Archive for the ‘Case Studies’ Category

Kirrihill Wines: Calculating Social Media Marketing ROI

Thursday, October 16th, 2008

KirrihillI made a deal with Kirrihill Wines a week or so ago.

We didn’t sign any contracts or even shake hands. I haven’t met anyone from the company, I’ve never been to see their grapes growing, in fact I haven’t even been to the region.

The deal we’ve made isn’t written down on paper, in fact it hasn’t even been spoken about. What we have is a social media marketing pact. They’ve engaged me in an online dialogue and we’ve made an exchange.

The exchange was as follows:

  • As an ‘influencer’ I get: a dozen bottles of wine
  • As a wine manufacturer they get: a conversation

Zakazukha Zoo isn’t a blog about wine. I’m not an influential wine critic. While I’m under no obligation to blog about their product, if I like it, statistics show that the chance of me recommending it to my friends is greater than 50%. They are presuming I will at least like the wine and they are hoping I will love it. They have confidence in their product and as someone with some social media reach, they think my dialogue is worth investing in.

Here’s why…

The reason they chose to send me 12 bottles, as opposed to one bottle, or a gift voucher, or a nice comment on my blog, is because the following information is public knowledge about my reach as an influencer:

  • I have a blog which is regularly read by at least 30 people (they don’t know the actual stats, but that’s the number of regular commenters)
  • I blog mostly about social media, Google and Facebook, but I also mention wine from time to time and I have blogged specifically about Kirrihill Wine.
  • I have 177 friends on Facebook
  • I have 34 Twitter followers
  • I have 30 connections on LinkedIn

I’m going to presume they have this information stored in a database somewhere and while I’m clearly not James Halliday, I’m also not a hermit. I’m not a hugely powerful wine influencer, but I’m someone they think would be handy to have on their side. In their database I will probably look something like this:

  • Name: Matt Granfield
  • Property: http://www.e-cbd.com/zakazukhazoo/
  • Industry Authority Score: 1/10 (I have very little influence in the wine industry)
  • Social Authority: 6/10 (My Facebook and LinkedIn connections are bang on the median, but I have a larger blog following than your average Australian)
  • Industry Reach: 0 (I have no obvious wine industry connections)
  • Social Reach: 271 (the total number of social media connections I have)

If I like the wine, their stats will tell them that following is likely to happen:

  • I will buy 3 bottles each year for the next five years
  • Based on my social authority, I will influence 5% of my social reach into buying one bottle each
  • Based on my industry authority, I will influence 5% of my industry reach into buying one bottle each

So, presuming the average price of a bottle of wine is $15, and they’ve already sent me 12 of them, you can use the following equation to figure out the value (ROI) of the social media pact I’ve made with Kirrihill:

ROI = 3 x 5 x $15 + 271 x 5 ÷ 100 x $15  + 0 x 5 ÷ 100 x $15 - $15 x 12

ROI = $248.25

So, Kirrihill Wines will make about $248.25 from me this year. That’s not too bad really. Obviously the figures I’ve used are examples, but they’re probably not far off the mark. I’ll report back in 12 months time and let you know if I’m right!

P.S. It’s good to see Kirrihill Wines have taken my advice and put a tear-off tag on the back of their bottles so you can remember what wine you drank. I’m claiming full credit for that one, even if I find out the labels were printed before I mentioned it.

P.P.S I love the packaging, and it’s nice to see they are launching a range of wines called ‘companions’ with a social media marketing campaign. Bloody marvellous work and full credit to Network PR.

Marketing Cigarettes

Friday, August 8th, 2008

Brands like people to have good experiences in association with them. Coke, for example, want to be there when you’re having fun with your friends at the beach. Meat and Livestock Australia want you to come home to a beef casserole after you’ve been playing in the rain with your friends in winter (kudos to MLA and BMF for a great campaign). Marketing departments think that if they can plant their brand into your wonderful memories, they’ll be remembered fondly by association. It works. But there’s also a flip side. If your brand is there when people aren’t having fun, you’re a little bit screwed. Cheap bourbon is reponsible for more ‘first hangovers’ among teenage girls than any other alcoholic beverage in the world (I have no statistical evidence to back that up, but I’ve asked around), which, I dare say, is one of the reasons Jim Beam doesn’t even bother trying to market its product to women.

