How Justin Bieber's manager used online word-of-mouth for "authentic marketing"
Lizzie Widdicombe, The New Yorker magazine, issue dated 9/3/12
[Justin] Bieber is the only superstar to have emerged from YouTube so far, and his online power and off-line marketability are seamlessly intertwined. His YouTube channel is approaching three billion views, and on Twitter, where he acquires a new follower every other second, a single tweet from him can mobilize his supporters to perform stunning feats.... [His manager, Scooter] Braun's first encounter with Bieber, via YouTube, has become a pop legend. Braun stumbled across a clip of a 12-year-old Bieber singing at a talent show. Instead of hawking his new talent to record companies, Braun set about building a bigger following for Bieber on YouTube, where his videos had already attracted tens of thousands of views. Braun calls this kind of grassroots approach "authentic marketing" -- a phrase, like "amicable divorce," or "peacekeeper missile," that sounds like an oxymoron. Explaining the idea, he cited "Mark Zuckerberg's philosophy that the whole world should be open and everything should be shared," and said that today's young people think that "there should be nothing hidden, you can't lie to us. Authentic marketing is respecting the consumer: make a viable product, and just concentrate on getting eyeballs on it and telling its story." When Bieber's videos had attracted around 54 million eyeballs, Braun arranged meetings with fifteen music executives in New York and L.A. After the first round of rejections, Braun realized that a YouTube following wasn't enough. He pitched Bieber to two R&B stars, Usher and Justin Timberlake [and their record labels]. When both expressed interest, he pitted the stars against each other, turning the ensuing bidding war into good press. Once Bieber had a label and Usher as a spokesperson, traditional marketing mechanisms fell into place. Barry Weiss, the chairman of Island Def Jam, said, "Between YouTube and Usher, Scooter created a platform that basically hadn't existed."
Related: Without authentic grassroots support, online 'WOM' won't work
James Cattermole, Music Think Tank blog, 8/13/12
With people trusting recommendations from friends more than ever (with 78% of people acting on a recommendation from someone they know), the importance of creating socially relevant content is higher than ever. The question of whether an artist can breed success through instigating word-of-mouth amongst their social networking fanbase is one that many record labels and managers are looking to answer. A good example of the success organic WOM can bring is [the band] My Chemical Romance. What [they] did successfully was creating an online buzz through giving away free tracks to fans. This free content, and the promise of more, was rewarded by a huge buzz amongst their online fanbase, including a large number of radio requests for their songs; successful social network tactics were rewarded by natural WOM. Having 450,000 Myspace fans, who were buzz marketing without knowing, led to their 2nd album selling in excess of 1.2 million copies. An illustration of how a lack of WOM affects album sales was demonstrated by 13-year-old singer/songwriter Bonnie McKee. Reprise Records had gone the same route to marketing Bonnie, making tracks available online for fans to listen to and hopefully share. However, when it came to the release, her album flopped, only selling around 17,000 copies. Her head of marketing, Robin Bechtel, believed the reason for Bonnie's failure, was "The demand for McKee's single was pretty much satisfied by all the free online access. Her appeal was apparently not deep enough to get people to go beyond the single. The problem wasn't positioning or marketing, it was the lack of authentic grassroots support."
