Topspin™

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

Kudos to David Byrne (and Brian Eno) and Eminem for walking away with a few of those coveted gold Gramophones at the 52nd GRAMMY Awards last night. It’s been a privilege to have both of these extremely talented artists release records on the Topspin platform, and we’re proud to see them awarded for their amazing work.

If you haven’t been following along at home, Eminem picked up two GRAMMY Awards for ‘Relapse’, one for Best Rap Album, and the other for Best Rap Performance By A Duo Or Group (with Dr. Dre and 50 Cent) for the single, ‘Crack A Bottle’. Eminem released ‘Relapse’ directly to his fans on eminem.com in a variety of exclusive digital and physical packages via Topspin in May 2009. (’Relapse: Refill’ was also introduced via Topspin in December 2009 with the addition of a variety of exclusive shirt designs bundled with the record.)

David Byrne & Brian Eno’s ‘Everything That Happens Will Happen Today’ won the GRAMMY Award for Best Recording Package, with art direction by Stefan Sagmeister. Sagmeister’s design for ‘Everything That Happens…’ included a fabricated tin for the deluxe version of the record, and was released exclusively via the Topspin platform at everythingthathappens.com. If you missed Ian’s unboxing of the ‘Everything That Happens…’ deluxe package, check it out below.

As many of you know, we’re big proponents of deluxe offerings here at Topspin. Artists who’ve released albums directly to their fans in a variety of digital and physical packages using Topspin typically see deluxe offerings account for as much as 40% of total unit sales and north of 50% of gross revenue in some cases. Don’t force your fans to settle for the one-size-fits-all version of your record at retail – create something special they can only get from you.

Congratulations again to David Byrne & Brian Eno, Eminem, and all the GRAMMY Award winners and nominees for putting out some great music this past year.

Gary Brotman
Topspin

[photo of Carlton by billwhit427 via Flickr]

Bon jour from Cannes, France, home of MIDEM!

We’re at MIDEM this year learning more about fellow startups, discussing the future of the music business with veterans of the industry, and meeting friends new and old discussing opportunities for Topspin. But we’re taking a break from shouting over the DJ this evening to welcome a variety of content partners into the Topspin family.

In the past you’ve seen Topspin work with artists on large and small labels as well as artists with no label at all. Tonight we’re formally announcing partnerships with labels large(r) and small(er) including Universal Music Group, EMI Music, Atlantic Records, ATO Records, Real World Records (UK), Dangerbird Records, Nacional Records, Thirty Tigers, and The Eleven Seven Music Group, as well as additional management companies such as Silva Artist Management, Jampol Artist Management, Inc., Goliath Artists, The Artists Organization, Supervision Management (UK), Maine Road Management, and Red Light Management. We’re also working closely with distributors as they expand their services including Fontana, Caroline, [PIAS] Entertainment Group (Europe), The Orchard, INgrooves, IODA, and TuneCore. <infomercialvoice>But that’s not all!</infomercialvoice>  We’re also very happy to be added as an arrow in the quiver of many marketing services companies from EMI Label Services, which serves independent labels and artists, and William Morris Endeavor Entertainment, to [PIAS] Digital Marketing, Terrorbird Media, On Target Media Group, Toolshed, Radar Maker (UK), Media Junction (UK), and many others. Sorry not to list every partner in this already-too-long paragraph (we lost count at around 60 partners), a complete list lives elsewhere on our Web site.

Despite the length of the previous paragraph we’re far from finished; there are countless folks we we simply haven’t had time to connect with yet. If you’re one such company we’re pleased to invite you to Topspin Content Partner Day in our Santa Monica, California office on February 25th. Any content partners we aren’t already working with are welcome to visit, break bread, meet the team, get a demo of the platform, ask any and all questions you have about who we are and what we do, and sign on up. Interested? Please drop us a line and we’ll reserve a place for you.

