SIMPLY THE BEST WAY TO CREATE AN EMOTIONAL CONNECTION WITH CONSUMERS

Music Marketing

The provenance of the music marketing project

Although we believe that developing meaningful partnerships with brands is a powerful way of creating this connection, we are aware that we haven’t always planned and executed these partnerships as well as we could.

To address this, we designed a project with the following aims:

– Discover how music is perceived as a marketing tool.

– Understand what music means to consumers.

– Define what makes good and effective music marketing for different parts of the market.

– Integrate the results into the tools and creative processes we use at Sony Music to connect artists with audiences through partnerships.

At Sony Music one of our biggest challenges has been to find new ways of connecting our artists with the widest possible audiences.

The Cone

At Sony Music we use a tool called the Cone to understand the UK music market.

Our knowledge and expertise around these groups allows us to understand which artists, brands and the type of music marketing activity that fits best with which of the four groups.

It splits up the UK population into 4 groups who have different degrees of passion and engagement with music.

Methodology

Interviews with industry experts to understand the marketing context and the past, present and future role of music in the marketing mix.

What

Who

When

22 paired depth interviews with consumers from across the Sony Music Cone representing the whole UK music market.

An in-depth nationally representative online survey of 1,018 adults 15+ to validate our insights.

Expert Interviews

Stage 1 Stage 2 Stage 3

September 2009

Qualitative Exploration

September 2009

Quantitative Validation

November 2009

A 3 Stage Methodology formed the basis of the Project

A new era of communications

“Music used to be used to set the scene in advertising, now it’s much more about creating engagement with consumers”

Connecting with consumers through their passions is the most powerful way to engage with them.

The communications model is fundamentally shifting. The push model of interrupting the lives of consumers to communicate with them has given way to the pull model of engaging and conversing with them.

Music Marketing exists at the heart of this change.

THEN

– CEO, Brand Entertainment Agency

NOW

INTERRUPTION BROADCASTING MASS MEDIA MESSAGING

ENGAGEMENT PARTICIPATIONCONVERSATIONSOCIAL MEDIA CONTENT

What do we mean by music marketing?

From priority ticketing, ambassadors, on-pack promotions and downloads, to sponsorship, content, product placement and live events

Any informed use of music by brands that helps attract, engage, influence and reward consumers.

1MUSIC IS THE UK’S NUMBER 1 PASSION.

INSIGHT:

INSIGHT 1 – Music is the UK’s number 1 passion

Hobbies and Interests that UK adults are “passionate about”“It’s different. With sports it’s something I enjoy. With music it’s something that I depend upon and rely upon it. It’s more of a need”

UK Consumers are more passionate about music than any other form of entertainment, interest or lifestyle pursuit.No other entertainment/interest/ lifestyle pursuit can evoke as wide a range of emotions as music. Most commonly used as mood enhancer, music selection often reflects mood but consumers can also use it to create a particular mood.

Music is also associated with some of the deepest emotions. It can trigger extreme joy or sadness, nostalgic reflections and lead to an almost spiritual connection between music and consumers.

39% of UK adults claim to be be “passionate” about music Enthusiast / Male / 31 / London

39% LISTENING TO MUSIC

32% READING BOOKS

28% SURFING THE INTERNET

25% TRAVELING

2MUSIC CAN BEONE OF THE MOST EFFECTIVE WAYS OF CONNECTING WITH AND ENGAGING CONSUMERS

INSIGHT:

INSIGHT 2 – Music can be one of the most effective ways of connecting with and engaging consumers

“I still think of it as Leeds Carling weekend. I’m a fan of Fosters and 4% Stella. But for some reason I took Carling to Leeds (even though it was no longer sponsored by them). It just felt right.”

Music is amongst the most persuasive marketing tools

For Fanatical music fans sponsorship of music artists or music events is the best marketing activity for feeling positive towards a brand.

