Sandbox MUSIC MARKETING FOR THE DIGITAL ERA Issue 87 | 19th June 2013 Ad rock: making digital ads work INSIDE… Campaigns Digital is eating traditional PAGE 6: advertising’s dinner while The latest projects from the claiming to be more effective digital marketing arena >> and measurable. Banner ads, Campaign Focus pop-ups and rollovers might PAGE 7: be the most obvious (and J. Cole – Born Sinner >> annoying) forms of digital Tools advertising, but social is PAGE 8: also changing things. Search Ticketmaster LiveAnalytics ads currently dominate, but >> YouTube is proving highly Behind the Campaign effective for music and mobile PAGES 9 - 11: is set to blow everything apart Disclosure >> again. As music business ad Charts spend migrates online, what PAGE 12: is working best and where do labels get the most ad bang for Digital charts >> their buck? Issue 87 | 19th June 2013 | Page 2 continued… Online advertising hit a new high in the US Tweet have in common with a banner ad in Q1 this year. According to figures from on NME.com, other than they are both, America’s Interactive Advertising Bureau, essentially, “digital”? digital advertising revenues came to $9.6bn For the record, the IAB US report breaks in Q1, up 15.6% on the $8.3bn figure reported digital advertising down into: in the same period in 2012. • search Of this, entertainment took a healthy share. The Q1 release doesn’t break down spend • display/banner by sector, but the IAB’s full year 2012 report • classifieds showed that the entertainment sector represented 4% of all digital advertising • mobile revenue in the year. • digital video In the UK, meanwhile, the Internet • lead generation (fees paid by advertisers Advertising Bureau reported that digital to online companies that refer qualified advertising increased by 12.5% in 2012 potential customers) to a record annual high of £5.42bn, with entertainment and media making up 13% of • sponsorship that total. • rich media Possibly the most important point to make Jason Reed explains. These figures probably won’t surprise too • email is that while digital advertising may offer many people in the music industry, where “With the ability to A/B test [e.g. using two cheaper alternatives to traditional media digital has become ubiquitous. So dominant Adding to the complication, different variants in randomised tests], and constantly – courtesy of per-click rates and online has digital advertising become in the music sectors within these enjoyed wildly differing evolve strategies around creative, targeting marketplaces where advertisers can bid industry, in fact, that Sony’s decision to air fortunes, with email revenue down 27% year- and placement – digital has perhaps on campaigns – advertising budgets have TV ads for Daft Punk’s new album, Random on-year, while mobile grew 111%. empowered labels to use their spends not, on the whole, fallen. In fact, global Access Memories, was considered something more efficiently and effectively, rather than advertising budgets grew 3.2% in 2012, of a shock in the US. Digital and social media lower the reducing overall advertising budgets across according to Nielsen, despite falling 4.2% in barriers to entry a label,” he says. Behind the headline figures, however, lies recession-ravaged Europe. an immensely complicated field, one that So where exactly are record companies It would be a mistake, therefore, to think of What digital has done is to lower the barriers begs the question as to whether or not the spending their digital ad money in 2013? And online advertising as replacing other forms of to entry, allowing labels to experiment with term “digital advertising” even makes sense how can labels get more bang for their digital advertising directly, even as digital continues smaller spends throughout different parts in 2013. For what, after all, does a Promoted buck? to grow its share of the advertising pie. of the campaign, as Domino head of digital Issue 87 | 19th June 2013 | Page 3 continued… “We don’t usually spend money online except but online advertising can open up new ways This, according to Marni Wandner (president Vier, who oversees digital advertising for the for key releases and when we do we go to of identifying and targeting an audience of marketing agency Sneak Attack Media label’s artist albums. a couple of music websites,” says Gonzalo heavily engaged in music.” in New York), roughly reflects record label “Google Display Network is a really good Schiaffino, label manager of Everlasting spending. “Depending on the label and the This constant evolution and fragmentation place to advertise releases if the aim is to Records in Spain. “We’re spending less project, there’s still a bit of a budget allocated means that it is difficult to comprehensively drive sales, as it allows us to