Digital marketing: Fee or free?

EMI, home to Coldplay and Joss Stone, is behind a number of mobile
marketing campaigns aimed at learning more about its listeners. It has
worked with Vodafone and more recently T-Mobile on trials of
advertiser-supported mobile content, whereby consumers were offered
access to free videos from artists including Lily Allen (pictured) and
Robbie Williams if they watched TV-style ads that ran before and after
the content.

Coke Zero, Gillette and Nike were among the advertisers involved in the
T-Mobile trial, which formed part of a wider test alongside
collaborators providing sports, news and entertainment content. 'We all
wanted to see whether consumers would watch advertising on their
mobile,' says Owen Hanks, UK sales director at mobile ad technology
provider Rhythm NewMedia, which supported the test. 'This approach
offers added value, and helps us get content in front of more
eyeballs.'

It is hoped that as effective as the mobile phone can be for promotional
work, such as advertising a new blog, it will prove equally so on the
commercial front, such as selling video clips and downloads. As Dan
Duncombe, head of digital media at EMI's Parlophone label, says: 'Our
business is based on three-minute bites, whether it's promotional or
revenue-generating, which stands us in good stead.'

The trial will help answer some of the questions that EMI has about
mobile content. 'The ad-supported model is great in certain
circumstances, but we're not sure yet whether mobile is the right place
to put it, seeing as 3 is selling our videos for 99p a go,' explains
David Gould, EMI's head of mobile sales. 'Is ad-funded going to take up
the slack between 99p and free? We don't know the answer.'

However, EMI is optimistic that mobile as a whole could be a fruitful
channel. 'The great thing about it at the moment is that people are used
to spending money on it, so we have an opportunity to monetise our
content through that,' says Gould.

Ad-funded content is not the only method the record giant is looking at
in terms of generating revenue through mobiles. Having experimented with
mobile marketing early on, EMI is profiting from a more direct route to
its consumers, and has been able to capture valuable data and then
upsell content via artist's mobile-internet sites.

A recent partnership with Flytxt saw EMI begin to use the mobile
specialist's Neon platform to run campaigns that its marketers could set
up and manage themselves. The platform is integrated with WAP partners,
email service providers and internal CRM, becoming a hub for data. 'You
can log in, access data and deliver a campaign in 30 minutes,' explains
Flytxt vice-president of client services Adhish Kulkarni.

EMI has also just announced a deal with mobile media content distributer
ShoZu to let artists with ShoZu-enabled phones transfer photos and video
clips to a variety of websites. The idea is to allow fans to upload the
content to their own sites or blogs, effectively creating a feed of
artist-branded content.

One artist who has seen the benefits of embracing digital as a marketing
tool is Lily Allen. She launched herself chiefly through MySpace before
signing to Parlophone in December 2005. Her most recent single, Shame
For You/Alfie, which launched in March, was backed by a pay-per-click
mobile ad campaign. Fans could download a free animated screensaver, and
instead of a traditional flat fee, Parlophone paid only for active
clickthroughs to Allen's WAP store.

'Using mobile marketing we can see patterns of buying, capture data and
remarket back to fans. There's a real connection,' says Julie McNally,
director of mobile media agency New Visions, through which the campaign
was booked. A call to action to Allen's WAP site has been included in
every release, at point of sale, in artwork and in advertising. On the
site, fans can access free wallpapers and voice messages and take part
in competitions - all of which helps drive data capture and upsell the
content on the store. The campaign has helped persuade more than 16,000
fans to register on the site.

While the most obvious sale to be made via mobiles might be songs, at
the moment the data charges remain too high. 'The consumer might not
realise what the size of the fee is until they get their bill and the
artist would probably get the blame,' says Gould. 'That's the
relationship you're trying to protect.'

Duncombe adds that this type of issue is preventing EMI from doing
everything it would like. 'Mostly we are running trials to see what's
working with individual artists so we can get a better idea before those
barriers come down,' he says. The label also knows it must tread
carefully with regard to the communications it sends out. 'This is a
greater invasion of privacy because it is direct to the consumer's
pocket,' says Gould. 'We've tried to apply CRM best practice and not
bombard them.'

With each test campaign, EMI has developed a clearer idea of how people
consume music, and how willing they are to pay for content. While the
label is conscious of balancing free and paid-for content to engage
those consumers and keep them happy, EMI's digital revenues have
climbed, with mobile one of its fastest-growing areas; the group's
revenues from mobile products increased 154% year on year in 2006.

The extent to which EMI can continue to sell content before it has to
start giving it away is not yet known, but what is clear is that it will
always try to sell first. 'We would rather not run a competition without
an opportunity to upsell,' says Gould. 'Where possible we want people to
see there's an opportunity to buy.'