Brandwidth Blog

The Music Industry is changing and no one really knows how it’s all going to play out. This is not new news but considering that CD sales are down again for seemingly every major record label in the industry, it is still news. The music industry is paralyzed motionless still scratching it’s head (BAU). Record companies are recording losses to the tune of 3 Million a quarter. All the record labels are downsizing and trying to reduce operating expenses to maintain positive cash flow. Record labels are offering different kinds of deals to bands now trying make money by getting a larger peice of publishing, touring, and merchandise sales. These deals are being referred to as 360 or partial 360 deals. By offering these kinds of contracts the record labels hope they can still make a profit. Labels have to make a profit to continue to upfront national acts enough cash to get an album recorded, released, and tour on it. Getting a peice of all the action means the label still makes money. The labels hope. Bottom line for the unsigned band is, they will not see many Million dollar record contracts being thrown at them anymore.

Let’s don’t just pick on the labels though. Radio is struggling also. Radio is consolidating, and spreading out buying music venues and leveraging their websites as a resource to minimize their back sliding audience. They are trying convince advertisers there is a valuable audience that is still listening to Radio out there. For certain demographics or age groups I believe there still is a valuable audience. Not in the 12-30 years old market anymore. Consumers 30 and up seem to listen to the radio still. It hard to teach an old dog new tricks. However, young people in America have thrown out their radio’s and Jam Boxes and replaced them with I Pods and Cell Phones. Music file sharing in conjunction with Internet sites like Myspace and FaceBook have replaced radio all together. Most of the young people I have questioned say they never listen to the radio anymore. NEVER. The demographic is shrinking for young people in America and that is a fact.

Prince and Radio Head are giving away CD’s to promote live concerts and other merchandise sales. Big Bands can make more money on the shows and the merchandise without having to give any money to the Labels. Using the Web as the only form of distribution reduces cost dramatically and the whole world can buy your album on-line for a fee or for free. This seems to be the answer for big already established bands that have Name-Brand recognition.

Unknown regional acts struggle in this model. To give away CD’s and only profit from merchandise and touring will weed out the weak. Most unsigned bands are lucky to make $250 to $1000 per night playing live and a couple hundred in merchandise sales. Split that 4,5,6 ways and there is not much left. Try to save money while touring on this budget is difficult. An unsigned band still needs to record an album, pay for reproduction, and with any luck hire a producer. Let’s don’t forget the attorney, manager, business manager, PR company, and booking agent, web developer and graphic design.

The masters of the Internet and the Masters Internet Marketing are the one’s that will come out on top in this game. Bands being sponsored by more large corporations and utilizing cross marketing opportunities to get the most “bang for band or buck” will be another solution. I would not be surprised to see more companies like Starbucks forming their own labels and selling or giving away CD’s on-line or through existing retail chains to add a revenue stream, value to the franchise, and increase cross-marketing abilities. These sure are crazy times. I guess we will have to wait and see how it all unfolds.

Breaking down the walls to creating a well known and respected brand name is difficult. There are a million things to consider when creating a new brand or trying to increase awareness of an existing brand. Branding generally takes a lot of time and can be very expensive. Many clients look at branding as a necessity while others consider it optional.

Most of the largest companies in the world understand the concept of branding and brand response. You as a consumer understand because you know the Corporate Identities of those who focus on branding. You know their products and what their products do. Most of the time anyway. So why will a large global company spend so much money and time trying to create a brand identity-awareness? Why will a local or regional corporation spend very little or no money trying to create a brand identity-awareness?

Sales is the reason why “for profit” companies exist. There is a product or service that can be sold for a profit to a market large enough to justify a corporate existence. Making it easy for the consumer to buy your product over the competition is what will make or break a great sales organization. A successful local, regional, or international branding campaign can give your company the upper hand in the sales fight. Understanding your customers needs and getting your value proposition in front of as many of your potential customers as possible is critical. Most clients that do not have a focus on branding and are missing an opportunity to increase sales. Branding can be accomplished in many ways. Some can be a little expensive (TV-Radio) and others are free (Community Relations). Finding a good marketing agency that understands the value of branding and how to accomplish it can help you increase sales. Believe it, brand it, sell it.