Fanatic / Male / 22 / Manchester

Consumers see it as being great at: 1. Providing information about a brand. 2. Feeling positive towards a brand.3. Increasing likelihood of purchase. 4. Increasing likelihood to talk about a brand

Impact of Marketing Activity

TV advertisements

Impartial reviews from other consumers, experts or journalists

Sponsorship of music artists or music events

Sponsorship of your favourite TV shows

Information provided on a company’s own web site

Newspaper advertisements

Advertisements you see in stores when you are out shopping

Sponsorship of sports teams or sports events

Poster advertisements you see whilst out & about

Radio advertisements

45.7%

41.0%

30.9%

27.8%

27.0%

24.2%

24.1%

23.5%

23.0%

23.0%

3WHEN USED TACTICALLY, MUSIC IS A POWERFUL SALES DRIVER AND CUSTOMER RETENTION TOOL

INSIGHT:

INSIGHT 3 – When used tactically, music is a powerful sales driver and customer retention tool

“That you get something back. It’s not just us buying things to make them richer. You know we’re the ones that are keeping them going so they should keep us happy.”

Music based offers and promotions are seen as valuable and unique in the eyes of consumers and are likely to elicit a high response from them.

Loyalty SchemeFreebies and GiveawaysClassic Albums

Music in AdvertisingMusic for CharityCompetitions

59%58%55%

54%54%48%

Free Mobile Ringtones

Free Video Games

Free Music Downloads

Free MerchandiseCompetitions

Free Concert Tickets

Free Music CDs

Free DVDs

Traditional / Female / 43 / London

Kinds of music marketing consumers would like to see between brands and their favorite artists

Based on question: Please can you select the offers and promotions that would be most valuable and unique to you/you would be most likely to respond to? Axis based on top 2 box scores, money off / BOGOF excluded from chart.

Low valueHigh response

High valueHigh response

High valueLow response

Likely to respond

Promotional Value Map

0%

0%

40%

30%

Valuable & unique

Low valueLow response

4WHEN USED STRATEGICALLY MUSIC MARKETING CAN SERVE A WIDE RANGE OF LONG TERM OBJECTIVES

INSIGHT:

INSIGHT 4 – When used strategically music marketing can serve a wide range of long term objectives

From awareness, to understanding, consideration and loyalty music has the ability to drive a full range of marketing needs.

Awareness SponsorshipMasterCard sponsorship of the Brit Awards

Understanding

PromotionsExchange points from products for music rewards

Trial

Content Branded free form radio without playlists

Loyalty / advocacy Priority AccessChance to earn money can’t buy tickets in exchange for working on community projects

BRAND OBJECTIVE

TYPE OF MM ACTIVITY EXAMPLE

5DESPITE ITS POTENTIAL, MUSIC IS RELATIVELY UNDER-EXPLOITED BY BRANDS

INSIGHT:

INSIGHT 5 – Despite its potential, music is relatively under-exploited by brands

Musicmakes upjust 0.5%of total marketing expenditure

Current expenditure and awareness of music marketing bears no resemblance to consumer passion and makes music a significant untapped commercial opportunity.

Q: “What examples can you give of brands getting involved in music?”

A: “I don’t know I suppose Apple and iTunes.. That’s the only one I can think of”

% OF BUDGETS SPENT ON PROMOTIONS

Online

Newspaper Magazine

Outdoor Radio Cinema

2008 Advertising Association Yearbook.

TV

Positive Effect on Brand Perception

Music marketing 3rd most effective activity amongst those aware of it, but only 11th amongst those who aren’t aware.

Enthusiast / Female / 34 / Birmingham

6CONSUMERS WELCOME BRAND INVOLVEMENT IN MUSIC

INSIGHT:

INSIGHT 6 – Consumers welcome brand involvement in music

Far from being seen as being a sell out - brand involvement in music is seen as supporting the industry.

