| |
 |
 |
Mon, November 30, 2009
I think many people in the industry would agree with me that Broadway’s greatest missed marketing opportunity is the way we communicate with our customers. I think it’s safe to say that we don’t say ‘thank you, come again’ to every patron effectively. I think we can all agree that we don’t effectively cross-sell shows on Broadway or on tour outside of the dreaded discount email offers we currently send. Think of the last meeting you sat in where we spoke about the customer feedback we received from ticket buyers on how they felt we could make their Broadway experience better.
My point – our customer communication platform needs help.
With the way we communicate with consumers before, during and after their experience with Broadway, we are in a prime position to take advantage of very big opportunities for our industry if we collectively invest the time and resources to enhancing our efforts towards better communicating with our customers.
Now, I know many on the producing side in the industry will go directly to the point of “how can we improve customer communications when we don’t own our customer data?” While there is truth to the point that not owning your customer data is a stumbling block (I continue to fight on my clients behalf!), this doesn’t mean you can’t have access to using this data by working collectively with the theatre owner (the one’s that own the customer data).
For some reason, this collaboration hasn’t really happened on Broadway as I see it done in other markets. My agency manages somewhere over 1 million customer records (including email addresses) across the globe for our clients, so we are used to the politics that come along with email usage across multiple parties. But, on Broadway, it seems as though the industry keeps getting tripped up in the perpetual argument of “who owns the email addresses of ticket buyers” rather than the larger discussion of “how can we collectively use the email addresses to reach our marketing goals.” Personally, I chalk this lack of collaboration up to egos and power struggles that is a common theme across all markets we work in. I would argue that that this is the single biggest reason it’s taken this long to get a meaningful email communication plan in place across the industry. We need get past this and embrace industry collaboration.
But, to make this collaboration a reality, there is fundamental change needed in how we talk about the topic. I sit (and have sat) in a ton of meetings discussing this issue and I believe if we better structure the discussion and goals of what we all want to accomplish by communicating with our ticket buyers, 2010 will be the year that we can make significant progress on the topic. I submit to you four changes I believe we need to make in how we talk about the topic in order to move an actionable agenda forward on improving overall customer communications in the Broadway industry:
Change #1: We must recognize this is not a conversation about the ownership of email addresses. All too often, this is the focal firestorm that gets attached to the discussion of customer communications. I’m not saying this can’t be a conversation down the road, but for now, if we expect to get anything done we have to put behind us the argument of who “owns the email addresses” and look towards the future of what do we want to say to our customers and when. There is way too much money made on the buying and selling of this customer data – to think the theatre owners would want to give this up is a battle producers are most likely never going to win. Again, this is not unique to Broadway – most venues across the country maintain ownership of the customer data, not the producing entity.
I’ve spoken first hand with the theatre owners and they have very valid arguments as to their position on their maintaining ownership of the data and have collectively outlined a plan through a new program called Audience Rewards that seems very promising as a channel to help with the long-term development of new customers for Broadway. In short, it’s a rewards program aimed to build customer loyalty across all of Broadway and the arts. If nothing else, Audience Rewards represents a single entity bringing together the interests of the three major theatre owners with the cooperation of the two major ticketing systems to create one platform for consolidating customer data and making it actionable for producers. That’s a huge accomplishment in and of itself. I highly encourage you to talk with Josh Lesnik, the President of Audience Rewards, who is outlining a plan that is quite exciting and has huge potential.
Change #2: We must all believe that a comprehensive customer communication strategy is vital to building and maintaining audiences over time. It’s quite common for me to hear from clients, “but they already bought a ticket, shouldn’t we be investing money in reaching new audiences?” Well, I firmly believe in maximizing your existing paid customers experience IS investing in new audiences – you are turning those that see your show into walking ambassadors. Happy customers post their opinions on Facebook, tweet their review to friends and email recommendations to colleagues – every research report ever created for live events will reinforce the value of word-of-mouth and endorsement from colleagues as a critical component when choosing which show to see. The Internet has continued to put word-of-mouth on steroids and it’s the way of the world in a digital marketplace. If you seek to maximize your customers happiness through strong customer communications, even those that didn’t enjoy what’s on stage will be more opt to keep their ‘not-so-good’ opinion to themselves because they felt taken care of. Read most poor reviews on consumer research sites – they are typically customer-service related issues more so than the actual production.
