The music and creative sectors are awash with data.
Labels, artists, event organisers and retailers are drowning in it, but little is being done to apply advanced analytics that reveal the insights needed to help engage with fans and drive sales. Creative businesses traditionally fuelled by the gut instincts of their workforces are now recognising that analytics are commercially critical, and that failure to embrace statistical information and analysis will put them at a significant competitive disadvantage.
John Wanamaker is supposedly famous for saying ‘I know I’m wasting half my advertising but I don’t know which half’. It is a quote that has lingered since marketing communications became the accepted way to generate demand for products and services.
However, in modern day marketing, this mantra simply need no longer hold true. Music buyers and fans leave a plethora of clues for artists and their business teams to discover in the data trail that they now leave behind them as they buy and consume music.
From Facebook likes to tweets whilst watching or streaming or listening to music; to buying tickets and merchandise; or sharing photos and videos taken with smart phones at gigs, data is now everywhere. It’s ready to be found, gathered and analysed for those in the music industry keen to look for new, smart ways to grow their income streams.
Analytics offers a real, potential cure for the hangover caused by file sharing which in turn has driven the music industry towards ever decreasing prices as the marginal cost of Internet distribution of music files is effectively zero.
Today, the music industry is getting much smarter about how it goes about generating revenues and what is increasingly becoming clear is that the use of analytics is a vital key to informing and developing an effective marketing strategy.
Hidden within the information collected about music fans is a wealth of opportunity to engage with them. By collecting the right elements of data it is possible to build up a picture of who they are, what they like, what they buy, what they listen to, what and how often.
The problem with data is that it is seen as a dull subject and even to experienced marketing practitioners, the opportunity that the collection and analysis of data offers is sometimes mystifying. Added to this, there is often the challenge of having too much data, often housed in different places and not knowing what to do next to produce results in terms of cash in the bank.
The prospect of attempting to tame the fire hose of data can appear more than a little daunting. And yet, with just a little mindful curiosity and practice, analytics can move centre stage in informing marketing strategy relatively quickly.
Capturing New Opportunities
The components of the value chain in today’s music industry are increasingly fragmented as the traditional players and ways of doing business are disrupted by new technologies and new players in the market place. This complexity masks some of the opportunities that the use of data and analytics could easily help uncover.
For example, marketing teams need to be thinking about the fan that buys a ticket for their favourite artist a year in advance but hears nothing from the ticket agency, the venue, the promoter, the artist’s management/record label or the artist themselves.
At each point in the fan’s journey from deciding to go to a gig, attending the concert and the period after the show, there are significant opportunities to engage, particularly with enthusiasts and super fans.
There is an opportunity to depend less on marketing to the mainstream. The economics of engaging fans using analytic approaches reduces the dependency on having to aim for the mass market.
Engaging with super fans
Yet, there are many points in the journey leading up to, during and after the gig to engage and make relevant offers. As Trent Reznor, Marillion and others have shown, focusing in to the core of the fan base and engaging with super fans can produce excellent financial results
Collaboration is now needed between the various parties in the music industries to make the data accessible for analysis.
Where To Begin?
There are generally two types of analytics that can be used to inform and sharpen marketing strategies.
The first is descriptive analytics which allows marketers to understand what happened in the past and / or who their audience profile is through audience insights. The second is predictive analytics which offers a way for marketing teams to remove much of the guesswork of traditional marketing techniques and allows scenario planning to assess the likely success of different offers made to different segments of music fans before executing the marketing campaign.
The latter is becoming increasingly important particularly where budget pressure requires marketing teams to do more with less.
Different music companies are at different stages of evolution in their journey to become proficient with analytics. The good news is that few have mastered these modern marketing methods and mastery begins with some simple steps. Very often, Marketing Executives are surprised that the short cut to success with analytics is to measure what isn’t working and simply to stop doing it.
The cost savings can then be refocused on doing smarter analytics that begins to close many of the opportunity gaps that are available.
Today’s reality is that smart use of analytics can help music companies justify every penny and cent invested in marketing campaigns by identifying who their fans are – at an individual level – and harnessing their passion for music by giving them exactly what they want.
As part of Henley’s Creative Dynamics series of events for middle and senior executives within the music and creative industries, Henley Business School is proud to present another unique event at their Greenlands Campus 9.30am on Friday 22nd November, at which a panel of seasoned experts will showcase cutting-edge thinking to answer these questions……
· What can you reasonably expect to gain by delving into data?
· What should you measure and when?
· What tools do you really need and why?
· What rewards are possible?
The following visionaries will be featured as speakers at tomorrows seminar:
Sir Richard Heygate Chairman and Keynote Speaker
Managing Partner of Oneida Associates, and a long-standing pioneer in applying advanced analytics technologies and techniques
Andrew Grill Partner at IBM (former CEO of KRED.com)
Anna Morrough Google, Entertainment & Media
David Orman Vice President of Kwame Corp
Colin Strong Managing Director of GfK – Media & Entertainment
Marie-Alicia Chang Co-founder of Semetric, Music Metrics
Guy Champniss Associate Professor of Marketing and Consumer Behaviour.
The event will be facilitated by Paul Crick, Analytics expert and consultant with IBM.
Price for the full day seminar with lunch included £245 + VAT Places are strictly limited; to reserve yours, or for more details about the event, visit: http://store.rdg.ac/HBS-MarketingWithByte
As with all issues of interest covered by the Creative Dynamics series, this topic has been brought about by Henley’s innovative work on the MBA for Music & Creative Industries programme – a world first, created for experienced business managers and future business leaders from all segments of the music & creative industries.
For further information on studying for an MBA in the Music & Creative Industries visit www.henley.ac.uk/mbamusic
Photo: Sean Keenan