Montetizing the Social (from left): Marcus Whitney, CTO/entrepreneur, Moontoast; Andrew Mains, VP Artist and Label Relations, TopSpin Media; Mike Doernberg, Co-Founder/CEO, ReverbNation; Patrick Faucher, Founder, Nimbit; J Sider, CEO, RootMusic; Brian Peterson, co-founder, Bandbox; Michael Sloane, Cofounder, Strategic Blend. (Photo: Beth Gwinn)
Move over, MySpace. The Facebook revolution is in full swing, and artists and labels have many tools to launch into social commerce.
"There's a huge different between MySpace and Facebook," ReverbNation co-founder/CEO Mike Doernberg said during the "Songs in the Stream: Social Commerce and the Future of Online Retail" panel at Monday's Billboard Country Summit in Nashville. MySpace let you post music while letting you amass friends from whom you never received messages, he said. "It didn't work so well, did it?"
While the panelists may have disagreed on some of the finer points, they were in agreement that Facebook has radically transformed social networking and will eventually change how artists sell music and merchandise. Facebook is so important because it's where just about everybody hangs out, explained J Sider, CEO of Facebook marketing service RootMusic. "You're dealing with the consumer where they feel comfortable."
"Social commerce is the ultimate way for people to trust other people's opinions to find out about what they're doing," said Andrew Mains, VP of artist and label relations at direct-to-fan company Topspin Media.
But people using Facebook may have a lot to learn, judging from one example during the panel. When Marcus Whitney, CTO of social commerce platform Moontoast, asked people in the audience who had heard of EdgeRank, nobody raised a hand.
As Whitney explained, EdgeRank is a score given to Facebook users that determines what posts are seen in a friend's "Top News" feed (Facebook defines it as affinity *weight* time decay).
Because of EdgeRank, Facebook users need to be mindful of how they communicate with fans. Marketing messages mixed in with engaging posts from the artists can perform well, while a Facebook page with a marketing department-like approach to fan communication will get less visibility and lower conversion rates, he explained.
"There are a lot of different factors that are very much in your control in terms of how many transactions you can do inside Facebook," Whitney said.
And just because you send a message to two million fans doesn't mean it will be seen or appear the "Top News" feed -- of two million people," Sider added. "You have to make sure you're posting really relevant content and people are coming back and wanting to interact."
How Facebook should be used depends on the particular goals of the artist, Faucher argued. He explained that Nimbit user Suzanne Vega started to reissue her back catalog and get 10 times the results on Facebook as she did on other channels -- but in terms of promotion, not just sales. "It may not lead to a direct purchase at that first interaction, but it does down the line," Faucher said.
But Whitney was less sanguine about trading current promotion for future sales. The best way to create value out of fan relationships is to turn them into a consumer, he argued. "You never know what's going to happen in this environment where you don't pay for anything. The quicker you can turn that 'like' into an actual customer, the better."