Why bands need brands
16-Apr-08
With the music industry locked in flux as its business model erodes as a result of the rise of digital media, brands are getting into bands as never before, and creating a new kind of “record company”.
It is a situation that has led to the creation of companies such as Harvest Entertainment, which act as a conduit between brand and band. Harvest has signed up Placebo, McFly and 1980s band Madness as its clients. Its job now is to find an appropriate brand to fund and support the activities of each group, which will be able to retain complete ownership of their copyright.
Harvest, which launched at the end of last year, is run by Ric Salmon, a former vice-president of Warner Music International. He of all people knows how much the music industry has been transformed since the days when record labels held a monopoly. Thanks to the Web, barriers to entry have broken down to the detriment of the traditional record label model. Significantly, established artists are no longer making the bulk of their revenue from record sales. In the UK last year, album sales dropped nearly 11%, according to British Phonographic Industry figures. So musicians and their backers are now turning to more lucrative revenue streams such as touring and merchandising.
While some are choosing to go independent, others are opting for the venture capitalist investment model. Record labels themselves are also launching spin-off labels in partnership with brands.
Last week Procter & Gamble and Island Def Jam Music Group announced they would launch a music company called TAG Records, named after P&G’s TAG men’s deodorant and body spray. Even former Beatle, Paul McCartney, has got in on the act, last year teaming up with coffee shop chain, Starbucks, through its new Hear Music record label.
Groove Armada, which recently came out of a five-year deal with Sony BMG’s Jive Records, has chosen Bacardi-Martini. The British dance-music duo signed a one-year deal with Bacardi in March which will see the brand fund a four-track EP. As part of the deal the duo will also perform at Bacardi-branded events and present radio programmes created to air on various radio stations.
Groove Armada will also appear in Bacardi’s advertising campaigns. Bacardi global experiential manager Sarah Tinsley says the duo will write a song for the drinks brand’s TV commercial, working closely with Bacardi’s advertising agency RKCR/Y&R.
He says: “I don’t think Prince’s fans were disappointed when they got his music free if they bought a copy of The Mail on Sunday. I don’t think Radiohead’s fans were cynical when the band allowed them to pay however much they wanted to for their album. It was a brilliant marketing ploy and it worked, because it went straight to number one in the US and UK.”
Other pitfalls include what happens to a brand if its musical partner finds itself making headlines for all the wrong reasons. As Tinsley says, any scenario which involves using a third party as a brand ambassador always carries a risk. The point is to go through the necessary processes to make sure that risk is minimised.
Salmon suggests that some brands see the value of being associated with controversial characters like Peter Doherty. “Who would have thought that Lily Allen would become the sensible, mainstream artist she is now. In that way, some brands may like that journey and risk,” he adds.
But while tie-ups between bands and brands is nothing new, this brave new world of brands acting like record labels is still largely uncharted territory. And with the likes of Harvest negotiating these deals, a new kind of service company is also emerging and forming part of this new model.
Whether or not this will become a viable business model in music’s brave new world is something not even the “experts” can second-guess. But there is no question that the relationship between brands, bands and the music industry will continue to grow.
Friday, 18 April 2008
Insurance Related Issues
User engagement must be measured
by Marc Nohr Marketing Direct 01-Apr-08
Marc Nohr gives his opinions on social networking
Speaking on the radio recently, Ben Elton argued that social networking sites signal "the end of privacy". Along with reality TV, they represent a confessional tendency, a desire on the part of the Facebook generation to reveal all. Only when he said it, it sounded funnier.
To the DM fraternity, this phenomenon is a major opportunity. We don't need to devise elaborate strategies for eliciting information about consumers if they're willingly giving it. Neither do we need to find ingenious ways of targeting consumers if they're identifying themselves to us. Or do we?
In a recent posting, a blogger shared the results of a test he had conducted which pitted the direct response credentials of Facebook against Google. He devised a Facebook ad, set the targeting parameters and tested it against a Google ad with similar content. I'm sure you can guess the outcome. The cost per response on Google was 25 per cent lower than Facebook. The conversion rate was 100 per cent better. No surprises there. People seeking a product on Google are further down the purchase funnel than those on Facebook, so are likely to be cheaper to recruit.
You could argue he missed the point - since Google searches clearly signal intent to purchase, while that's not how people use Facebook. The sites are different. So if Google is direct response nirvana, does that mean we should give up on social networks from a response perspective?
Yes and no. Yes, if we are expecting social networks to generate the same kind of leads as search. But as punters are at different points of the purchase funnel, it may mean using social networks not to close the sale, but to open it, to encourage dialogue (or polylogues) between customers and promote advocacy. Which in turn poses two new challenges. First, how to generate the kind of content that will encourage this behaviour, if it is not a wham-bam-thank-you-ma'm banner. And second, to develop the kind of metrics that will allow us to track how effectively (including cost-effectively) we open conversations and deepen engagement.
Microsoft's new Engagement tool is one such attempt, and hopefully timely, too. A recent JupiterResearch report said that 75 per cent of clients simply aren't assessing the effectiveness of their efforts to stimulate user interaction. It's time for us to change that for a start. If it matters, let's measure it.
by Marc Nohr Marketing Direct 01-Apr-08
Marc Nohr gives his opinions on social networking
Speaking on the radio recently, Ben Elton argued that social networking sites signal "the end of privacy". Along with reality TV, they represent a confessional tendency, a desire on the part of the Facebook generation to reveal all. Only when he said it, it sounded funnier.
