Why Converse, Scion, Intel, PepsiCo, Others Are Spending Big on Underground Music
Why Converse, Scion, Intel, PepsiCo, Others Are Spending Big on Underground Music

During October's CMJ Music Festival, Rochester, N.Y.-based indie-pop band Joywave booked some free time in one of Brooklyn's hottest new studios.

The state-of-the-art recording space had more than enough features to make an upstart, unsigned band feel spoiled-brand-new Fender, Gibson and Music Man guitars; Yamaha keyboards; a Wurlitzer organ; and Marshall amps all donated from Guitar Center. There were speakers donated from Manhattan's legendary Electric Lady Studios. Even the artwork is cooler than the typical corporate studio-an original piece from Shepard Fairey adorns the entrance, while street artist Ben Eine lent his famous typography to the studio's exterior.

"We've driven by this a few times and I would never know this was a Converse studio," one of Joywave's band members says.

Converse's Free Recording Studio, Rubber Tracks, Opens

That's precisely the goal for Converse chief marketing officer Geoff Cottrill (@yogmoney) and dozens of other marketers who've sponsored music programs and events in recent years. Rather than just slapping their logos on a stage or signing up a dozen bands for tour endorsement deals, a growing roster of brands like Converse, Scion, Intel, PepsiCo, Red Bull and others are opting for more of a corporate-underwriting approach to music-from serving as a part-time label to funding original music videos to hosting recording sessions. And many are doing so with little expectation of a direct return on their investment-many marketers cite "positive buzz" or "cultural relevance" as their key indicators of success, not product sales.

"We're not asking for anything in return," Cottrill told Joywave during its visit to Converse's studio-the much-covered Rubber Tracks-located on the corner of Keap and Hope Streets in Williamsburg. "You own all this content. Why would we want to own it? We don't want to run a record label, because we make apparel and shoes. We wouldn't know how."

Even the brands that do have formal record labels, like Mountain Dew's Green Label Sound, find the proof-of-sales metrics to be less than empirical. Green Label has had first-run releases of new singles from bands like Holy Ghost, MNDR, Chromeo and Wavves but still has to work with their existing labels to coordinate exclusivity. And fans aren't going to see the members of Holy Ghost, currently on the road with a Green Label Sound-backed tour, cracking open a Mountain Dew onstage any time soon.

How Mountain Dew Saved Holy Ghost's Tour

"The music becomes decentralized so quickly, a lot of times it's not always the best analytics," Mountain Dew brand manager Hudson Sullivan says. "It's more about engagement, the conversation. Are people talking about GLS on Twitter, on Facebook? Are they positive or negative conversations? Are artists talking about it? Our artists become a barometer for the music community-through singles, videos, tour sponsorships, we can go back to them and gauge how much traffic we're getting."

Mobb Deep Kick Off Red Bull Music Academy's 'Five Out of Five' Hip-Hop Concert/Discussion Series

Mountain Dew's sister brand Pepsi doesn't have the same ability to rely primarily on social-media buzz as a sales metric. This past spring, the brand dipped to No. 3 in market share for the first time in decades, losing the No. 2 slot to Diet Coke, according to Beverage Digest. The brand was accused of blinking on its marketing strategy, supporting grass-roots initiatives like the Refresh Project in favor of Super Bowl ads and major TV advertising. PepsiCo quickly responded with a 30% increase in marketing spend across the company portfolio, including $60 million behind Fox's "The X Factor." In fact, Pepsi's first major TV campaign in three years premiered during "The X Factor," highlighting Pepsi's music campaigns through the years while showcasing the single "Tonight Is the Night" from emerging artist Outasight. Pepsi also sponsored Outasight's accompanying music video and helped book a performance by the singer on a recent "X Factor" episode.

Pepsi chief marketing officer of sparkling beverages Frank Cooper says the company wants to be a "much more integral player in the broader music ecosystem" going forward, helping connect the dots among music discovery, distribution and touring. "One thing we know for sure, and we hear this in virtually every quantitative and qualitative study, is that Pepsi and music are interrelated. Our brand equity rests upon it. And to that extent, brand equity allows consumers to go to the shelf and pull Pepsi over our competitors. And it allows us to maintain some premium pricing in the process."