Change #3: We must agree that shows have specific needs and opportunities in talking to their customers that are independent of the larger, broader, industry need of talking to these same customers for a long-term relationship with Broadway. Often when the topic of email marketing comes up for specific shows wanting access to their email addresses, it often goes into a discussion about whether or not we can create repeat buyers to the show. While I’m not saying that we shouldn’t try to gain repeat visits, I think there are far greater opportunities that individual productions should explore.
First, there are a range of what I would call experiential email opportunities. These are emails that tie directly to the brand experience and are sent for a functional purpose to improve or deliver the customer experience. These include pre-trip, post-purchase and post-trip related emails. These are the emails consumers open that could include directions to the theatre, a survey asking for their feedback about their experience, an ecard that could be sent to friends or an invitation to remain connected by becoming a fan of your show on Facebook. From the data we see across the country, these emails typically see open rates of 50%+ which means you have consumers – not just fanatical fans - that are engaged, listening and ready to act assuming you are talking to them in the right context.
After experiential emails, you have what I call earned email opportunities. I think of earned emails as the emails you send to people who have asked to remain connected with your show above and beyond the communication that is involved when seeing the show. This means that you made such a great impression with your show and people want to remain connected with your brand over time that they said, “yes, please keep me connected as I am a fan of your show.” This could be a repeat customer, a first-time customer trying to get know you better or a fanatical fan at your beck and call to help support your show. I think of a shows ongoing newsletter as a great example of earned email impressions.
The last category is what I would label as paid email opportunities. This is pretty self-explanatory. These are emails that you pay an advertising or premium cost for to have sent to potential ticket buyers who did not specifically opt-in to get messages from you. I think this is one place that has not been scrutinized enough and we should take this next year to put a much larger focus on this. There are literally millions of emails sent (and lot’s of dollars spent) each week – but, if you were to survey the industry to know response rates, open rates and overlap between email programs there would be a lot of questions unanswered.
Change #4: We all need to work together or we will be having this same exact conversation for years to come. To make email communication successful will involve participation by all parties. If everyone defined their marketing goals of what they want to get out of improving customer communication, I’m quite sure we can all stitch together a plan of who is responsible for what touch point. Shows have their specific goals to drive revenue, up-sell ancillary revenue opportunities and to build a communication platform that extends to the future life of the production on tour. The theatre owners want their theatre’s full for many years to come, so have a vested interest in building long-term, sustainable relationships with Broadway ticket buyers. Everyone has a vested interest to improve customer communications – but, without a shared vision, no progress will be made.
So, there you have it. I know there are a lot of differing opinions on the topic and I would love to hear what all of you have to say. We will be hosting an event at our office this coming Thursday at 8:30am which will bring together about 100 folks in the industry to talk about the topic of customer communications. You can submit for an RSVP and will be notified if there is availability. http://www.situationinteractive.com/rsvp.php
Sun, November 29, 2009
There is so much to be grateful for this Thanksgiving season. Personally, I’m celebrating my first holiday at home with my newly born son. Professionally, I have the most incredible staff around me and, at the same time, I have the most forward-thinking, open-minded client base I’ve ever had since forming Situation Interactive.
This past January, I posted a story on my views on what 2009 will bring in the live event marketing space where I said the following...
“There is a one major reason I see to be optimistic for what 2009 will bring – that is, there is a new sense of urgency that will bring action to key issues in our industry. This is the year that removes excuses, delays and reasons to put off big problems for later – with hardship comes a new found focus, a ‘sense of urgency’ for positive change.”