reach a very money on advertising – but not as a result of toward banner ads,” she says. “Though I think identify the key sites for advertising among wide audience searching, watching or digital. In fact it’s because it’s not profitable overall we’re all seeing the most return from record labels (see box p5). Looking at the reading music content via Google Search, anymore.” Facebook ads and SEO/SEM campaigns using whole sector, search continues to be the YouTube and websites or blogs belonging to Google AdWords ads.” Reed adds, “Online advertising certainly is largest area of digital advertising: in the their network,” he explains. more than ever an increasing part of the mix, UK, paid-for search marketing increased Adam Cardew, digital manager for “Other platforms such as Facebook might but more ‘traditional’ areas of focus such 14.5% to £3.17bn in 2012, representing a Absolute Marketing & Distribution, also be better to run ads in order to create more as radio and print continue to be important 58% share of digital advertising. In the US, favours Facebook, although he says online awareness about an artist, a video or a areas of outreach for us. Ultimately it’s search accounted for 46.3% of full-year 2012 advertising must reflect both the standing of release. As a label we mainly focus on the a bespoke set-up for each campaign revenues, down slightly from 46.5% in 2011. the band in question and what you want to Google Display Network with YouTube pre- depending on where the audience frequents; achieve from the campaign. roll, YouTube banners, Admob (mobile ads) “If you are trying to drive new fans for a and remarketing ads that allow us to target breaking act then mostly we work with an audience that has already engaged with Facebook on sponsored stories and our music.” promoted posts,” he explains. “If you have Given YouTube’s 1bn monthly users, as well an established act and the aim is to sell as its key role in music discovery, it is hardly albums, then we find that the best return on surprising that its name keeps popping up investment comes when people can listen to when discussing online promotion. the music. We find YouTube pre-roll ads are the best way to get the product in front of Reed says that YouTube is probably the key somebody.” site for digital advertising for music. “Given that YouTube has become something of a These ads can be costly to create, he notes, hub for music fans across all genres and but they generate impressive click-through demographics – with time spent there set rates to iTunes/Amazon and other retailers. to only increase across devices – it does feel This distinction between driving sales and like a more obvious avenue to focus upon,” creating awareness is also made by Ministry he says. “But since each campaign will have of Sound digital marketing coordinator Julien its own objectives in terms of end-goals and Issue 87 | 19th June 2013 | Page 4 continued… communication, it’s important to be flexible IAB UK to establish the Audio Council “in Mobile is the next frontier labels’ digital advertising plans rather than in the approach.” acknowledgment of the growing significance being bundled in with other online activities Mobile is another boom area for advertising, of audio within the digital landscape”. because of the competing platforms and how Vier agrees that YouTube is absolutely key. fuelled by the smartphone explosion. In information is presented to mobile users. “YouTube videos are often the main online Domino’s Reed says that audio ads the UK, mobile now accounts for 9.7% of “Mobile advertising – and more broadly, tool to promote a single online therefore “undoubtedly allow the music to speak all digital advertising spend, compared to tablet advertising – is becoming an ever- it makes sense to use the official videos for itself – and so this will definitely be an 1.1% in 2009; meanwhile in the US, mobile important consideration to labels, given the to make pre-rolls in order to advertise a ongoing area of focus for labels”. He adds, accounted for 9% of online advertising increase in second-screen viewing,” he says. release,” he says. “From my experience, “I am certainly intrigued by the launch of revenues in 2012, up 111% from 2011. What’s pre-rolls are one of the most engaging ad iTunes Radio and how this could significantly more, eMarketer recently predicted global One of the key things about digital media, of formats; they always get a very strong CTR grow the reach, and potentially the targeting, mobile ad revenues would grow from $8.8bn course, is that it has lowered the barrier to (click-through rate) and have a reasonable of audio ads across mobile.” in 2012 to $15.82bn in 2013, with Google distribution and connected people globally, cost per click.” taking a significant 56% of the market.