Of course, brands like Converse and Mountain Dew are more niche brands and in more stable places in terms of sales. It was revealed during Nike's fourth-quarter earnings call that Converse's signature shoe, the Chuck Taylor, has grown from sales of 4 million pairs in 2004 to 70 million at the close of its 2011 fiscal year in June. Meanwhile, Mountain Dew continues to enjoy sales increases while its parent company PepsiCo's flagship Pepsi brand struggles to maintain market share against Coca-Cola. Even Red Bull, which has in-house record label Red Bull Records and an aggressive concert and tour sponsorship program, has grown to become a $5.2 billion brand in 2010, according to company figures reported by Business Week.

By these measures, there's less risk for healthy brands to invest in these kinds of music programs. Converse can afford to pay Matt & Kim, Soulja Boy and Andrew W.K. to collaborate on an original song and appear in ads, even if they can't prove how that song sells a single pair of Chuck Taylors.

So how to explain Scion? Toyota's niche, box-shaped car has supported metal and indie music since it was launched in 2002, but its sales have slumped in recent years. Since a peak of 173,000 in 2006, Scion finished 2010 by moving just 46,000 vehicles, according to Ward's Automotive. And yet the brand ramped up its support of music this year through its Scion A/V project. In the past three months alone, Scion A/V has released new music from acts like dance DJs Nadastrom, psych-rock band the King Khan Experience and grindcore group Wormrot; supported a fall tour (Check Yo Ponytail) featuring Spank Rock and Big Freedia; and hosted a two-and-a-half-day Music(less) Music Conference in Los Angeles. It's also prepping a mini-album from punk-rockers the Melvins in 2012.br />
Like Converse's Cottrill and Mountain Dew's Sullivan, Jeri Yoshizu-Scion sales promotions manager and head of the brand's music strategy-is equally ambivalent about research. "There is no measurement of a lot of initiatives out there. People can tell you that there's impressions, but there's no equation. There's no magic tool out there that says, 'Because you're associated with the Melvins you're guaranteeing a certain amount of kids to sell a car,'" Yoshizu says. "It's about awareness and familiarity. We let people know that Scion exists and that Scion sells cars. If somebody has that software tool that will show you exactly how that patterns down to sales, they're probably going to be a billionaire."

Vice Partners With Intel, Dell To Launch Noisey.com Music Site

One brand that is trying to match music marketing with tangible results is Intel, which teamed with Vice in 2009 to form a music, art and technology event series called the Creators Project. Starting with a launch New York event in 2010 that drew performers like M.I.A., Sleigh Bells and the Rapture, the Creators Project has gone on to include dates in London, São Paolo, Seoul and Beijing, along with a partnership with the 2011 Coachella Valley Music and Arts Festival. Such acts as Mark Ronson, Florence & the Machine and Justice have since headlined Creators events for exclusive performances, while Spiritualized, N.A.S.A. and David Bowie are among the artists who partnered with the Creators Project for exclusive installations. Unlike Converse, Red Bull or Mountain Dew, which turned to music strategies to strengthen their existing relationships with young tastemakers, Intel turned to music to start from scratch.

"We knew we had a problem with talking to young adults because our product isn't something you can touch and feel-it's built inside a computer," says Dave Haroldsen, who works for Intel's global partner marketing team and also serves as Intel's creative director on the Creators Project. "We wanted to really build a program to showcase the amazing moments happening in art and make it as transparent as possible to show people worldwide what happens when you maximize with technology."

Creators Project With Florence & the Machine, Karen O, Justice Comes to Brooklyn Courtesy of Vice, Intel

Intel conducts extensive focus groups with Creators Project attendees after each event, seeking to measure the brand's relevance and awareness among its influential attendees. And coming in 2012, Intel is looking to bring Creators Project materials to its retail spaces in ways it wouldn't dare at its own events. "You're never ever going to go to a Creators Project and have people hand out pamphlets or things like that-it's just not the way you interact with this audience," Haroldsen says. "It's all about the experience and aspirational ideas. You can't buy authentic trust and respectability. It's all got to mean something to this audience, or it's not going to work."br />
Authenticity is so important to Converse's Cottrill, he prefers not to actively market to his consumer base at all. "When we don't speak-when artists speak and we don't-it's way more powerful," he says. "By not putting any demands on the artist, they turn around and tell their social media following about our brand. Fifteen years ago, 'new media' was banner ads. Now this becomes the media."