While the Broadway industry typically gets a bad rap for being resistant to change, you can consider me an optimist while I call that old adage one big stack of bologna. I’d like to profile just a sampling of initiatives that I thought reflected the spirit of positive change and innovation that stood out to me over this past year. While there were a ton of awesome campaigns, the following initiatives stood out to me as they reflected executions of change that I think will be here to stay for quite some time.
Broadway Goes Green
It’s amazing what you can accomplish when you mix passion with work ethic. I stand in awe at the progress of the Broadway Green Alliance. Aside from the actual mission of trying to make Broadway a greener place, I was equally impressed by the commitment of those that came together to make it actually happen. Susan Sampliner, Seth Greenleaf and many folks associated with the League should be very proud and we, as an industry, should try and find ways to duplicate this ability to take an idea or concept and execute it with passion. On Wednesday, December 9th from 11am - 1pm you can deposit your e-waste (broken cell phones, computers, printers, and dry batteries) in the center of Times Square (in front of the TKTS booth) to show your support for the Broadway Green Alliance's one year anniversary.
Broadway Ticketing Embraces Mobile Outlets
Mobile devices clearly represent the future of live event marketing and ticketing. But, what many people don’t know – “the future” is actually now. Under the direction of Jennifer Tattenbaum at Telecharge.com, thousands of tickets were purchased on mobile devices this past year on the Telecharge mobile platform. No aggressive marketing, no major industry outreach – simply a smart mobile site and the proactive commitment by Telecharge to offer their consumers options in how they can transact with Broadway. Kudos to the folks at Telecharge. Take out your mobile device and visit www.Telecharge.com to check it out.
Variable Pricing Comes to Life in Box Offices
Sure, there is still a lot of work needed to better maximize the pricing structure for Broadway, but this past year pushed forward the discussion of true variable pricing. While this will be a topic of discussion that will evolve over the coming years, the folks at the Shubert’s really made the discussion a bit more concrete by placing digital screens in the lobby to allow for better variance in pricing of full-price tickets. Positive change has to happen somewhere, so I’m happy to see shows coming together with the theatre owners to come up with proactive solutions to maximize key revenue potential.
Audience Rewards Brings New Hope to Future Audience Development
There will always be tons of skeptics on any new industry-wide program for selling Broadway tickets, so when Audience Rewards was launched I can imagine a ton of eye rolling and the rumblings of “another one?” At its face value, Audience Rewards is a points exchange platform that allows consumers to use points to purchase Broadway and live event tickets. Well, this program is much different than anything you’ve seen before and you need to keep an eye on its development over the coming years. First, all three major theatre owners are on board with the program. Second, from my understanding, it’s a well-funded initiative with hundreds of thousands of dollars invested in making the project a success. Third, they have brought in an experience executive team that is outlining a much broader vision that can open this up well beyond just the selling of Broadway tickets. If done right, Audience Rewards will capitalize on maximizing national live event customer data to drive incremental sales, build brand loyalty with the overall Broadway category and create opportunities for enhanced glue with Broadway and the touring productions. It represents much, much more than simply buying Broadway tickets with rewards points.
Social Media Has Taken Flight
Name a show that doesn’t have some kind of presence on at least one of the main social networking platforms like Facebook or Twitter? Well, this past year most (if not all) major musical productions now have social media as a part of their overarching marketing plan. Kudos to guys like Ken Davenport who through BroadwaySpace.com has heavily promoted the idea of brands thinking more social or other agencies like Art Meets Commerce who continue to promote the importance of bringing content to where our consumers are. I see no slow down in this trend over the next three to five years although, if history has taught us anything, we can be sure the way the conversation is structured on how best to use social media is bound to change.
These are just a sampling of some ideas to me that illustrate the spirit of innovation and positive change that is in full-swing on Broadway and across the country by very talented people across all facets of the industry.
Do you have any examples of innovation or positive change from this past year that inspired you? How about change you hope to see this next year?