“I like that because it gives them money to explore in the video. They have the money to do what they want to do. Hopefully the brand and the music come together”

On a brand giving money to an artist to make a music video

Casual / Male / 21 / Manchester

Across all audience segments music based campaigns were given high approval ratings - but the devil is in the detail for some specific segments.

Only 8% of consumers strongly agree that artists linking up with brands is a “sign of selling out”. Even for Fanatics, this figure is only 15%.

72%62%

72%58%

o2

Brits / Mastercard

ASDA

ORANGE

approval by Enthusiastsapproval by Fanatics

approval by Traditionals

approval by Casuals

7SEGMENTATION IS THE KEY TO GETTING IT RIGHT

INSIGHT:

INSIGHT 7 – Segmentation is the key to getting it right

It’s important that music marketing activity satisfies the differing needs of music consumers.

“It does help with the promotion of it. But sometimes there’s just no relevance to it. It’s like the name is just there and no one really pays any attention to it. It’s all to do with money isn’t it. They don’t really care about music itself.” Casual / Male / 17 / London

FANATICS AND ENTHUSIASTS

Cool, Clever & Cutting Edge

Indulge Me with Nostalgia

Fun Accessible & Simple

Respect the Tradition

Enjoy high levels of effort & involvement. The more exclusive the better.

Not actively involved & see music as often ‘not for them’ but musical memories are hugely evocative and

are the key to engagement

Less precious of music and artists, they will engage in fun activity that requires

minimal effort and involvement

Most likely to interact with activity that demonstrates respect for artists, is subtle in it’s brand involvement and maintains

an authentic brand/artist relationship

YOUNGER

OLDER

CASUALS AND TRADITIONALS

INSIGHT 7 – Segmentation is the key to getting it right

TYPE OF MARKETING CASUALS AND TRADITIONALS

Generally more accepting of overt brand involvement

Protectiveness of music means respect is generated by subtle involvement Subtly of Brand Involvement

Prefer low involvement activity - free deals and quick wins

Passion for music means they are more likely to put effort into activity Effort Required from Consumer

Appreciate innovation but comfortable with traditional approaches

Most respect brands that are innovative and cutting edge in their strategies Innovative Approaches

Entertainment factor is more importantBrands must show a real

understanding of music to earn respectAuthenticity of Brand’s

Music Credentials

The brand can ‘open up’ consumers to music. The music is still king but the brand can be the hero

The music often ‘opens up’ the brand if it gets the strategy right.

Music is always King!Role of the Brand

Should focus on mainstream and popular artists and nostalgia.

Must reflect more niche/underground tastes in music Type of Artist

FANATICS AND ENTHUSIASTS

8THERE ARE SOME UNIVERSAL PRINCIPLES OF MUSIC MARKETING THAT ARE TRUE ACROSS ALL SEGMENTS

INSIGHT:

INSIGHT 8 – There are some universal principles of music marketing that are true across all segments

Cutting edge or mass market music marketing is expected to entertain, Traditionals are happy with a bit of fun.Whist annoying ads can sometimes work, the same leeway isn’t afforded to music marketing.

And an ethical angle is motivating across segments.

Based on question 23/24: ‘Based on what you have seen of music marketing, how would you describe the kind of music marketing that works really well/doesn’t work well at all.

FANATIC

TOPCHARACTERISTICS

Entertaining Entertaining Entertaining EntertainingCreative Fun Original Fun

Cringe Worthy Annoying Tacky AnnoyingAnnoying Cringe Worth Cringe Worthy Cringe Worthy

WORSTCHARACTERISTICS

ENTHUSIAST CASUAL TRADITIONAL

9WE KNOW WHERE TO FIND YOUR CUSTOMERS

INSIGHT:

15–21

21–24

25–29

30–34

35–39

40–44

45–49

55+

ALL MALE GROUP ALL FEMALE GROUP MIXED GENDER NOT ENOUGH PEOPLE TO SEGMENT

ALL INDIVIDUALS...TOGETHER THE INBETWEENERS

L.O.L(LIVING ONLINE)