Imagine then, if your product was scientifically proven to kill and associated by most of the population with death. Don’t get me wrong, this can be a huge advantage, if you are, say, Lockheed Martin, but not so good if you are the maker of a consumer product. Cigarettes will, in fact, kill you. Phillip Morris makes more of them than just about anyone else.

I wouldn’t work in Marketing for Phillip Morris if they paid me $1,000,000 a year, but plenty of people would. For that reason they have some of the most highly-paid marketing executives in the world and they aren’t short on talent. Their brands are associated with death and sickness, but they can’t spin this with advertising, they can’t sponsor anything, they are forced by legislation to put graphic images of the diseases they cause on their products, they won’t show their products in films, people can’t even use them in public and they are taxed heavily by governments. Devising marketing strategies for Phillip Morris would have to be up their on the difficult scale with being the New York PR rep for Al Qaeda.

Virtually the only marketing avenue left to Phillip Morris is online. Even on the vast open plains of the wild world web they’re still doing it tough. Google any cigarette brand and see if you can find an official website with traditional marketing material. You can’t. Check out what they have to do instead. Despite being inside a maximum security marketing prison, somehow, somewhere, sometimes, people still smoke. Millions of them. Despite the best efforts of government health departments to get people to stop, smoking rates in the USA have decreased by a measly 2% a year for the last decade. Pear consumption in Italy could have decreased by that amount an no-one would have noticed.

The best marketing strategy in the world is to make a product that people with elevated social status think is cool. If the cool people have it, everyone else will want it. The second best marketing strategy in the world is to make your product addictive.

Marketing Triple J: 21st Century Communication Strategies for Radio

Wednesday, July 30th, 2008

I was in Melanesia last week, chiefly to climb a volcano, but also to have a good long chat about marketing strategy with Stuart Mathison, who is the Head of Operations of the National Bank of Vanuatu. Stuart is a client of ours and he’s got a problem. He is responsible for running an (underfunded) government-owned organisation that is duty bound to provide a loss-making service to a rural nation, but he also has to compete for profit in the cities (where the money is) with a bunch of foreign-owned banks that have a virtually limitless PR budget and advertising spend. Stuart has a brilliant brand with some amazing stories (for example, their mobile banking reps travel on speedboats to reach isolated island villages), but in order to get the message out there he’s got to find some innovative and alternate ways of reaching his audience because he hasn’t got the money to compete with ANZ and Westpac. What he is going to do will make an interesting blog post one day, but it’s too early to say too much just yet.

It got me thinking though. The kinds of innovative marketing strategies the National Bank of Vanuatu are going to have to put in place aren’t that different from the kinds of strategies that can be employed by underfunded government organisations around the world. One of those that is quite dear to my heart is Australia’s national youth broadcaster Triple J. When I started this blog I had a long list of things I was going to write about, one of which was going to be a series of posts on how to use digital strategy to market a range of different organisations circa 2008. ‘Bank’ was on that list, and I’ll get there one day, but I think a more interesting post for the moment would be ‘how to market Triple J’.

Triple J is the youth arm of the Australian Broadcasting Corporation, encompassing a national radio station, some TV shows, a magazine and a number of websites. It has a lot of diehard fans and a national audience numbering in the hundreds of thousands, but in an era where iPods, online file-sharing and YouTube have become the kids’ tools of choice for finding and experiencing music and entertainment, Triple J’s marketing team has its back against the wall. It needs to fight back, and it needs to change the way it operates.

Triple J’s aim is not to win the ratings war, and it shouldn’t be, but the more people it can reach, the better it will achieve its goals under the ABC charter, namely: encouraging and promoting music and the arts, informing and entertaining the youth of the country and contributing to a sense of national identity that reflects Australia’s cultural diversity. The yardstick shouldn’t be ears listening to any particular radio program or eyeballs viewing a show, it should be how well the organisation achieves its goals. It goes without saying that it has a much better chance of achieving those goals successfully if it can win over people who aren’t currently paying attention.

There are a number of groups of people who aren’t currently paying attention and Triple J’s marketing and branding goals should be to wake them up, they are:

  • People who listen to competing stations and consume other competing media
  • People who listen to their iPods (and digital radio) instead of FM radio
  • People who consume online media instead of magazines and TV
  • People who currently listen to Triple J, but not as often as others
  • Bands and solo artists

And of course, that’ s not to mention the need to keep existing listeners and viewers informed.