Sat, November 28, 2009
The American Theatre Wing recently released “The Play That Changed My Life” which highlights the works that influenced and inspired today’s top playwrights (a pretty incredible bunch of folks were interviewed for this book). I’m a big supporter of works like this – there is not enough solid reading material for the industry so I hope we can all get behind this book and scoop up a copy (and read it of course!). Below is the description straight from Amazon.com.
What was the play that changed your life? What was the play that inspired you, that showed you something entirely new, that was so thrilling or surprising, breathtaking or poignant, that you were never the same? Nineteen of today's most gifted playwrights respond in this most revealing and personal book published by Applause Books and presented by the American Theatre Wing, founder of The Tony Awards.
From Edward Albee's 1935 visit to New York's Hippodrome Theatre to see Jimmy Durante (and an elephant) in Rodgers and Hart's Jumbo, to Diana Son's twelfth-grade field trip in 1983 to see Diane Venora play Hamlet at The Public Theater, from David Henry Hwang's seminal San Francisco encounter with Equus to a young Beth Henley's epiphany after seeing her mother in a Green Bean Man costume, The Play That Changed My Life offers readers a unique peek into the theatrical influences of some of the nation's most important dramatists. The book is filled with tributes, memories, anecdotes and other insights that connect past to present and make this volume an instant must-have for anyone who adores the theatre. Also in the book are pieces by David Auburn, Jon Robin Baitz, Nilo Cruz, Christopher Durang, Charles Fuller, A. R. Gurney, Tina Howe, David Ives, Donald Margulies, Lynn Nottage, Suzan-Lori Parks, Sarah Ruhl, John Patrick Shanley, Regina Taylor, and Doug Wright, as well as an introduction by Paula Vogel. All together, the playwrights featured here have won more than 40 Tony Awards, Pulitzer Prizes, Obies, and MacArthur genius grants.
Buy it here.
Sat, November 28, 2009
Here’s an unfortunate example of good intentions gone horribly bad. A local news station used interactive billboards that pulled in the latest tweets from their Twitter page and, well, I’ll let the local paper tell you what happened. According to the website for Lagniappe, a local news outlet in Mobile, Alabama:
“WPMI-TV insiders have confirmed what has been a swirling rumor for the past day — that the station’s general manager and news director were suspended for a week because of an embarrassing billboard. General Manager Shea Grandquest and News Director Wes Finley have been suspended, allegedly because of a ‘snafu’ with one of the electronic billboards in town that showed a picture of anchors Greg Peterson and Kym Thurman and Chief Meteorologist Derek Beasley alongside the headline ‘3 Accused of Gang Rape in Monroeville.’ The headline was under the header “Right Now on Twitter,” and clearly was aimed at promoting the station’s breaking news, but a photo of it has made its way to e-mails all over town and brought plenty of laughs.”
See the picture in the link below and it will make more sense. (It certainly got a chuckle out of me!)
Unfortunately in the world of real-time, quick delivery of content – mistakes will happen which can make you look a bit foolish. But, if this is the sole reason the GM and news director were suspended, I take serious issue with that call. This just sent the message of fear to anyone in the organization who wanted to try something slightly out of their comfort zone. Not good for breeding innovative ideas in an organization.
Thanks Adrian at BBB for the heads-up on this article.
Read the article here.
Thu, September 24, 2009
It’s been a hot topic for some time now – the question of whether or not your brand should have a presence on the popular social networks of Facebook, MySpace and Twitter.
I’ve been away for the past few months and have taken a significant amount of time to focus specifically on this topic. The goal - to outline the key opportunities for live event producers and to provide insight that will help them evaluate if the costs justify the investment.
To start, I think it’s important that you have a snapshot of the current social networking space. There are over 100 million consumers that now belong to a social network. Facebook has emerged as the leading social network of choice with over 120 million visitors monthly. MySpace, once the leading social network, is now a distant second in terms of visitors and has not seen any sustainable growth as of late. And, finally, Twitter has emerged with rapid growth over the past year and is poised to catch MySpace as the second most popular social network at their current pace. Take a look at the chart below.