Over the years I have heard so many people say that some things will never change. He or she will never change. This or that will never change etc. etc. Some things can and do change (when you make them change). Sometimes things you did not mean to change do for the negative when you implement a positive change. I find this to be true in business and in my personal life. It’s that old cause and effect phenomenon at work. So here’s an observation.

At the ripe old, young, middle of the road age of 37 I have decided to change my life. In 2007 I decided to change careers from working in an industry that I no longer enjoyed, and for a company that treated me and my family poorly. Now I am for a company I love to work with, and doing a job I enjoy (instead of one I hate). With that in mind a couple of months ago I decided to change my life again. To focus on a better healthier lifestyle. Eating better, taking vitamin supplements, relaxing, meditating, acupuncture, going the Chiropractor, the Dentist. I mean I have been cleaning my life up.

The results have been less than positive to this point. I have never felt worse. I have been sick for almost a month now. First with the stomach flu, then a broken tooth, now bronchitis for two weeks solid. I am about to start round two of antibiotics. What does all this mean. Can it actually be bad to be good. Well, since I am not feeling great at the moment I suppose it can. I will say this though. Overall I have not been feeling well physically but mentally things are improving. These physical problems may just be a symptom of the past several years of unhappiness at work and a terrible diet coming back to haunt me. Now that I am taking the time to fix my issues the machine (my body) has decided it’s ok to break now. It is a painful process now but the future benefits will far surpass the temporary pain I am experiencing now.

I believe the same logic applies in business. Change is hard. It can cause short term issues that can really hurt. Doing the right things for the right reasons is the key to success. Staying diligent and never letting the fear of short term pain hold you back from decisions that will increase you chances of success in the future is critical. Diagnosis: Pain today = less pain tomorrow (I Hope)

Lately I have spoke to many customers that say they have an Internet Marketing plan. I think this is really great news. The problem is when you peel back the onion there isn’t much there in terms of real goals and benchmarks. There is no real plan. Just tactics being used to drum up some e-business.

Having a website and optimizing a few Key words does not constitute having an Internet Marketing Plan (IMP). Having the ability to sell your products on-line does not constitute having an IMP. Using Pay Per Click Advertising does not mean you have an IMP. These are all components to be considered when developing an IMP.

If your website has the ability to explain products, answer FAQ’s, and complete a sales transaction, then you have a virtual sales person. That is a great start. This sales person is available 24 hours a day, 7 days a week, and never calls in sick! Unless your web hosting provider or Internet T-1 is down. We all know that never happens.

Most companies have sales people and marketing departments to support their sales effort. The same principle applies to your virtual sales person/ Website. It’s not enough to give one of your potential top performers part of the tools they need to be successful. You need to give them every tool you can to be successful. At the same time you have to set realistic goals and work on an all inclusive IMP to maximize the efforts of your on-line sales goals. You can create a successful IMP, implement it, measure it, and count on these revenues to grow month over month if you take the time make sure you have a real Internet Marketing Plan.

US ad spending in the traditional Marketing arena has dropped again. In fact it’s at an all time low since 2001 according to TNS. Is it that companies are truly spending less, or are they spending more in different areas?

The good news is marketers are still spending around the same amount on their marketing efforts. In fact some are spending more than ever! The strategy is changing though. More and more customers are putting their spend into Internet Marketing, CRM, and PPC advertising. This explains where the lost ad spend is going. Why?

As we all know the Internet is growing at light speed. The world continues to connect with this great resource (The Internet) and the opportunity to advertise effectively and inexpensively is growing also. Marketers are trying to get the most bang for their buck and the Internet may be the best solution. The internet is the fastest growing medium in the world, and is likely to be the largest advertising medium in the world by the year 2010 according to many trade magazines. Marketers like Country Wide Financial for instance spent 93 Million the first half of 2007 in On-Line Marketing according to Nielsen Net Ratings.

