Just about every marketer in the live entertainment business is tapping into the transition from traditional to social/mobile marketing, including Live Nation Entertainment, the world's largest promoter. But as these means of marketing take hold, the sheer size and scope of Live Nation on a global level will move this transition forward in ways that will ultimately forever change how live events are marketed. A concert is a social experience: It always has been driven by word-of-mouth, and social changes that game exponentially.
In its third-quarter investor report, Live Nation said that $125 million in its marketing budget has gone to social media and the company plans to double that for 2013. Early tests with acts ranging from Swedish House Mafia to P!nk or Ticketmaster's RSVP program show that when news of a concert or tour goes out into the social world, "we're getting a higher engagement and a higher conversion," Live Nation CEO Michael Rapino says.
"We believe in going to where the people are with Facebook, social and online, where we have a much more targeted approach to marketing a show," he adds. "We believe it's just the efficient medium we could advertise on."
This isn't about adding social to a traditional marketing mix to sell a few more tickets; this is about coming out of the gate with a strategic online campaign. "Instead of a radio spot, why not start with, 'How do I get to the 44 million people that like P!nk on Facebook who want to know about the show, get them motivated to retweet the photos, press releases, the information to their group of 250 friends, to create that spiral effect of committed fans helping you spread the news to other like-minded friends?'" Rapino says. "That is a much more targeted approach, and we're seeing through tests that we can convert casual consumers more directly in that manner."
Word-of-mouth has its shortcomings, even when powered by the Internet. "You're not going to get someone who doesn't like P!nk to go to the show, and the committed fans are already going," Rapino says. "But everyone has what we call that 'Julie cruise director' of friends, the person that says, 'Hey, let's all go to P!nk in March at the Staples Center.' And if he spreads the word among his people, maybe from his 100 friends, he picks up four people that weren't thinking of going but will now go because their buddy says they should go. We can use fans to truly be marketing voices and reach more fans than we could ever reach with our [traditional marketing] budgets."
Social media is an inexpensive marketing spend because, first, "it's cheaper to buy and use and place ads on Facebook than it is to buy print and radio," Rapino says. "The cost of doing marketing for us-comparing the radio spots, the TV spots, the print ads, the billboards, the 32 different versions-we have a lot of production costs that go into the marketing of these shows."
Live Nation will build up its digital team and Rapino says the company will "lead the industry in having a very high-level centralized and local team that knows how to place, buy and market on a social/online basis. We will really lead with that next year and convince as many artists as we can to take some of those dollars they want to spend traditionally and start spending more online."
"Mini-campaigns" through social for acts like P!nk, Swedish House Mafia, Maroon 5 and Rihanna are stimulating impressive returns, Rapino says. "You can't look at that and not think, 'Wow, I should probably be spending more on online and in social than I should be on print and radio right now."
The live business is somewhat behind the curve in adapting to new marketing methods, Rapino believes. "We have not had a ton of innovation and marketing in the concert industry, much like the record industry," he says. "We have been a fairly old-school business compared to Coca-Cola and the big packaging/marketing companies."
That will change quickly, Rapino says. "This is the first time we can really look and say, 'Social media can actually drive awareness and motivate some casual fans to go to the show in a way where before we had no other approach other than shotgun print ads and radio spots that are noneffective in getting the casual consumer off the couch."••••