According to our survey, aside from these major social networks, we see some Broadway consumers engaging in specific niche networks like BroadwaySpace (6.1%) which has gained some traction over the past year. For the most part though, all of our data points to Facebook, MySpace and Twitter as the leaders by far in terms of reaching the most Broadway consumers. For the sake of our research, I've put most of the focus on Facebook and Twitter (not MySpace) as they currently serve as the networks most of the current shows are using today.
How does the Broadway ticket buyer differ in usage patterns?
To try and understand the specific usage patterns of Broadway consumers, the first part of our research dealt with analyzing approximately 1,100 survey responses given online to Broadway ticket buyers during the month of July 2009 that asked them about their social networking usage. To check for any abnormal or seasonal skews in data, we compared this data against the 11,000 completed surveys we’ve done since the beginning of the year but saw no abnormalities.
According to the survey, here’s what we learned:
- 66.8% of total respondents said they belong to a social network.
- Approximately 50% of those that belong to a social network were over the age of 24.
- Of those that belong to a social network, 91.1% use Facebook regularly.
- Of those that belong to a social network, 27.2% use Twitter regularly.
- MySpace continues to show a steady decline in usage at 27.2%. When we looked at a month-by-month comparison in our survey results, we are able to see MySpace is rapidly being surpassed by Twitter as the second most popular social network among Broadway consumers.
I do want to point out that this is an online survey so you could assume these numbers skew slightly higher than the entire general population of all ticket buyers that would include those that don’t use the Internet regularly.
Who are these people? Are they new audiences or are we preaching to the converted?
The second part of our research aimed to try and learn more about users of Facebook and Twitter and how their behavior differed from the general online population. One way that we felt we could do this was by looking at users on Facebook and Twitter and track their activity when they clicked out to Broadway show official websites. For example, a consumer is on Facebook or Twitter – then clicks on a link that directs them to the official website. We have systems in place that can track their behavior.
Using the same analytics platform across three different websites of musicals that opened this past season, first we set out to gain a perspective of how the general population acted when visiting the official websites. We were able to review over 200,000 visits and 800,000 page views over the month of July 2009. This gave us a benchmark of how the general population views Broadway show websites. Next, we looked just at those that specifically visited the official show website from Facebook or Twitter to look for differences in usage.
Read on for a breakdown of what we learned.
Facebook traffic versus the general population
After a review of 1,630 visits comprising of 12,604 page views on Broadway show official websites that we could determine originated from Facebook, we found the following:
- Visitors to the official website from Facebook are more likely to have visited the website in the past than the general population. 39% of visits to the official website that came from Facebook were new visitors compared to 65% of the general population that visits the official website.
- Visitors from Facebook are significantly more engaged with website content visiting 30% more pages per visit and spending 40% more time on the site that the general visitor profile. This remains true with new visitors from Facebook as well.
- Visitors from Facebook are more likely to seek out additional information about the show (cast, news, synopsis) before visiting the ticketing page of the website.
What do we take away from this? These are consumers that are actively engaged and are seeking show content whether to re-immerse with the brand or to explore ways to learn more. There a significant number of active, engaged new visitors that we believe creates a two-fold opportunity for Broadway - incremental sales and the ability to harness your most passionate brand advocates.
Twitter traffic versus the general population
After a review of 3,495 visits comprising of 14,560 page views on the Broadway show official websites that we could determine originated from Twitter, we found the following:
- They are typically most familiar with the brand with just 31% being new visitors to the website.
- In terms of overall referrals to our sample websites, Twitter drives more referral visits to the official website than Facebook.
- Twitter visitors spend less time on the official site than both the general population and Facebook, visit less pages and are most likely to exit without visiting other pages on the site.
What do we take away from this? These consumers are most likely already aware of your production and use Twitter to remain connected. Our data shows Twitter is all about quick hits of actionable content – it’s about speed of delivery, fresh content and simplicity. There is evidence to suggest Twitter is primarily talking to the converted – but, it remains a cost-effective vehicle to fuel positive word-of-mouth, to build ambassadors and to drive repeat visits.