It’s important to consider the value and the cost of your marketing dollars. Most marketers are catching on to the benefits of On-Line Marketing. This is why we are seeing the decline in overall traditional ad spending. Consider where you’re putting your marketing dollars, consider value vs. cost, and keep marketing!

“Measure It”!

In today’s business world almost every customer is focused on getting a “ROI” Return on Investment and “TCO” Total Cost of Ownership.

ROI and TCO are mentioned in every trade publication. Customers spend many hours with their teams trying to understand this great dilemma. Vendors talk about how to help customers with these challenges also. With many products and services it’s fairly easy to quantify the hard costs of a product vs. sales matrixes that determine the ROI and TCO.

As a SVP of Marketing or Director of Marketing for an enterprise or global customer this is a real challenge. How do I make sure I am getting a ROI and controlling my TCO with my marketing budget? With so many forms of traditional advertising and web marketing being used all the time, most customers cannot wrap their arms around the big picture and quantify how their marketing $$$ actually affect the bottom line.

Using a web centric Integrated Marketing approach can help you measure the results of your marketing efforts. Did you knowing that the #1 response mechanism in the marketing world is TV directed to the web, the #2 response mechanism is Radio directed to the web, and #3 is Direct Mail directed to the web? Using an integrated software based solution like Brandwidth uses CRM (Customer Relationship Manager) to help measure the results is a great start. Developing a plan to drive as much traffic as possible to the web makes it easier to manage the results. Special landing pages and 800 # tracking makes it possible to measure the results of any marketing effort whether its web based or traditional TV, Radio, or Direct Mail.

The moral to the story is “Measure It”. Measuring the results of your marketing efforts will give you the flexibility to try, modify, and prune your marketing efforts to get the greatest results with the least amount of cost. Measure it and you will seen as a hero with in the sales organization of your company, and be perceived as a cost conscience effective leader by the rest of your company.

“Measure it”

Client Example: Recreation Unlimited

The Work:
Website development, national landing page promotion, Search Engine Optimization, Hosting, national internet marketing campaign, performance analysis, and web video production.

Background:
Recreation Unlimited desired a web presence and internet marketing initiative to attract a niche customer base for its GoalrillaGoal brand basketball goal. Brandwidth developed their marketing message, clarified their internet marketing objectives, strategies and tactics while developing a clean and easy to navigate web presence that is performing well above initial company and site goals. Integrated web video is the focal point of a landing page promotion program.

Results:
Since beginning work with Brandwidth, sales have increased by more than $2,000,000 per year. Not to $2,000,000, we’re talking additional sales. Recreation Unlimited is now the nation’s #1 online and offline retailer of Goalrilla Goals and has contracted with Brandwidth for the development of two new, unrelated product lines.

Do you want to be perceived as a Partner or a Vendor by your customers?

In my experience many Enterprise clients really like to talk about the “What” regarding their business offerings to potential and existing customers. Whether it’s Web Marketing, TV, Radio, or Direct Mail. Clients want to show “What” services they offer and “What” the prices are for said services. The potential customers do want to know this information and it is helpful to them.

However, most customers are looking for you as the client to explain the “Why”. The why helps a customer make a decision based on their needs rather than a price. A customer solely or primarily making a purchase decision based on price perceives the client as a vendor not a partner. Customers need your help explaining the “Why” so they can make a decision based on more criteria than just the “What”.

Why should I do business with your company? Why is your product better than the competition? Why is your company better to work with? Etc.

Doing a great job explaining the “Why” in your marketing efforts will change your perception to your potential and existing customers. In the end you will win more business and have more satisfied customers. More sales for the right reasons and better customer retention. You are helping the customer make a decision based on their needs rather than just a great price.