Here’s what I think Triple J should be doing for each of those groups…

People who Listen to Competing Stations and Consume Other Competing Media

No matter how good Triple J’s bumper stickers are (‘It was either this or a Jesus fish’ was one great example), no matter how much media attention the (brilliant) ‘Beat the Drum’ competition gets and no matter how many promos Triple J runs for itself over the airwaves and on ABC TV, it’s not going to make any significant impact on those who are currently listening to competing stations and consuming competing media. For these people, it’s a matter of programming choice and content. The only way you can make them change the dial is to change their taste.

It’s possible to change people’s taste, but it’s hard.

Fashion changes because Hollywood celebrities are paid to wear the latest trends, and the cool people (the trend-setters in their social group) pick up on them. Eventually the styles find their way in to mainstream department stores like Target when managers are comfortable that a style has become middle-of-the-road enough to sell in large quantities, but by the time they do, the cool people have moved on. Music works in much the same way; a few artists out on the cutting edge set the new trend and eventually, mainstream radio picks up on it, but not before something newer and cooler has come along. It’s Triple J’s job to be at that cutting edge, to find the new music and test the waters, and for that reason you’re never going to hear Triple J playing in Target. However, Triple J should be pushing harder to get played in more clothing stores, more cafes, and more shops where the trend-setters are listening. Triple J should be using use social media to reach people like Cam Hill with more innovative approaches – it should be using the cult of celebrity to use its personalities as brand ambassadors who connect directly with their audience. Zan Rowe is doing a great job with her blog, and Marieke Hardy has only recently shut up shop, but a lot more could be done.

Sponsoring gigs and festivals is excellent brand re-enforcement, but I doubt it’s doing much to win over people who aren’t already listening. You still need to preach at the choir, but you need better evangelism if you’re going to reach the masses.

People who Listen to their iPods (and Digital Radio) Instead of FM Radio

Over 150 million iPods have been sold, white earbuds are ubiquitous on public transport and these days even budget car manufacturers are installing MP3 player docks as standard accessories. Record labels have virtually given up trying to fight P2P file sharing and virtual stations like Last.FM, Yahoo Music and MySpace are increasing listenership at astonishing rates. People who know what they are talking about are claiming that music radio is dead.

As music industry commentator Bob Lefsetz put it:

“Radio listenership has been declining for years.  Is it coming back? You now hear about music from your friends.  Or in chat rooms, blogs or other virtual worlds.  Every band known to man has a MySpace site where you can experience its wares … in an era where you can pull up a station’s playlist on the Net, why do you have to actually listen (to the airwaves)…”

Marketing guru Seth Godin recently spoke with some unique insight on  the future of radio as well and it’s well worth reading.

The fact is, Generation Y doesn’t listen to radio like their parents (or even their older cousins) did. They know how to get (almost) every song in the world online for free and if they want to hear something new radio is the last place they need to look. In our office there are nine people and I usually get to work before all of them. As everyone arrives in the morning I watch everyone over 25 tune in their radio and everyone under 25 either plug in their iPod, or cue up MySpace.

FM radio can’t compete with digital media if it wants to reach Generation Y.

The station is lucky it doesn’t have to try and sell ad slots over airwaves to survive; it can innovate and it can do so quickly, long before competitors Austereo and DGM wake up to the stark reality of the situation. Streaming popular shows online is a good start, as is the excellent Unearthed website. But so much more can be done. I’d like to see an audit of the Unearthed website to see how many people are actually streaming music regularly. I’d then like to see what happened if the site was opened up so that artists with record deals could stream their music too. My guess is that if Triple J got serious about streaming more popular music online it would quickly become a market leader and win back those people who stopped listening to traditional FM radio long ago. If Triple J put all Australian music in one spot people wouldn’t need to use MySpace or Last FM as their radio station.

People who Consume Online Media Instead of Magazines and TV

The same principles apply to this group as they do to those people who’ve stopped listening to traditional FM radio. Triple J needs to become a much better digital content aggregator. Heywire and the Triple J forums are great examples, but I’d be curious to look and learn from some figures and see just how effective and popular they have been.

