Why Net Neutrality Is a Marketing Issue

The Net may soon have gate keepers, a price tag or a throttle — and that’s something we should all be concerned about. Marketers, in particular, should be paying attention and throwing their support behind Net Neutrality as both a concept and as a set of regulations because without those safeguards the critical connection points to consumers may be threatened.

“Rusty Lock” Creative Commons license | Credit: Flickr by webhamster

The Net may soon have gate keepers, a price tag or a throttle — and that’s something we should all be concerned about. Marketers, in particular, should be paying attention and throwing their support behind Net Neutrality as both a concept and as a set of regulations because without those safeguards the critical connection points to consumers may be threatened.

New online business models and innovations have thrived with the freedom of equal access officially protected first by the FCC in 2010 with the passage of the Open Internet Order. Many challenges and debates later, this order was expanded in 2015 in an effort to assure a level playing field.

The current administration’s FCC Chair, Ajit Pai, hopes to dismantle the regulations that allow smaller players to compete with huge ISPs like Comcast or Verizon that wield lobbying power and have deep, deep pockets and a big stake in the production and delivery of online content. This could happen before the year end and opens the door to scenarios that include the big ISPs blocking select content, slowing or speeding up select content or instituting pay walls for certain content.

It is easy to see how that may discourage access and innovation for new or smaller players or new offerings as the big power players will be free to throw obstacles in the path of contenders.

Especially now as video becomes ubiquitous as a critical marketing tactic and consumers use increasing bandwidth to stream content, this question needs to be asked: Will video advertising (in particular pre-roll) suffer from a tiered distribution model that forces some, but not all, to pay a premium to deliver that content? Will those consumers consigned to the slow lane stick around to see ads? Marketers may be forced to factor in delivery speed, access and other cost and optimization factors such that the ROI equations will differ based on who you are. This removes meritocracy and weights success not by the quality of your message or product/service but on whether you have the power to shift the odds in your favor.

To be fair, the world is not fair now. Large players already have advantages in cash, scale and access, but the removal of Net Neutrality would fundamentally weaken the very strengths that gave us so many innovations from Internet startups in the past two decades. It’s not a political issue, according to a variety of recent polls as citizens in both major parties overwhelmingly support Net Neutrality. It’s a potential abuse of power issue. Simple and scary.

Opponents of an Internet with fair and equal access cite a distaste for regulations and government interference; some even call it a solution in search of a problem. But the potential for abuse is huge and the impact will reverberate in our economy for decades if we allow power to corrupt the models that drive our fastest growing and most globally influential industries here in the US.

The likely result of the dismantling of the protections currently in place will be higher marketing costs, reduced access to consumers, diminished targeting and data capabilities and declining novelty in online ad offerings and services. That’s not the marketing advances we hope and work for. We can expect the void to be filled by other countries not operating under these adverse conditions for another blow to our global and economic position.

What to do, what to do? “The Internet-Wide Day of Action” online protest took place on July 12 this year and was broadly supported by nearly every company in the Internet game including Google, Amazon, Facebook, Twitter, Spotify, Yelp, Dropbox, Netflix, reddit and many others. But you don’t have to be a company to fight for equal access. Make your voice heard in online venues, on your website and with your representatives, sign the petition here at battleforthenet.com, or visit savetheinternet.com for more ideas.

How are you going to fight for equal access?

Millennials, Music and Marketing

Music is a powerful marketing vehicle that fits neatly into the social media space. Big brands have aligned with celebrity artists to reach Millennials in their native social media milieu. Taylor Swift is the face of Keds and Diet Coke. Impresario JayZ has a multi-million dollar deal with Samsung, and Katie Perry is on board with H&M to name just a few. Music festivals have become mega-marketing events with a complex web of social sharing opportunities.

Music is a powerful marketing vehicle that fits neatly into the social media space. Big brands have aligned with celebrity artists to reach Millennials in their native social media milieu. Taylor Swift is the face of Keds and Diet Coke. Impresario JayZ has a multi-million dollar deal with Samsung, and Katie Perry is on board with H&M, to name just a few. Music festivals have become mega-marketing events, with a complex Web of social sharing opportunities.

https://www.youtube.com/watch?v=gpsVax8h7gw

This relationship between big brands and celebrity musicians is symbiotic: For the brands, music can be the relevant tie that binds them to an audience that’s skeptical of traditional advertising. For celebrity musicians, brand endorsements are not only a lucrative revenue stream, but also an important platform for extending their reach.

But it wasn’t always this way. In the 1970s, most boomers would have called a rock star who endorsed products a sell-out. You would never see anything like The Grateful Dead endorsing Fritos back then, but now we even have Bob Dylan on TV for IBM’s Watson.

https://www.youtube.com/watch?v=pwh1INne97Q

The evolution of music into a marketing vehicle has been a long, strange trip. Music has always been a shared experience, but there’s a huge difference in the way young people share between Millennials, the current largest generation, and boomers, the previous largest generation.

From my teens through my 30s, it was cool to have a high-fidelity stereo system (tuner/amp, three-way speakers and turntable) to play vinyl records at high volume and fill a room full of friends with music. Music listening was a social thing, something to be shared live and in-person. The listening unit was an album side, usually start to finish, but occasionally someone would take the trouble to play an individual cut, carefully using the turntable lever to drop the needle in the space between the grooves of the spinning vinyl platter. These precious vinyl disks were handled very carefully to ensure that they didn’t collect oily fingerprints, or God forbid, noise-producing scratches.