In conclusion - believe none of what you hear and half of what you see.
Engaging in the social networking space takes more thought and resources than many expect. Brands that do very well have a plan and an organization-wide process that makes social networking an integrated part of how they communicate with their consumers.
I highly recommend that anyone interested in expanding their social networking presence should educate themselves first. Join Facebook, join Twitter – use them regularly. There are so many resources online that give tutorials, tips, advice and case studies (check out Mashable.com). It will be time well spent as I don’t see these networks going away any time soon.
If you have any thoughts or any questions on any of this, please let me know and we can connect.
Wed, September 23, 2009
Over the past four years, we have assembled an amazing team with great, big aspirations. As we head into 2010, we are looking to expand our talented team to help us fulfill our aspirations and to support our company mission of creating fearless, interactive marketing strategies that actually work. We have posted three job opportunities that we are currently hiring for including account services positions along with a new video producer role. But, more importantly, we know the best talent always isn’t found through a specific job posting. With that in mind, we are happy to announce the launch of a new site (Work w/ Situation) that is aimed to recruit the best and the brightest from employees to vendors to clients in every aspect of our business.
Just because someone doesn’t fit a specific job description now, doesn’t mean there aren’t opportunities that shouldn’t be explored in something we might not even be thinking of. The marketing world is changing quickly – and, as an agency, we have grown to accept that we are always in beta and thrive off that energy. If you know of anyone that you think we should be talk to, please have them visit the site below or they can always contact me directly.
Click here to visit the 'Work w/ Situation' website.
Thu, August 27, 2009
Yes, the discussion about discounting tickets on Broadway has become almost dull to even talk about. We say the same thing over and over again. We all know there are hundreds of discount offers sent monthly via email to hundreds of thousands of consumers generating tens of thousands of tickets sold. We all know that our discount email practices are showing a clear trend of a shift in many full-price ticket buyers converting into discount ticket buyers. This is no longer even arguable as there are stacks of data that support this point. The issue has become – what do we do about it?
One answer is to simply do nothing about it. Hey, overall revenue continues to go up for Broadway.
Essentially, as an industry, it seems as though we have moved the top ticket price upward (both prime orchestra and premium seating) which in many ways has subsidized the reduction of ticket prices for the rest of the house through selective discounting. In addition, we have essentially begun to cut out the middleman (either intentionally or unintentionally) – group sales and FIT resellers – and have gone direct to consumer with our messaging and discounting strategies. When you boil all the numbers down, overall attendance really hasn’t changed in quite some time yet the industry today gets significantly more revenue per ticket than ten years ago.
If you look at it that way – is the pricing model really broken? What business wouldn’t love to see an estimated 70% + increase in the cost-per-unit sold column over a 10 year period?
I am one that believes that we should all be very happy with the overall revenue growth of the past but we should also be proactive in making sure we can keep that growth as we move into the future.
How do we remain proactive in advancing our pricing strategy? I’ll give you my novice opinion – feel free to let me know where you think I’m either wrong or completely off-base.
I think to start, I would suggest keeping an eye on three major trends that I think are both happening around us and having a profound effect on business as I type this email.
They include:
Trend: Social media is infiltrating the way we now communicate with Broadway ticket buyers
Effect on Broadway: The discounts that Broadway is sending out via email is now being distributed through a variety of additional channels which is ultimately eating into full-price ticket sales
I think we can now officially debunk the myth that all of those discount email offers that are sent out daily are being delivered to ‘theatregoers’. Simply put, your discount offers are now distributed well beyond email throughout the web whether we like to believe it or not.