Study: The impact of non-professional reviews on 'working class' theatergoers
A study published in the Journal of Cultural Economics [shows] the so-called "intellectual class" prefers dramas, the "working class" opts for comedies and the wealthier are influenced by professional reviews when they have paid for a theatre ticket. "The aim was to analyse theatre demand. It was based on a type of models used in microeconomics that analyses how individuals make their decisions. These models are used frequently in transport and marketing and go by the name of discrete choice models. We conducted surveys in two of Newcastle's most important theatres," as explained by J.M. Grisolía, coauthor of the study. Newcastle [a city in northeast England] is home to different types of theatres, from the most modern, like the Northern Stage, to older examples. The experts worked with the 3,000 observations obtained from a survey performed on 300 people. As the researcher points out, "we presented individuals with ten hypothetic choice scenarios, each with five alternatives. Each option was defined by its attributes: price of the ticket, the type of theatre, the genre (comedy, drama and experimental theatre), repertoire (classic, modern, contemporary), author (famous or unknown), expert or popular reviews (light-hearted, forums, word of mouth)." The experts combined different variables for obtaining multiple interactions until arriving at ten choice scenarios in order to extract more information from each subject. The model used is called a latent class model, which groups the sample individuals into different categories. The model clearly identifies three different classes that attend the theatre: a "well-off" class that represents 43.1% of the sample and is characterised by preference for classic theatre venues, enjoying all types of theatre and showing more willingness to pay, especially when reviews have been good. The "working" class includes more young theatre goers (25.4% of the sample) who are mainly interested in comedy, consulting non-professional reviews more frequently and displaying less willingness to pay. Lastly, the model identifies an "intellectual" or "cultural" class (31.5%) with high willingness to pay for theatre productions that have a special preference for drama and form their opinion more independently of the reviews.
Study: Small uptick in online WOM can boost restaurant reservations by 19%
Joanne Pan, Mashable.com, 9/3/12
Customer reviews travel far in the age of tweets and mobile check-ins. As more foodies come to rely on word-of-mouth reviews, Yelp's system of ratings can make or break a restaurant. Economists at the University of California, Berkeley [examined] the effects of Yelp's online ratings. The study shows a slight half-star improvement in ratings can increase a restaurant's business during peak dining hours by 19%. Anyone can be a critic on Yelp. Since launching in 2004, the online reviews website sees an average of 78 million unique visitors per quarter. It's become a crowdsourced guide to cities worldwide. Visitors base real-life purchasing decisions on the star ratings and reviews. Users can assign local businesses and restaurants up to five whole stars. Yelp rounds up scores to the nearest half-star. A restaurant with a rating of 3.24 will show 3 stars. A restaurant with five more positive reviews and a slightly higher average of 3.26 rating will display 3.5 stars. Currently, Yelp reports there are nearly 30 million reviews online. However, critics point to a high number of inauthentic reviews on the website. There are even companies offering to write fake positive reviews for small businesses to increase ratings to 4 or 4.5 stars. The researchers believe the study's findings give restaurants a high incentive to falsify positive ratings.
Word-of-mouth sales propel highest-grossing conservative documentary of all time
Grady Smith, Entertainment Weekly magazine's Inside Movies blog, 8/28/12
Rocky Mountain Pictures' conservative documentary 2016: Obama's America made its mark at the box office last weekend, earning $6.5 million from 1,091 theaters -- substantially more than the three studio-distributed newcomers. The anti-Obama polemic has earned $9.4 million since its debut [in mid-July]. Over the weekend, 2016 passed the Ben Stein film Expelled: No Intelligence Allowed to become the highest grossing conservative documentary of all time. And its box office run is far from over. Of course, 2016 has a long way to go before it can even come close to comparing to Michael Moore's anti-George W. Bush documentary Fahrenheit 9/11, which grossed $119.2 million in 2004, and it's likely that 2016 will never climb that high. Yet comparing the two pictures is somewhat apples and oranges. Fahrenheit 9/11 came from an Academy Award-winning filmmaker, debuted in a big 868 theaters, and enjoyed a promotional push from major studio distributor Lionsgate. 2016 premiered in just one theater in Houston on July 13, where it earned $31,610 in its first weekend. Says John Sullivan, who co-directed and co-produced the film: "I call this a reverse platform release." The film built buzz starting in America's heartland and worked its way to the more media-inundated big cities. How did the filmmakers decide where to take the film? A lot depended on potential radio coverage. "I think one of the key things we've done is we've partnered with radio show talk shows, knowing that that's where the political audience lives," says Sullivan. So far, the film is mainly driven by word-of-mouth. And whether or not you agree with 2016, people -- a lot of people -- are talking about it, which seems to be fostering a true curiosity around the project. Sullivan is confident that the film is not just reaching faithful conservatives. "Independents are really engaged in this movie," he says. "[It's] not just something in the Fox News crowd." While it's hard to say to what extent that statement is true, 2016 does seem to have entered the national zeitgeist.