Marketing in the age of plenty

Per David Eun, Google's VP of Content Partnerships, “An iPod can hold roughly 10,000 songs. Increase the storage capacity every 13 years, something the size of an iPod could store one year of video in another few years. By 2015, you could store all the music ever produced. By 2019, you could 85 years of video - a lifetime’s worth of video. By 2020, the same sized device could store all the content ever created. I’m not saying it’s going to happen, but it should think about the way we think about our businesses. It’s made the Long Tail viable - the theory is that our culture is shifting away from small number of hits. As costs fall, less need to lump consumers into one size fits all. Narrowly targeted goods can be as successful as mainstream fare. Because there’s no constraints on shelf space, you can get a lot of singles and doubles instead of just a few home runs. There will continue to be room for home runs, To not address the long tail is to miss a huge opportunity.”

What role will marketing play in this world of filter and recommendations and algorithms making the matches for users?

Well for one, the digital shelf space definitely has end-caps: the front page. According to the Wall Street journal,

Apple has jettisoned some of the conventions of traditional music retailing -- notably, the practice of selling prime promotional spots to recording companies willing to pay for better visibility for their acts. But behind the scenes there's plenty of horse-trading going on that influences which songs are seen and purchased by iTunes customers.

Apple -- now one of the largest sellers of music in the U.S. -- offers home-page placement in exchange for things such as exclusive access to new songs, special discount pricing or additional material such as interviews with stars. Most other big retailers, digital and physical, also seek exclusive offerings, but Apple is especially aggressive and has outsize clout when it comes to the slightly out-of-mainstream music it often emphasizes.

Acording to Justin Sinkovich, New Media Manager at Touch and Go records, "Placement on the homepage is a huge, huge deal. It means the difference between charting and not charting." Mr. Sinkovich says he fights hard to get Touch and Go artists on the homepage of any site that is digitally distributing Touch and Go material. He believes good placement is even more important in the digital world because "there is no good digital shelf space."

So there is certainly room for promotions in the digital realm. Ad buys could be necessary if only to give producers the leverage necessary to get their product into the front page.

The marketing team will need to know it's audience and where they are. Yes, there will be times when saturation marketing is necessary, but I suspect that with time the point of diminishing returns on this type of marketing strategy will become lower and lower. Economically it will be better to spend against a target audience much more than spending against the universe.

I think the recent release of Grindhouse is a good example of how this marketing might have worked. Look at opening weekend for Grindhouse. According to the April 10th, 2007 issue of Daily Variety, 4 of the weekend's Top 10 Grossing Theater Engagements were Grindhouse engagements, with a total of gross of $391,474, yielding a per screen average of $97,868.50. Hindsight is 20/20, but what if The Weinstein Co. had held back it's release of Grindhouse to just the major cities plus a few secondary markets? This would have reduced the overall gross, but the per screen-average would be astronomical and those people who wanted to see the movie would have a chance. Then those people could do two things.

1. Give feedback to the Weinstein Co. Grindhouse was an ambitious movie, especially in its 3 hour running time. It was a lot to ask of audiences. Maybe they could have altered their release strategy, showing the films as two separate movies in some instances, back to back in others. They could even include different trailers in different showings, thereby encouraging repeat viewings!

2. The audience could have time to tell their friends how cool it is - the proverbial word of mouth.

Grindhouse isn't one of the numerous titles that can be stored on the iPod yet, but it is in effect in the same environment already. Consumers have more choice and access than ever before. Content providers must address this issue.