I’m sure some of you are saying, “Hey, wait, Topspin is partnering with labels? I thought the point was that people didn’t need labels in the future?” I’ve said this before and I’ll say it again: I’m actually a believer in the core value labels offer, and while I’m 100% certain labels will change one hell of a lot in the coming years (as any business that is shifting from physical to digital will) I don’t think labels are going anywhere. Artists need partners. They need cash flow so they can concentrate on art and they need people with expertise and relationships to help them market to their audience. The good news is that artists have more choice than ever before — it’s not a “no label no success” world in the future. But there is no question that labels of all sizes will continue to help artists create art and reach fans. Topspin is a marketing tools platform. As such, our customer is whomever is doing the marketing. Sure in some cases that might be the artist themselves (I can’t tell you how proud I was when John Forte told me he logs into his Topspin account every day to see what’s going on with his fan base) but in most cases someone else will be marketing on the artist’s behalf, be that label, distributor, third-party marketing company, manager, sister, or cousin. Professional artists hire professionals, those professionals will need professional tools, and we hope Topspin will be their tool of choice.

What does Topspin’s software do for these marketers? Topspin is a software platform for direct-to-fan marketing and retail. We make it easy to build awareness, acquire fan connections, manage direct/permission marketing, enable fans to market to fans, and get your content into the places people discover music. Once fans are excited about what you have going on, Topspin makes it easy for them to express their excitement with their pocketbook by purchasing your art in the form that most suits their level of fandom (digital, physical, tickets, experiential). Most importantly, we cut checks to artists every 30 days, millions of dollars in 2009 alone.

But don’t take my word for it, I’ll let one of our partners, Metric’s manager Matt Drouin, do the talking:

“I already consider Topspin to be a cornerstone of our current Metric strategy, and as we move in to the future I foresee its importance to our business growing exponentially.

The platform has certainly surpassed our expectations so far, delivering 6 figure revenues where none had existed for us before, and that within only months of releasing the last record. To me that’s incredible in and of itself, but the true value isn’t just in the incremental income Topspin has allowed us to unlock, but more importantly in the ability Topspin has afforded Metric not only increase its margins on each sale by going direct to fan, but in being able to own that relationship and superserve our fans in the process by offering them more value for the same or less money.”

Thanks, Matt. Seriously. That email made two years of nearly 2x more work hours than sleep hours every week worthwhile.

We’re incredibly grateful to have the opportunity to work with so many talented partners, all of whom have been marketing music long before Topspin wrote its first line of code. Thanks for welcoming us in and trusting us to be your technology partner and R&D resource. We have a talented team of engineers and artist services staff who are busting their asses overtime every single week building tools and techniques to profitably connect artists and fans. We know there will be bumps along the way — I can’t even count the number of mistakes we’ve made already on my fingers and toes, and we’ll make more as we push forward — but we appreciate your belief in what we’re doing. We’ll make you proud. I promise.

ian c rogers
Topspin

Last year at MIDEM we had our first annual Topspin meetup with our friends from Hypebot. We spent $0 and it was a success IMHO, a packed room with Digital Music News reporting it as “the place to be”. I was satisfied as we made what I consider to be the anti-dot-com maneuver, drawing a crowd with the lure of quality conversations instead of free drinks and light-up stress balls. It was incredible to see the support of the MIDEM community for this sort of Facebook/Twitter-organized DIY event. Thanks sincerely to all who attended, it was you who made it great.

So it’s no surprise we’re doing it again next week. Please join us Tuesday evening at 10 Rue Teissere, Cannes, France for the Topspin Meetup MIDEM. Hypebot is in with us again as is a company who is still stealth and I’m not supposed to mention yet (but their name is mysteriously on the Facebook invite). We’ll be next door to where we were last year, at Morrison’s Lounge, Tuesday night from 7:30pm onward. For details and to RSVP visit the Facebook page for the event. Please come and say hi!

