Welcome to HIT BRANDS. This book will help provide tools, insights and strategic thinking for how to create lasting and valuable connections with consumers through music.
Brands have challenges
Nestled somewhere in an innocuous office building in a neighbourhood wedged between the Upper East Side and Yorkville, just off Manhattan's Central Park, is the financial news and opinion website called 24/7 Wall Street. The reporters for 24/7 Wall Street spend their days publishing opinion pieces on the health of companies, stocks and investment opportunities. These articles get republished all over the web on sites such as MarketWatch, MSNBC, MSN Money, Yahoo! Finance and The Huffington Post. In June 2012, one such article began to ruffle the feathers of those whose job it is to help consumer brands stay relevant to their audience. The article provided a prediction of ten American brands that would fail in 2013. The list included some landmark consumer brands such as American Airlines, Research In Motion (better known for its product, BlackBerry), Avon, Talbots and at least one sports franchise, The Oakland Raiders. The article cites operational issues, changing competitive landscapes and management deficiency as the primary drivers of impending failure. Prior predictions by 24/7 have proved surprisingly accurate.
There exists today an entire industry employing thousands of people whose job it is to help brands maintain a healthy relationship with their customers. We call this industry by lots of names: advertising, marketing, branding. It is a challenging industry as it is, without financial experts predicting your failure. The good news is that consumer brands generally recover from public failures. In 2007, McDonald's launched an ill-advised 'I'd Hit It' tag line, while The Cartoon Network launched a publicity stunt to promote 'Aqua Teen Hunger Force'. which resulted in a bomb scare in Boston. Both brands rebounded and today are as relevant as ever. Even Coca-Cola recovered from what is widely considered the single biggest brand failure, the launch of New Coke in 1985. Every healthy brand encounters on a daily basis often staggeringly complex challenges trying to stay relevant to consumers while still turning a profit for their shareholders. Launching a new brand in this cluttered market place is even more difficult than maintaining a known entity.
In addition to publicity stunts, advertising slogans and new product launches, brands have hundreds of ways to reach the world across multiple media outlets including social media, online, tele vision, radio, print, apps, retail, outdoor events and more. Attached to many of these initiatives is an audio or musical component - the ever-present indie song in a TV commercial, the background music playing while you shop, the quick audio sequence that aligns with a product's logo (think Intel's chime). Brands will invest in sound and music across their entire marketing and communications platform and are often struggling to know whether they have got it right.
On average an international brand spends annually some where between $10 million and $20 million on music-related rights and licenses. They then multiply that spend by a factor of five through media dollars. This means that a big brand's annual spend, estimated conservatively, is between $50 million and $100 million, specifically allocated to help associate themselves with music and musical talent. How many of those brands become famous for their use of music? How many of them create the kind of value for that investment that their stockholders would want? How many of them create lasting, valuable connections with customers through this music? How many of them have hits?
Put another way, how many of those brands even know the odds for or against success? How many of them have learned how to move those odds in their favor or tried to understand the rules of the game? Have these brands even developed a strategy for using music? If having a hit is a crapshoot, a brand should at least know when and how to roll the dice.
Based on the issuance of ISRC codes (the international standard for identifying music recordings), a reasonable estimate puts the number of new pieces of music released each year at a staggering one million. Each song is written in the earnest belief that they have something to say and can enhance the human condition. If we make a reasonable assumption that around 500,000 artists are involved in these one million tracks then we can easily start to calculate the base chances that any brand-band association will become a 'hit'. We start at 500,000:1 - about the same odds as being dealt a royal flush in poker.
Consider a brand that chooses to use an older, preexisting piece of music rather than a current band or artist's track as part of their music strategy. Our best guess at the total volume of stereo-recorded music in the world is around half a billion tracks. Now stand back in wonder at how any artist's song makes it on an ad and realize that it's not 'selling-out'; it's like winning the lottery, only nowhere near as lucrative.
We know that the chances of having a 'hit' are small to very small, but brands are still willing to roll the dice and take a chance. And there is something to be said for a meaningful connection with music that is neither a hit, nor a failure, but rather a standard part of any brand's portfolio. As long as brands want to use music, it's a moral and commercial imperative for the industry that we represent to help provide some tools; some insight and strategic thinking that will help marketers to cut down the odds to manageable levels. There is no such thing as a certainty but a little bit of clear thinking can certainly make success much more likely. And that's one point of this book. It is not a guarantee for creating brand value through music but it is a playbook, a form-guide and a 'method': We will lay out a bunch of success stories for you and try to help you move the needle in your favor, whether you are an artist trying to find opportunities or a brand trying to make the right decisions.
Remember, there is no trademark on an idea and what you read here can be stolen and used again. But also remember, there is no guarantee that any of these ideas will work as effectively once you take them and try to make them your own. After all, an idea contributes to maybe 5 percent of the success of a venture, 95 percent is in how you execute it. So, good luck to us all, we'll need it. But before we roll the dice, let's go and learn the rules of the game.
Daniel M Jackson - CEO, CORD
with Eric Sheinkop and Richard Jankovich