Consumers online have become inherently social and Broadway content publishers are being forced to adapt to consumer needs. Our studies show that 50% of Broadway ticket buyers now belong to a social network. Five years ago people wanted to get their offers by email but there is a much larger trend that is occurring – people want to have their content delivered to them in the way that best works for them. Some want it on Facebook, others on Twitter and others by mobile alerts. This has forced practically all of the Broadway and theatre publishers who send out discount ticket offers by emails to now also have either a public listing on their website with those discounts, a Twitter feed promoting the discounts, a fan page on Facebook with discount listings or a profile on RetailMeNot (or other bulletin board websites) listing all of their discount offers. All of these distribution platforms then live within Google where there are tens thousands of searches daily for Broadway ticket related keywords. In short, these discounts are often the first thing consumers see when they are looking to purchase tickets.
Someone sees your TV spot/radio ad/billboard/online ad, then makes their way to Google to find you and lands on one of these discount offers. This is much more common that many people realize. Currently, this means that we are likely leaving somewhere between 30% – 40% of the revenue per ticket on the table through these discounts. I think it’s important to note that many of these people are tourists - the folks we are ultimately banking on to pay full price for tickets.
Over the past few weeks I’ve finally come to the school of thought that we now must really throw out the idea that “going to the booth” is somehow more damaging than sending out a discount offer to an initial email list of 250,000 plus members which is then repurposed indefinitely through a variety of online channels.
There is NO end in sight for this trend and you can only expect the problem to get worse over time. And please, don’t take my word for it – run a few Google searches, run a search on Twitter or simply talk to the folks at your ticketing company. It’s not just my paranoia.
One possible idea to help control discount code distribution would be for Telecharge and Ticketmaster to create a technology that allows for the creation and redemption of one-time use promotional codes. That means if I get a discount code and use it to buy tickets, the offer code ends there. I believe this would instantly crush much of the discount abuse from happening (or at least give us the option to test in areas to start weaning people off the regular discounts). It would put a thorn in the side of some folks in the secondary market and would make bulletin board websites offering discounts less relevant as a channel for ‘guaranteed savings’.
I don’t think anyone (including myself) really feels discounting is a bad thing – I think the general consensus is that we need better tools to optimize and control the offers. And, my personal feeling, is that we need to make our discounts make consumers work a little more. Discount offers should be offered for the not-so-great seats or have to be purchased either really far ahead of time or really last minute. By offering open ended discounts in many respects is a slap in the face of the full price buyer and is ultimately bad for long-term customer relationships for the Broadway industry. Also, which I will cover in the next part of the article, I think we need to keep our discounts at a level that doesn't undercut the FIT or group sales rate whenever possible to keep our sales partners wanting to work with us.
I know of many shows that will still want their offers to go far and wide like they do today but I also know many others (particularly the bigger hits) would love to find a way to selectively discount.
I know there will be technology limitations to all vendors being able to send out emails using the one-time use coded system – but, like all things technology, when there’s a will, there’s a way. Furthermore, when there is money to be lost if it doesn’t happen, things often work themselves out.
To me, if we expect to continue to advance and improve our discount strategies using some kind of coded system, I think some kind of shift to limitation on specific code usage will be absolutely necessary. Many other industries use this now to protect from the very problem we are currently facing.
Trend: The Internet has revolutionized the FIT business and has completely changed the way consumers research and book their travel
Effect on Broadway: Our current pricing model for FIT business is missing a major opportunity to convert tourists before they arrive in New York City
Attendance really hasn’t changed for Broadway in almost ten years. The FIT business sales figures have risen over that same period but still currently sit at about 20% of total sales (CORRECTION 9/1/09 - I was told 4% is directly attributable sales but 20% if you account for influenced sales from FIT impressions which are booked outside of the FIT channel. Thanks Janette for catching this). Meanwhile, the rest of the travel and tourism industries have gone through one of the biggest transformations in how they can now sell their tickets to tourists.
I have some travel clients who sell more than 50% of their tickets through the reseller market – I’m talking millions of tickets annually. They offset their marketing and advertising expense by shifting to a sales commission model – meaning they are paying a commission to a reseller for every ticket they sell on their behalf. While all is not always rosy in selling through resellers, it feels odd to me that we are still only sitting at 20% of sales. We are a category – in fact, we are the #1 category that consumers say they want to do when they visit New York City. Why are we carrying the load of selling the other 80% of tickets by ourselves when there are thousands of OTA’s (online travel agents) booking large numbers of transactions for New York City activities online through a commission-only basis?
