Equity: Borrow it or Lend it? How do brands choose appropriate campaign music?

When considering music for campaigns, brands often face a dilemma about the deployment of musical resources. At a basic level, the choice is : Larger & Powerful vs. Smaller & Tactical
 
Let’s explore this with a physical analogy: When an army General is faced with a security challenge, a decision needs to be made on the deployment of military resources. Available options might be:
The Battalion: Large, cohesive, higher cost and effective through sheer fire power, vs.
The SAS : Small, fragmented, lower cost and effective through micro-targeting

For brands, this translates to:
(i) invest heavily in one superstar artist or track in one activation vs.
(ii) spreading the risk with several lower profile artists across multiple activities.

Let’s dig a little deeper …


Superstar Artist or Track

So, what do you get? A proven chunk of equity, albeit someone else’s. There’s safety in backing a very well-known property (artist, track or both) and it’s easier to justify how this investment will engage consumers more effectively. However, there’s the “all eggs in one basket” element to consider, and it can be an expensive mistake if the campaign doesn’t deliver against defined KPIs for brand awareness, campaign recall, market share and sales. The high price tag associated with proven equity will also come with restrictive usage rights.

As a recent example, here’s a US spot for the VW Passat. The borrowed equity is the all-powerful Star Wars franchise whose properties includes both the Darth Vader character and John Williams’ instantly recognisable film score. 32 million views certainly demonstrates strong consumer engagement – perhaps driven by the dual use of equity i.e. the music is directly linked to the featured character in the spot.
http://www.youtube.com/watch?v=R55e-uHQna0


Lesser-known Artist or Track

This is a lower risk option that allows brands to build their own equity over time during a longer, multi-part campaign. A lower profile artist or track has less of their own equity at the outset, and clearly more to gain through an association with a brand. The balance of power sits differently as the brand builds a platform to which it invites various artists. The brand lends its equity to those artists who benefit from increased exposure - though no individual artist is the “main event”. On commercial terms, the cost of each artist deal will be lower than for superstar artists or tracks. Brands will also have greater leverage to secure broader usage rights.

As an example from last year, Stella Artois engaged with artists to appear in their 60s themed “Stella Presents” campaign. As with VW, we have dual use of equity – both music and related characters appear in the films. However, the artists are visitors to the brand’s world, so they borrow Stella Artois’ equity rather than the other way round.

Stella Presents -  Mystery Jets
http://www.youtube.com/watch?v=I4F_apOafxM

Stella Presents - Marina and the Diamonds
http://www.youtube.com/watch?v=KkBeANZNx5c


So what are the take-outs for brands. Consider the following questions:

1. Using our military analogy, decide if you want success through “shock & awe” or stealth tactics.

2. Clearly define the time-line objectives. Do you want to get in quick, seize the ground, then get out? Or do you want to be in the space for the long term?

3. What are your cost objectives? Can you commit all your budget now? Or release it slowly over time?

4. Do you want to bask in the glow of instantly recognisable superstar talent or be gain kudos for supporting newer artists?

By answering these questions, you’ll be closer to a decision on the right type of music for your campaign.

What's the best production strategy for retailers and FMCG brands?

Constantly small vs. infrequently large?

Some clients invest the majority of their annual marketing budget in one or two “blockbuster” TVCs rolled out across multiple markets. Budgets are typically very high and handled entirely by the network agency of record. Other clients spread the risk more evenly through regular output of lower cost communications – we see this with retailers and clients with large FMCG portfolios. These brands understand that a constant flow of engaging content keeps them top of mind for consumers.

I believe that the “small and constant” strategy presents the greatest opportunity for clients looking to innovate their production processes. It offers a chance to de-couple some or all elements of production from their network agency into niche specialist suppliers, but at low risk. In contrast, the cost saving benefits can be disproportionally high and so pave the way for the adoption of this approach across other communication platforms.

Key take-outs for clients are:

• Start in areas where the stakes are low
• Partner with leading marketing procurement consultants
• Identify best-in-class niche suppliers, free from vested-interest agency relationships
• Step out of your comfort zone and make it your mission to learn
• Constantly refine ways of working through learnings from previous projects

Small is beautiful. Niche specialists trump generalists. Why?

I’m currently reading “Positioning For Professionals” by Tim Williams. He makes a compelling argument for the narrowing of focus as a strategy for success. This got me thinking about the polarity of niche specialists vs. generalists in the agency market.

“Full service” network agencies like their clients to believe they can cover all bases - that they have high-level skill sets across the full spectrum of strategy, account management, creative and production / execution. The truth is however that many elements of production / execution are outsourced begging the question: Why is this still in the agencies’ remit? A long linear production supply chain adds complexity and cost, but reduces transparency and visibility from a client’s perspective. As clients look to take greater control of execution, I believe we will see more direct client relationships with niche specialists across production, talent, music, photography and post-production. As ever, marketing procurement consultants will help clients to build and manage a network of niche specialists resulting in the following benefits for brand owners:

• Reduced agency fees (given that production / execution is removed from their remit)
• Direct relationships with specialist supply chain
• Removal of agency mark-up on production costs (yes, some agencies still charge this!)
• Lower supply chain costs through more effective use of competitive tendering
• Increased transparency and visibility

What will client-agency relationships look like in 2011?