On a related topic…

How many of you have read Kill Your Friends? I gave it to a few friends and colleagues for the holidays this year. It’s an entertaining read, a twisted and at-times-hilarious caricature of the excess of the 90s music business, set in the UK. Imagine Trainspotting set in the UK music biz.

The chapter which takes place at MIDEM is worth the price of the book alone. The main character gets swept up in the mania of signing what he believes to be a huge smash hit, even though the chorus is “I want to suck your fucking dick”, while beating up the beat like a lunatic from The Jersey Shore, coked out at 5am on the dance floor. And that’s just one of the semi-funny / semi-sad “only in the music business” situations the book extols.

This might sound idealistic but while I found Kill Your Friends entertaining I also found it inspiring. It gives an excessive picture of yesterday’s music business that is easy to rail against, one it seems we can *all* agree isn’t the path forward. Of *course* it’s a caricature and work of fiction, but its picture is based on *something* and that something isn’t anything any reasonable human would bemoan the death of. I remember clearly almost exactly ten years ago finding myself in the presence of an exec from the old music biz who shall remain nameless as he was unapologetically (and unwittingly) acting lecherous to a female co-worker. It was then I realized it wasn’t just the business of music that needed changing, but the culture, too. Again, it sounds idealistic and judgemental, I know, but I admit I was inspired (again) by Kill Your Friends, even though it’s mostly a work of fiction. I am no saint by any stretch of the imagination but I do believe the generation of people inheriting the music business will do it differently, and would like to appeal to said meek to look at the culture and not just the business. The two are most certainly connected.

More from the “Putting our (lack of) money where our mouth is department”: We’re trying an experiment at MIDEM this year which could be a disaster but I have high hopes for. Q: What’s the opposite of everyone in your company getting 750EU/night suites at the Hotel Carlton? A: Cramming everyone into a house with six other people for 3000EU for the week. We’re spending 300EU/person/week to stay in a four bedroom house with 10 folks from fellow startups. Along with Andrew, Jan, Shamal, and me from Topspin we’ll have Anthony from Hype Machine, Ian from Songkick, Yancey from Kickstarter, and Cindy from MediaNet plus artist Sydney Wayser and her manager Emily White. Close quarters, yes, but also cool people, exactly the kind of people I’d like to stay up late into the evening refilling just one more glass, listening to Let’s Wrestle (Yancey), Gil Scott Heron (Anthony), and Big L (Ian), and talking about the future of music with.

It’s not much, but by being the opposite of Qtrax with our low-rent meetup and the opposite of Kill Your Friends with our youth hostel-esque summer camp-vibe accommodations it feels good to bring a little DIY startup culture to the most notorious boondoggle in the music biz. It’s so notorious, in fact, that at friend at Universal Music Group in the UK told me they are sending *no one* this year, which sounds to me like the pendulum swinging too far back the other direction. Maybe next year they’ll come out and do it for less than $1000, as we are!

See you in Cannes,
ian c rogers
Topspin

This morning I turned to my inbox, saw a message from Fela Kuti, opened it, and proceeded to shoot coffee from my nose.

In addition to a good morning laugh, the message, included below for your holiday pleasure, struck me as a simple, perfect example of an artist’s team using direct-to-fan to keep fans engaged with an artist’s creative persona.

Click on the postcard image below and you’ll be taken to http://www.fela.net/yeahyeah/, to listen, view and share the card.

Enjoy.

One footnote. Engagement certainly doesn’t preclude ecommerce opportunity. Note the click on the movie and where it leads, a page where one can learn more, listen more, download, or choose to explore product options. On the topic of ecommerce, through dozens of campaigns and hundreds of thousands of transactions over my career, I’ve seen inclusion of even subtle text links / calls-to-action (e.g., “more fela”) increase click-through by hundreds of percentage points. Smart, or dilutive of the primary engagement goal in this case? It’s up to you to know your audience and their peculiarities, but what’s wrong with giving them a non-overly-overt path for more?

Have a Fela Holiday!
Adam
Topspin