is an obvious example of that thinking in action. “What we did at that event, which I think was quite clever, was to enable every single participant to be their own camera crew,” explains Gorell Barnes. “We built a specific app and gave everyone who went there instructions on how to create a film and then everybody played a role in creating that film that captured the event. That film was then uploaded onto all the social channels of the people there as well as the Bacardi channels.”
Within that, of course, the brands will want to have ownership not just of the assets they created but also the very concept itself.
“If BalconyTV was invented by a creative ad agency for a brand, it would have been perfect,” says Stephen O’Regan, BalconyTV’s co-founder. “The problem is that it wasn’t. It was invented by people in my apartment with a hangover. We didn’t really think it out at all. Brands want ownership of the concepts they have. Look at the Red Bull Sessions or Heineken Green Energy. These things were not created beforehand and then turned into the Red Bull Sessions. They were always the Red Bull Sessions.”
Equity is the new advance for the 1%…
Like so many things in modern society, Justin Bieber is to blame.
Under the guidance of manager Scooter Braun, the singer began taking equity in new digital services several years ago, the idea being that he could deliver them huge audiences and accelerate their move to scale. Deals include Tinychat, Stamped, Sojo Studios and even Spotify.
This is defining how a lot of deals are done now for pop stars and other influencers with large social media followings.
“A lot of these startups are looking to collaborate with celebrities, artists and influencers who have a big reach already,” says Cross. “Instead of handing over a lot of cash, they are handing over equity.”
He adds, “What we are seeing is these artists are drawing their fans onto these sites and giving momentum to these platforms. The brand part is such an instrumental aspect of the revenue model for these platforms.”
Of course, few of these deals will be made public, but they are proving to be the new reality when acts are looking to add their social weight to things. A hefty fee and some free trainers is no longer enough for pop’s 1%.
…but digital means that brand deals are opening up to emerging markets and emerging artists
This could prove the most significant development in digital and branding. It is no longer about the elite (a handful of mega-acts from the US and the UK) sponging up most of the money. While not totally egalitarian, things are slowly moving away from a tiny power base and giving new acts more of a shot (and more of the total revenue) as well as seeing digital open up emerging markets in a way that was inconceivable two decades ago.
First the new acts.
“We are seeing a huge uplift in the amount of content that is being produced,” says Cross. “That, in itself, is driving down – on the whole – the rates for the licensing of music for those projects. We are still getting the big projects that have the big budgets, but we are getting a lot of requests for music that is coming in at a lower rate. On the one hand, this is an issue for the more traditional music side; but for the emerging and self-representing music sector, this is a massive growth area.”
He continues, “Those [sync] deals for £200,000 are still there and still happening – but they are fewer and further between. For those at £5,000-£10,000, there are a lot of requests. We can take that to small artists who run their own publishing, via their management, and that’s fantastic. That can sustain their career and they can continue creating, producing and collaborating. We are finding it much easier to liaise with artists.”
With more brands wanting to do more things across more platforms and with more music, the net effect is that more artists are now being considered for deals that would previously have only been earmarked for already successful ones. It is not quite a Marxist redistribution of wealth across the entire food chain, but it’s a start.
Concurrently, digital is opening up emerging markets like never before, lowering the barriers to entry and making music – and the brands who want to slipstream it – more accessible.
“Digital is growing and is the bit that is making a difference – considering how the world was before,” says Perez-Soto of the markets he has seen open up in recent years. “Music used to be a luxury product and a CD cost $16 or $20; but it was only accessible by a certain number of people in countries with high GDP per capita – mainly the developed markets. Now music is [highly] accessible and smartphone penetration is growing.”
He adds, “Networks and data costs [in emerging markets] are catching up with Western Europe. There is a huge young population that is eager to embrace technology and access content that way. The strength of these markets comes from that. The market is going to be much bigger.”
For Cross, this all means a shift away from broad brushstroke marketing with a Western audience in mind to one where digital allows (and encourages) greater localisation of content and messaging.
“We have global brands that want to be relevant in locations outside of their main areas,” he says. “They might not have offices in those areas, but they want to know who the movers and shakers in those territories are. We are seeing a move towards understanding local cultural nuances.”
To this end, Record-Play has set up Music Map to deal with all of this and has reps in 15 different countries around the world who deliver insights into music trends, new genres and new production styles, allowing clients to reach into local scenes.
“It gives the brands a feeling of being more closely associated with local scenes and local audiences,” he says.
Such expansion is increasing the reachable and addressable audience at an exponential rate – and will define the coming years.
“More users means more opportunities to develop our business and to capture for our industry an opportunity with brands when previously it used to be only traditional media that large numbers of people were accessing,” says Perez-Soto.
“People are moving into digital and music is a really important source of traffic here. With that comes the strength of our position to discuss and support better businesses with brands. Our base is much bigger.”