Happy New Year!

It’s a good time to set goals for the coming year and consider how the marketing communications landscape will develop during 2011. From discussions with brands and marketing procurement consultants over the last few months, I have a few predictions to share with you. Feel free to post responses if you agree or disagree – debate is good! Here’s the first one ….

Direct Cost vs. Overhead
There’s been much discussion in the UK client & agency trade magazines about the shift from retainer to project-based client-agency relationships. Clearly, this is driven by client side cost-saving initiatives, but it suggests a deeper trend. Marketing communications agencies (& advertising agencies in particular) are likely to move towards operating models common to the TV & Film industries. i.e. small core salaried teams (overhead) with larger flexible freelance resource for specific projects (direct costs). The more recent UK agency start-ups already embrace this model, and are able to compete more effectively in an over-supplied commoditised market. What’s becoming clear is that clients are less willing to support the high overheads of large Central London agencies with several hundred people on the payroll. Agency retainers that fund teams of high-salaried staff will increasingly be challenged by clients, supported by the growing ranks of marketing procurement consultants. The long-established large agencies will be forced to adapt as their margins shrink below 10% and we may see some considerable downsizing of permanent staff. It’s true that clients enjoy spending time in the smart West End offices of their agencies – it makes a pleasant contrast to out-of-town business parks. However, increasingly the thought 'I’m paying for this!' will be front of mind for clients as they enter their agencies’ marbled halls. This thought will force agencies to change.

MarketingCLOUT covers the launch of Resilient Music

Marketing News blog MarketingCLOUT - http://www.marketinguk.co.uk/ - have just written about the launch of Resilient Music!

Here's an excerpt:

A new strategic music consultancy, Resilient Music (www.resilientmusic.com), is being set up to help brands reduce costs by taking greater direct control of the process of sourcing and purchasing music for marketing campaigns.

With marketers increasingly looking to control costs by taking over the purchasing of products and services traditionally procured by their agencies, a new strategic music consultancy, Resilient Music, is being set up to help brands take greater control of the process of sourcing and purchasing music for marketing campaigns.

Read the full article at http://www.marketinguk.co.uk/Marketing/New-music-consultancy-Resilient-Music-helps-brands-take-control-of-procuring-music-for-TV-advertising--branded-content-mobile-marketing-digital-marketing-and-experiential-in-store-marketing.asp.

Why marketers need a clear procurement strategy around the sourcing of music

A few days back I responded to a recent Marketing Week article entiled 'Let the music do the talking'.

This is the link to the article - www.marketingweek.co.uk/in-depth-analysis/features/let-the-music-do-the-talking/3018452.article - and below are my comments:

The article cites that brands and artists are looking for longer term partnerships because of lower than expected ROI from short term campaigns. But by what metrics is ROI measured? Is it just about brand awareness? How often do brands actually measure the cost of the campaign – both music assets and media – against the net effect on their P&L?

When discussing bands and brands, marketers need to take into account the drier topics of procurement and music rights management.

Artists are certainly turning to brands as an alternative source of finance because revenues from CD sales have fallen. But the artist rarely controls all the rights a brand needs. In a typical band/brand partnership, the brand will need to license rights from the artist, record label and music publisher – all of whom may have different agendas. So it’s a complex process.

That’s why marketers need a clear procurement strategy around the sourcing of music – one built on dispassionate competitive tendering. Everyone has an opinion about their favourite track or artist, but this is not the ideal context within which to make purchasing decisions involving a five-figure or occasionally a six-figure investment.

What’s required is best-practice discipline, whereby the merits of artist candidates (and their associated costs) can be benchmarked against objective industry data. In this way, brands can make decisions ruled by their head and supported by their heart, not vice versa.

In these challenging economic times, brand marketing teams are increasingly being scrutinised by their Finance colleagues on the commercial effectiveness of each campaign. This became apparent when we were researching the business model for Resilient Music (www.resilientmusic.com).

We found a growing need for brands to implement a music strategy that allows them to reduce costs by taking greater direct control of the sourcing and purchasing of music for their campaigns. This enables brands to acquire music rights with the same procurement processes as any other service or product in their supply chain.

Fmcgnews.co.uk covers the launch of Resilient Music

Fmcgnews have just written about the launch of Resilient Music!

Here's an excerpt:

With drinks marketers increasingly looking to cut costs by taking over the purchasing of products and services traditionally procured by their agencies, a new strategic music consultancy, Resilient Music, is being set up to help drinks brands take greater control of the process of sourcing and purchasing music for marketing campaigns.

In recent years, music has become an increasingly important means of helping drinks brands to engage with consumers, but there are now growing concerns over the cost of using music in marketing communications.

The company aims to help reduce the cost of using music as a branding tool by taking an approach to music sourcing that is similar to a marketing procurement consultancy - but with a specialist skill set in music.

Read the full article at www.fmcgnews.co.uk/music-and-food-an-effective-marketing-tool-cms-1189.