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Thursday, 17 April 2014

In tune with how you feel

James Verrinder talks to Sony Music about the online community they use to connect with their diverse customers base.

The last figures from the Performing Rights Society, the body that collects and distributes music royalties, puts the value of the UK music industry at £3.8bn, which is behind only the US and Japan. Most of the music sold in this country is by acts signed to the big labels - the Sony Musics, the EMIs, the Warners
and the Universals.

The strength of big labels is their marketing clout. Music is about the talent, of course, but the ability to hold a tune does not guarantee success in today’s competitive marketplace. There are exceptions - like the Arctic Monkeys, which built a following on MySpace without label backing. But increasingly success is determined by the strength of the marketing team an act has behind it. These men and women work behind the scenes to make sure that the right act is marketed to the right kind of people.

“BackStage is great for exploring and generating hypotheses around our artists, which we can use to debate with marketing managers”

Dan Hall

Dan Hall

It’s a “creative gut-lead business”, says Dan Hall, Sony Music’s head of insight. But a little bit of research and insight can go a long way towards helping creative teams connect with the correct audience, whether that’s the die-hard fans who rush out to buy their favourite artist’s latest offering or the less music-savvy individual who only buys one CD a year at Christmas.

Six years ago Sony Music embarked on a segmentation process to “pair up” the right acts with the right fans, explains Hall. This involved splitting its customers and prospects into 28 different segments that reflect the UK music-buying population - a far cry from the 6-10 segments used by most businesses.

Segment types include the Curators, who are “connoisseurs of the good things in life” and enjoy artists like Bob Dylan and Miles Davis. Then there are groups like the White Collar Radicals - 25- to 34-year-old males who are fans of acts like Daft Punk and the Kings of Leon. Add to that Cool Career Girls, Tipping Pointers, Weekend Warriors and Domestic Goddess, and many others.

“Because music is such a granular market, a traditional 6-10 segment solution would not have been appropriate,” says Hall. “So we’ve got 28, which means it’s quite intensive in terms of asset creation and tool creation. But we’ve got a super in-depth segment bible, which really brings our segments to life as music consumers.”

Sony uses these segments to “plot” the marketing campaigns for various artists, but they were also used 18 months ago when the company started working with the research agency Promise to recruit and maintain an online research community.

Fan base
The Backstage community now has up to 1,000 members who have been matched against the in-house segmentation. Members are kept busy with a constant stream of new music - the aim being to find out where an act sits with the segments and how they are perceived by the target audience. It’s also used as a means to gather and test ideas for new marketing campaigns in support of acts.

Recruiting for the panel must have been an easy task, Research suggests, with music fans queuing up to have their say on their favourite acts. Hall admits that finding particular sets of fans is not a problem. Instead, the difficulty comes in trying to build up a group representative of UK consumers as a whole.

“That’s important because our segmentation is representative of the UK population,” says Hall. “So it was as much about getting the balance right, of getting the music fanatics, but also getting people who were less engaged, less passionate about music. We wanted to get at least 30 people from every segment on board.”

Hall says that prior to the launch of Backstage, qual interviews were the main way to gather insight from consumers. “But that’s quite labour-intensive. What we wanted was to have a continuous conversation with our consumers in a way that was really quick to turnaround.”

Projects that the community has been involved in include helping develop a new marketing position for Il Divo, an operatic pop vocal group, and having an input into marketing plans for the likes of boyband JLS and for singer Leona Lewis (pictured above in a still from the music video Collide). Projects typically involve a mix of live discussion sessions, online brainstorming and activities designed to generate creative ideas. Findings are then workshopped in creative sessions with key client stakeholders who turn community insights and ideas into workable plans.

Hall says that on average the community is tasked with something four times a week, with around 200 members engaged in each discussion. “It’s great for just exploring and generating hypotheses around our artists and the campaigns, which we can then use as a foundation for a debate with the marketing managers,” he explains, “Often it will tell you as much what not to do as what to do, so it’s a great input into the marketing function.”

As well as its marketing support role, Sony also uses Backstage for one-off strategic research projects - such as a recent investigation into selling music direct to consumers, and something referred to as “Project Phoenix”, an initiative by the label to find ways of maximising sales of artists’ back catalogues - in particular, music releases that are over 18 months old.

Tom Hoy, senior consultant at Promise, points out the cost saving benefits of a community to a company like Sony. While a business in the FMCG sector, say, might spend £4m on researching the one new product they will launch in a year, a publishing group of Sony’s size (it owns the labels Epic, EMI, Columbia and RCA, as well as its Syco joint venture with X Factor producer Simon Cowell) will put out something like 250 new ‘products’ annually.

Creative differences?
Hall says that the other labels under the Sony Music umbrella have been “broadly” supportive of the Backstage community - despite the tension that can exist between the freewheeling creativity of an artist and their marketing team, and the perception that research is only there to rein in their excesses.

“In all companies you have people who are more engaged and some who are less engaged,” Hall explains. But once it was understood that the community had not been introduced to help “insight override intuition” they soon warmed to it,” he says.

“Insight is about raising the understanding of the audience,” says Hall. “Once you have a platform like Backstage then really great creative marketing ideas can come off the back of that. Essentially we’re using research to really inspire people.

“You have intuition and you have insight, and what we’ve found is when you crash the two things together it leaves a really great creative mark.”

Hall describes Backstage as “the jewel in the crown of our function” - and that function is to “go beyond the research and make sure that insights are acted upon and applied to our campaigns.”


Why Backstage has the X Factor

Tom Hoy

Tom Hoy

One of the ad-hoc strategic pieces of work that the Backstage community is used for took place during last year’s X Factor competition.

Syco, the X Factor’s production company and record label, went straight to Backstage members for feedback on the performances after every programme and used the information they gleaned there to target potential fanbases when the time came for the winning act to receive a record contract.

Promise’s Hoy (pictured) says: “Every week one of the planners here went in and presented to the Syco team so by the time the acts were signed, they already had a clear idea about what kind of segments they appealed to and how to position the artists.”

Members would be asked to say when a particular act had a bad week and to explain why they felt that way. This type of sentiment data could easily be sourced from the conversations that take place on Twitter or Facebook. But the segmentation data is the deciding factor here, says Hoy. “We know who is saying what.”

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