Back then, creating a playlist was not a drag-and-drop task. It was a longer-than-real-time event. Using a reel-to-reel or cassette tape recorder plugged into the same amplifier as the turntable, the playlist maker would push the record button, drop the needle for each track, play it through, pause the tape, carefully change out the vinyl record, and then record the next track. The advent of the compact disc made this a bit easier, but it was still a real-time event.

For Millennials, music is still a shared experience, but it’s shared on social media rather than in-person. Rather than being an onerous task, the easily generated playlist is now a common unit of listening. People share playlists through Spotify and Pandora, and can instantly share snippets of music they’re listening to on Spotify or Apple Music using Facebook Music Stories. And music consumption is high. A study by Vevo found that Millennials spend an average of 25 hours per week streaming music.

But rather than filling a room with music, much of music listening today is a solitary activity, using earbuds and mobile devices. High-fidelity systems are a thing of the past – people 18 to 34 are about half as likely to own a receiver/amplifier as those 55 to 64 according to MRI+ data. And while 11 percent of 55 to 64 year olds still have a turntable, only 2 to 3 percent of Millennials own one. Meanwhile, Millennials are about 50 percent more likely to own an mp3 player docking station (with tiny little speakers) and 40 percent more likely to own earbuds than their older counterparts.

The biggest change, however, has come in the area of music festivals. Last year, 14.7 million Millennials attended music festivals. Face-value for Coachella tickets was $349. The festival grossed over $84 million. And brands like Coca Cola, Red Bull and TMobile pony up about $1.4 billion annually in festival sponsorship money. Why? A study by live promoter group AEG and branding company Momentum Worldwide found that 93 percent of those surveyed stated that they liked the brands that sponsor live events. Eighty percent said that they will purchase a product following a music festival experience, as opposed to 55 percent of those who were not in attendance, and those who attended a music festival with brand sponsorship walked away with a 37 percent better perception of the company.

By contrast, Woodstock, the watershed music festival of 1969, was attended by about 500,000 people. Not all of them had the three-day festival ticket that sold for $18. Corporate sponsors? Really?

The ‘Continuity’ of Subscription Marketing — Wow, It’s Everywhere!

Somewhere down the line, I missed the memo that “continuity clubs” is now a yesterday term and that “subscription marketing” is preferred. While some of us may recall “12 CDs for $.01” or may even today have a favorite product-of-the-month subscription, it seems marketing has fallen in love with subscriptions.

Somewhere down the line, I missed the memo that “continuity clubs” is now a yesterday term and that “subscription marketing” is preferred. While some of us may recall “12 CDs for $.01” or may even today have a favorite product-of-the-month subscription, it seems marketing has fallen in love with subscriptions.

Such was the topic of a recent Direct Marketing Club of New York luncheon — where featured representatives from the entirety of the “subscription ecosystem” shared their perspectives: Barry Blumenfield, BMI Fulfillment; Jim Fosina, Amora Coffee & Amora Tea; Robert Manger, Sandvik Publishing; Pattie Mercier, Vantiv; Craig Mirabella, EverBright Media; George Saul, Fosina Marketing — and serving as moderator, Stephanie Miller, TopRight.

It is truly astounding so many products can be “moved” by subscriptions — nail polish (Julip), underwear (FreshPair), software (Adobe), music streaming (Spotify, Apple), men’s designer wear (Trunk Club for Men), women’s shoes (Shoe Dazzle), cosmetics and personal care (Birchbox), buyers’ clubs (Amazon Prime), and dates (match.com) — just a few of the examples offered up, in addition to coffee/tea (Amora), and educational learning (EverBright Media and Sandvik Publishing) that were represented on the panel.

While the channels and the product mix have expanded, some tried-and-true maxims from the days of “book and music clubs” have not been lost, according to the panelists. They include:

  1. It’s all about the bond with the customer — how you differentiate your product and service to justify a continuing relationship and greater lifetime value.
  2. This is a direct marketing business — pay attention to marketing ROI in every detail, even when business is great, there could be warning signs of waste and cost in specific areas of marketing spend.
  3. The entirety of the customer experience needs to be looked after — from product development , to advertising, to ordering, to service (extending from self-service to contact centers), to fulfillment.
  4. Pay particularly close attention to such areas as technology and fulfillment: surprise and delight requires such focus.

While channel expansion has brought to the marketplace new realities:

  1. Does your brand have a “thumb stopping” moment? With more and more mobile engagement, subscription marketers must make it easy to stop the consumer, make her pause, and consider the product/service offer in a mobile moment.
  2. There is a role for every channel — but each channel has its own metrics to pay attention to. While the panelists were proprietary with details, the lifetime value of a customer acquired via email, direct mail, DRTV, website or mobile most likely is distinct from each other — and may have different attrition rates. You’ll need to manage these distinctions in the marketing mix.
  3. A payment processing partner is important. In any given year, millions of credit cards expire — and this will be even more prevalent as chip-enabled cards flow into the marketplace.
  4. “Bill me” invoicing — once a mainstay in the business — has practically disappeared altogether over the last five years — as consumers in general appear to have become more casual about not paying.

To say the least, this business model has expanded far beyond books, magazines and music — and it makes me wonder: What’s next?