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I was honored and excited to present on the topic of Managing, Measuring, and Marketing with Data for the MidemNet Academy last week in Cannes, France. I crafted the presentation to be more of an educational tool, which shares data from our Topspin direct to fan marketing campaigns and related best practices. There are links in the presentation to other resources and third party sites that are pertinent to the topic of marketing artists with data. Many thanks to Adam Bates and Vivek Agrawal on the Topspin team who mined all the data in this presentation.

The full presentation in its slide form is below. It reads better in full-screen and even more so if you download it in Powerpoint or PDF.

The point I highlight in the presentation is to approach your first direct to fan campaign as more of an investment in data gathering to understand your fanbase and less of a silver bullet for overnight marketing and distribution success. With each subsequent campaign you’ll gain more intelligence on the unique dynamic you have with your fans. This will lead you to formulate more compelling offers for your fans and drive higher conversion rates over time as you become savvier in your segmentation and target marketing.

At Topspin we approach our data gathering efforts from a funnel perspective where we baseline and improve each of the following variables in a direct marketing campaign:

The original vision for our Topspin product is based on this approach. The idea is to get your artist into as many eyes and ears on the web as possible and get prospective fans to play or share your media. This level of engagement converts those impressions into permission marketing relationships, which ultimately translates into recurring revenue from your fans.

As you think holistically about the funnel, conduct your direct to fan marketing campaign systematically through a series of scientific experiments to increase each of the variables above in every subsequent campaign:

1. State your hypotheses or goals
2. Craft your offers to meet those goals
3. Collect data
4. Measure your performance
5. Optimize your campaign
6. Repeat successes, iterate improvements, and constantly experiment

This process should be circular in that you’re frequently re-starting the cycle for constant hypothesizing, measuring, and optimizing based on your previous campaign data.

The goals you set will depend on whether you’re prioritizing on fan acquisition for emerging artists or monetization for established acts. It’s helpful to define these goals from the beginning in a clear, quantifiable way so you have something to benchmark against.

When crafting offers marketers should consider their artist as a brand with many products to serve a variety of customers. These range from new prospective fans who want to hear the music for free before pulling out their credit cards to hardcore fans who place a premium on collectibles from their favorite artist. The best practice we’ve realized is to authentically connect with your fans and give them a range of tiered offers that will generate more revenue and margin for the artist than just selling the same product that’s available in all other channels.

Here’s some interesting purchase data that show how fans consume offers from Topspin artists and how it breaks down in revenue:

It’s clear that including physical goods in your offers will increase your overall revenue. Our average revenue per transaction at Topspin is over $20, and it’s $50 for some branded artists who follow best practices. This is significantly higher than other digital channels where fans are buying a track or two at a time. Here’s more Topspin data to reinforce the point of higher priced goods driving more revenue for artists:

As you can see, slightly more than half of the transactions at Topspin are under $10, but they only account for 17% of the revenue. In fact, offers priced $25 and over, which include physical items represent the majority of revenue. The hope is that you take these data insights and plot your own demand curve to serve your spectrum of fans.

Once you’ve crafted offers to meet your goals, you need to collect data, and there’s no better tool available than Google Analytics. It’s free, simple to use, a universal standard, and offers third party integration. Our Topspin purchase flow has integrated with Google Analytics so you can see those transactions as ecommerce metrics reported in your artist’s Google Analytics account.

Google Analytics lets you identify sources of traffic to your website and offer page. More importantly you can assess how this traffic converts to new emails and active paying fans. Here’s a Topspin Knowledge Base article on tracking website conversion by source traffic. Google’s Analytics is a powerful platform for measuring the effectiveness of all your online marketing activity. We recommend using Google’s URL Builder to create unique order page URLs for more granular tracking in your campaign. Here’s a more comprehensive and detailed Topspin Knowledge Base article on Tracking Sales and Conversion by Marketing Activity. You can use your own stats on traffic and conversion to project demand for your direct to fan campaigns. If you do not have a handle on your own traffic or conversion rates, here are Topspin averages across across a variety of channels for you to jump start your own projections:

According to the above data, email has the best conversion followed by direct traffic, and search. Given the lower rates of conversion across third party sites, it’s important to drive your fans directly to your offer page at every opportunity. In order to demonstrate this point, we depicted the difference in conversion of an artist broadcasting their video on YouTube vs. their own direct to fan video player on Topspin where they control the redirect which goes straight to the fan offer page:

Both video players performed equally well on click-throughs at a 10% rate, but since the YouTube player redirected fans to the YouTube video page, there was a 100x difference in purchasing conversion since fans had to click one more time on the YouTube video page to get to the artist’s offer page. By using your own video player and directing fans straight to the offer page, you can be assured of higher purchasing rates. Of course, you should definitely have your videos on YouTube as it’s a destination site for music discovery, but when it comes to your own website or social networks, you should broadcast and encourage sharing on your own players since they lead fans directly to the destination of your choice, specifically your offer page.

After the data is collected, you’re in a position to measure performance across channels. The goal is to identify the major drivers of conversion and prioritize on those channels that show the most promise in acquiring active paying fans. You can compare your performance against Topspin’s revenue distribution across all our artists and fans:

It’s no surprise that email is the highest driver of revenue at Topspin followed by direct traffic and Google search. What’s enlightening is that MySpace is still holding strong as a source of revenue compared to the much publicized growth of Facebook and Twitter. It will be interesting to revisit this analysis in a few months to see if Facebook and Twitter increase in share over time.

As soon as you get a sense of your campaign performance, it’s time to optimize. Focus on SEO since it’s imperative that your artist name and offer page are at the top of the search results given the volume of traffic and revenue generated by the search engines. You want interested fans coming immediately to you without being diverted to a third party site. A great web resource for SEO tips and best practices is the SEOmoz Blog. Another good resource is Rank Checker, which tells you where your artist site or offer page ranks in search results for different key words.

Now to touch upon one of the most exciting data topics for me personally: understanding the metrics for the new music business. We’re just scratching the surface in figuring out how to measure success for marketing artists online, and here are a few one-off stats from some of our campaigns. Topspin’s goal is to establish norms around these metrics to let you assess your own performance around indicators like these.

The first is the Play to Purchase ratio. When David Byrne and Brian Eno released Everything that Happens Will Happen Today, they released a streaming player with full-length streams, which was embedded far and wide. This proved extremely effective in that 1 in 5 plays led to a purchase in the first few weeks of the campaign. I would consider this highly successful, and since their average transaction prices was over $15 , that means each play was worth about $3.

A metric from the Fanfarlo campaign that signaled strong performance was their ability to acquire fans at a rate of 49 fans per 1000 impressions of their widgets. This included both new email opt-ins and purchasers. We found this number to be extremely high compared to our paid advertising tests, where we purchased inventory across music services to acquire email addresses at less than 1 per 1000 impressions (0.7 per 1000 to be exact). Fanfarlo’s widget impressions from Topspin may have been lower in volume, but they were FREE and 70x more effective in acquiring emails and paying fans.

“Dispersion” is the artist’s ability to get picked up and embedded in other websites. David Byrne and Brian Eno’s streaming widget was embedded in about 160 blog sites, and Fanfarlo’s streaming and email for media widgets were embedded in more than 248 sites. Once again, great metrics for widgets that ultimately directed fans back to their artist order pages.

Another mind-blowing Fanfarlo data point was their Shares to Sales ratio at 1.1. It means that for every one person who shared, more than one person purchased. This most likely had to do with the exceptional quality of their music, their fanbase of tastemakers who influenced their own audiences to buy, and their offer price of $1 for their campaign during a 3 week promo. The data has shown that Fanfarlo’s campaign worked wonderfully and is a great case study on viral promotions for an emerging artist.

These are just a few of the interesting metrics we’re getting our heads around at Topspin. We’re at the beginning phase of the direct to fan era, and as I said in my talk, I feel that we’re all in this together in figuring out what works and what doesn’t. I’m hoping the data in this presentation will help you generate more insights, which can ultimately be shared back with the community at large. Feel free to join us in the Topspin Green Room to share your ideas or ask questions.

Shamal
@shamalman