To the DM fraternity, this phenomenon is a major opportunity. We don't need to devise elaborate strategies for eliciting information about consumers if they're willingly giving it. Neither do we need to find ingenious ways of targeting consumers if they're identifying themselves to us. Or do we?
In a recent posting, a blogger shared the results of a test he had conducted which pitted the direct response credentials of Facebook against Google. He devised a Facebook ad, set the targeting parameters and tested it against a Google ad with similar content. I'm sure you can guess the outcome. The cost per response on Google was 25 per cent lower than Facebook. The conversion rate was 100 per cent better. No surprises there. People seeking a product on Google are further down the purchase funnel than those on Facebook, so are likely to be cheaper to recruit.
You could argue he missed the point - since Google searches clearly signal intent to purchase, while that's not how people use Facebook. The sites are different. So if Google is direct response nirvana, does that mean we should give up on social networks from a response perspective?
Yes and no. Yes, if we are expecting social networks to generate the same kind of leads as search. But as punters are at different points of the purchase funnel, it may mean using social networks not to close the sale, but to open it, to encourage dialogue (or polylogues) between customers and promote advocacy. Which in turn poses two new challenges. First, how to generate the kind of content that will encourage this behaviour, if it is not a wham-bam-thank-you-ma'm banner. And second, to develop the kind of metrics that will allow us to track how effectively (including cost-effectively) we open conversations and deepen engagement.
Microsoft's new Engagement tool is one such attempt, and hopefully timely, too. A recent JupiterResearch report said that 75 per cent of clients simply aren't assessing the effectiveness of their efforts to stimulate user interaction. It's time for us to change that for a start. If it matters, let's measure it.
Competitors
Home & Legacy seeks growth to match rivals
Issue 17-04-2008
By Michael Faulkner
High net worth insurer in drive to compete with larger rivals
Home & Legacy managing director Barry O’Neill has insisted the business can compete with high net worth (HNW) giants like Hiscox and Chubb, but admitted that it has perception issues which need to be addressed.
O’Neill, who joined the high net worth specialist last September, also said that the company was set to launch its first motor product towards the end of the year.
A mid-net worth home insurance product, underwritten by NIG, is also due to be launched.
Allianz Insurance acquired high net worth home specialist Home & Legacy in 2006. At the time it said it was looking to triple its size to around £100m gross written premium through the launch of new products.
O’Neill said: “We are a true high net worth player [competing] with the likes of Chubb, Hiscox and AIG. But we have perception issues in some areas.”
He added that the company’s acquisition by Allianz was a seminal moment for the business. “It was critical for it to move forward,” he said.
Developing the company’s capabilities, including its technology, was vital. “We need consistently good services and products,” he added.
Home & Legacy is currently migrating to Acturis technology, which will provide the springboard for the business’s growth.
The company launched its first new product, for let properties, earlier this year. Six more products are planned for launch during the year. This will include the company’s first motor product, slated for launch in the fourth quarter, and the mid net worth home product.
O’Neill said: “The motor product has been on the cards for a while. It is a major development for us.” Last month, Allianz Insurance reported that Home & Legacy had failed to hit target in 2007. Allianz Insurance chief executive Andrew Torrance said at the time that Home & Legacy’s targets had been aggressive.
O’Neill said: “We would have liked more growth in 2007. It was mainly about getting the fundamentals right. The messages to brokers didn’t get through. The growth today has been about core product sales.”
He said that the past 18 months had seen relatively flat growth, but this had improved.
“The signs have been extremely encouraging. March 2008 has been the best month for new sales since the acquisition.
“Brokers who previously went with Chubb and Hiscox are coming to us,” he added.
Issue 17-04-2008
By Michael Faulkner
High net worth insurer in drive to compete with larger rivals
Home & Legacy managing director Barry O’Neill has insisted the business can compete with high net worth (HNW) giants like Hiscox and Chubb, but admitted that it has perception issues which need to be addressed.
O’Neill, who joined the high net worth specialist last September, also said that the company was set to launch its first motor product towards the end of the year.
A mid-net worth home insurance product, underwritten by NIG, is also due to be launched.
Allianz Insurance acquired high net worth home specialist Home & Legacy in 2006. At the time it said it was looking to triple its size to around £100m gross written premium through the launch of new products.
O’Neill said: “We are a true high net worth player [competing] with the likes of Chubb, Hiscox and AIG. But we have perception issues in some areas.”
He added that the company’s acquisition by Allianz was a seminal moment for the business. “It was critical for it to move forward,” he said.
Developing the company’s capabilities, including its technology, was vital. “We need consistently good services and products,” he added.
Home & Legacy is currently migrating to Acturis technology, which will provide the springboard for the business’s growth.
The company launched its first new product, for let properties, earlier this year. Six more products are planned for launch during the year. This will include the company’s first motor product, slated for launch in the fourth quarter, and the mid net worth home product.
O’Neill said: “The motor product has been on the cards for a while. It is a major development for us.” Last month, Allianz Insurance reported that Home & Legacy had failed to hit target in 2007. Allianz Insurance chief executive Andrew Torrance said at the time that Home & Legacy’s targets had been aggressive.
O’Neill said: “We would have liked more growth in 2007. It was mainly about getting the fundamentals right. The messages to brokers didn’t get through. The growth today has been about core product sales.”
He said that the past 18 months had seen relatively flat growth, but this had improved.
“The signs have been extremely encouraging. March 2008 has been the best month for new sales since the acquisition.
“Brokers who previously went with Chubb and Hiscox are coming to us,” he added.
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