FOOTIE &PLAYSTATION POP IDOLS

WEEKENDWARRIORS W.A.G.S

ROCK & ROLLFOOTBALL(YOUNGER)

GREAT FEELINGS,GREAT MEMORIES

(YOUNGER)

GRUMPYBLOKES

X FACTORMUMS

EASY LIKE SUNDAY MORNING

ROCK & ROLLFOOTBALL(OLDER)

GREAT FEELINGS,GREAT MEMORIES

(OLDER)

TIPPING POINTERS

WHITE COLLARRADICALS

COOL CAREERGIRLS

TELL MEWHAT’S GOOD

(YOUNGER)

DOMESTICGODDESSES(YOUNGER)

TELL MEWHAT’S GOOD

(OLDER)

DOMESTICGODDESSES

(OLDER)

THETRENDANISTAS

LIVING IT LIVE I’M WITH THE DJ

KEEPING THEDREAM ALIVE

MUSIC WAS MYFIRST LOVE

THE CURATORS

YOUNGSTARZ

SONY MUSIC'S CONSUMER SEGMENTS IN THE UK

FANATICSPOPULATION SIZE = 5M

12% OF TOTAL POPULATION31% OF TOTAL MUSIC SPEND

POPULATION SIZE = 11M 25% OF TOTAL POPULATION32% OF TOTAL MUSIC SPEND

POPULATION SIZE = 12M 28% OF TOTAL POPULATION24% OF TOTAL MUSIC SPEND

POPULATION SIZE = 16M 35% OF TOTAL POPULATION14% OF TOTAL MUSIC SPEND

ENTHUSIASTS CASUALS TRADITIONALS

CONCER

T TIC

KETS

INSIGHT 9 – We know where to find your customers

At Sony Music we can use our proprietary segmentation data to match segments with categories and brands

To find out more please visit...

Product Purchasing and Brand Usage “Brand X is a brand for me…”

FILM

S / D

VD

CARS

MAG

S & PA

PERS

VIDEO

GAM

ES

TRANSP

ORT

SHO

RT BREA

KS

COSM

ETIC

S

ALCO

HOL

SOFT

DRIN

KS

FASH

ION &

CLO

THIN

G

HOUSE

HOLD

GO

ODS

CHARITY

CREDIT

CARDS

UTILITI

ES

FMCG

MUSIC WAS MY

FIRST LOVE

COOL CAREER

GIRLS

DOMESTIC GODDESSES(YOUNGER)

10MUSIC MARKETING DELIVERS BETTER ROI

INSIGHT:

Primary segmentWhite Collar Radicals | Age: 25-34 | Gender: 100% MaleCategory: Enthusiast | Number in population: 1,214,000

Secondary segmentRock & Roll Football | Age: 30+ | Gender: 100% Male Category: Casual | Number in population: 4,660,000

Key Insights – Love football, gaming , gadgets & notice unconventional advertising.

Kasabian DNA

“Fanfare for the common man”

INSIGHT 10 – Music marketing delivers better ROI

Example: Kasabian and Umbro campaignStart with the artist DNA to understand the artist and their audience.

INSIGHT 10 – Music marketing delivers better ROI

The Campaign – The creation of bespoke creative that engages the audience

THE RESULTS

YouTube views in the first 8 weeks –Main film: 820,000 viewsMaking of: 40,000 views

Estimated Media Value – £500,000+ of UK TV value. Plus significant editorial exposure in influential titles such as Wired, Engadget, Gizmodo, Nuts Magazine and Guardian Unlmited.

13-1718-2425-3435-4445-5455-6465+

0% 40%10% 50% 80%20% 60% 90%30% 70% 100%

Female 16%

Male 84%

Age ranges for both genders Genders for all age groups

In Summary

There’s no better partner than Sony Music.

The Company – direct access to artists.

The Team – Delivering expertise, professional service and ease.

The Insight – available to partners to understand and optimise their music for their customers.