Triple J has to learn that putting  more content from JMag online won’t cannibalise sales of the printed version, they’ll enhance it and increase the reach of the J brand. People still (for the moment at least) want good-quality hard-copy magazines to read on the train, on the bus, on a plane and at the beach. If they want online entertainment they’ll go to YouTube, they won’t bother reading long articles, and if they do go online to read long articles, giving them more of J Mag online will encourage them to buy the next edition of the paper copy next time they’re waiting for that train/bus/plane. I’m willing to be wrong about this, but I’m pretty certain I’m right. Others agree with me.

People who Currently Listen to Triple J, but not as Often as Others

I’ve been listening to Triple J since 1994 when I was 14 years old and it first came to the small town on the NSW South Coast where I grew up. Not once has the ABC asked why. I can’t remember the last time the station did a survey into what their listeners were doing, what else they were listening to and what would make them listen to Triple J more.

Is Triple J sure the current music selection is hitting its mark (I happen to think it is, but they should be asking)? Is there a more appropriate time for a half-hour youth-orientated current affairs program than 5.30pm when the bulk of the nation’s working population are driving home from their jobs and in the mood to relax? Do people want to play the station at work (or in their café or shop) but can’t because their bosses don’t like the swearing? Are kids listening to Triple J in secret because their parents don’t like the content?

People who listen to Triple J ‘a little bit’ are the low-hanging fruit. They’re the ones who are most easily plucked for the richest rewards. The station needs to find out what it can do to make them listen more.

Bands and Solo Artists

Significant airplay on Triple J can make or break an artist’s career – read Wikipedia’s summary on that if you don’t believe me. Bands that get a break on Triple J praise the station loudly and often: Those that don’t criticize its lack of transparency. Artists are potentially the best and most vocal brand ambassadors the station has. They have the power to tell people to listen, watch, and read, so they need to understand how the station’s programming works. As an organistion with enough influence to make (or perhaps break) their dreams, Triple J has a huge responsibility to treat them with care and respect, it shouldn’t be lefty to a third party website like JPlay to be the information disseminator.

The Unearthed website is a brilliant avenue of communication between the 10,000+ listed unsigned artists and the station, but there are so many more bands, singers and songwriters with minor (and major) record and publishing deals achieving success around the country who aren’t eligible to be on the site that have no idea why their music isn’t on Triple J. It’s not reasonable to expect that station management provide individual feedback to every single one of them, but it seems strange that there can’t be an unearthed-style website available for everyone, whether they have signed a piece of paper or not. Every band under the sun streams their music for free at MySpace, Triple J should be providing the same opportunity under its own banner – I’m certain that Australian artists would embrace the Triple J brand, which has done so much for Australian music in the past, over Rupert Murdoch’s multinational goliath. If you could make Triple J the source for online Australian music you would kick every marketing goal under the sun.

While they’re at it, is there any reason why Triple J can’t offer artists the ability to sell their tracks online and take a small commission from the proceeds? Is there a reason Triple J can’t become the iTunes of Australian music and MAKE some money in the precess? I realize there are commercial regulations at play, but if it can sell Hottest 100 CDs, promote music festivals, support tours, promote gigs, sell ads in their magazine and feature albums each week, all of which lead to considerable commercial gain for the parties involved, surely there’s some sort of workaround to helping Australian artists sell their music online? There’s a desperate need out there for a place where independent artists can sell their music (or give away for a donation like Radiohead and Nine Inch Nails are doing). If you provided that mechanism you’d get every Australian artist on side you’d have a hugely powerful army of brand ambassadors working for you.

Keeping Existing Listeners/Viewers Informed

I won’t go into too much detail about how Triple J can better keep existing listeners and viewers informed because the existing marketing and communication strategies are pretty good. As a media outlet they can do all the internal promotion they like on radio, in print, online and on TV. They could probably do an audit of how many people are reading the emails they send out, what the magazine circulation is, how effective their Facebook and MySpace presence is, what the effective reach of festival and gig sponsorshop is, and what sections of the website are most popular, but I’m presuming all the appropriate tracking mechanisms and metrics are in place and this is a no-brainer.

In Summary

Triple J has done more for the Australian music industry than any other organisation I can think of. Like the National Bank of Vanuatu they have some amazing stories to tell, but they have to compete against some hugely powerful (albeit diminishing) commercial organisations who watch their every move, piggy-back on their successes and then poach their best talent. Triple J should be using its advantage and irreverence to innovate and start staking new ground. I’m not claiming to know the organisation’s needs inside-out, but there’s some little seeds they can start planting now that will in all likelihood grow into much bigger things in years to come.