If you are a hit – it most likely makes sense to sell directly to consumers which is the current model. Why pay commissions on sales when you have such heat that sales are pouring into you? But, if you have a lot of inventory, why not consider shifting some of your marketing and advertising costs towards subsidizing commissions to resellers who will guarantee you sales for payment?
I believe one reason has been an issue of agreeing on an acceptable commission structure. My general sense (and when you look at most of the current FIT rates), is that many producers are reluctant to give a deeper discount on the ticket or increase the commission to the seller. I don’t fully understand why but I really think now is the time that we need to become more dynamic in how we approach setting and adapting the FIT rate.
Why? Because if you look at just a piece of the FIT business of Expedia, Travelocity and Orbtiz, we have the opportunity to have Broadway brands in front of millions of bookings completed each year from consumers across the globe. Yes, many shows are currently listed on these sites now but just about every show is offering what equates to full-price tickets (or more) to these consumers. These are consumers looking for ‘value’ – and with our current FIT rates set the way they are, we are giving them NO incentive to book in advance by offering them a full price ticket. On top of that, our FIT rate also leaves little incentive for our partners to even want to promote us to their audiences. Until we create and adapt our rates that incentivize both the consumer and our resellers, we will just continue to miss the major opportunity of reaching out to tourists before they arrive in market. And, just to stress one other point – it’s not just Expedia, Travelocity and Orbtiz. It’s rental car companies, hotel websites, airline websites – all of these companies are in search for ancillary revenue and they all currently operate through the FIT model.
Here’s where I get the most confused when you think of how we currently do business as an industry. I’ll do a quick formula which I know is far from completely accurate – it’s just meant to illustrate a point.
Many Broadway shows currently promote a $65 discounted ticket price on popular email lists with little concern. We all know this kind of offer immediately comes with a marketing cost of $60 cost-per-ticket (assuming a $125 ticket price). Then, let’s just layer on an advertising costs of let’s just say $20,000 to send out a few emails promoting the discount offer.
If we sell 3,000 tickets @ $65 per ticket we would yield $195,000 in sales. Currently, I feel the mindset says – we spent $20,000 and made $195,000 in sales - that’s a 10X ROI! In some respects, this is true as many of these seats would have gone dead without the push and the incentive.
But, when you factor in the true cost-per-transaction, it tells a VERY different story. When you factor in the discount given on each ticket, you then have an additional opportunity cost of $180,000 that needs to be factored in to the total marketing cost. So, the $180,000 cost of the discount and the $20,000 cost in the advertising, makes it a long-term losing proposition. That’s $200,000 cost for $195,000 in revenue. That is a marketing cost of $66 to sell each-ticket at $65. That’s not sustainable even though it helps reduce losses in the short-term.
With this knowledge, why can’t we be more aggressive with the FIT rate? With the average FIT rate of $95, we still have about $20 worth of wiggle room per ticket when you take out the appropriate commissions to make our resellers work harder for us and still be ahead on selling $65 discount tickets. Why don’t we tier the commission structure? Sell more than x tickets, we’ll give you a rate $85 per ticket. Sell x (+y) and get a rate of $75 per ticket.
If they sold more tickets, you would ultimately have to spend less in marketing and advertising and most likely fill houses further in advance.
I could be totally wrong here – but, at a minimum, I think this needs to be explored. It’s a standard formula being used outside of Broadway in the live event and travel space and my gut just says it’s an opportunity that really needs to be taken advantage of on Broadway.
Trend: The secondary market has continued to become incredibly savvy and efficient using online technologies
Effect on Broadway: We are losing control of the most critical point of the Broadway buying experience – the conversion
Personally, I feel that every ticket sold in the secondary market represents an incremental revenue lost by the primary market. Have you noticed how sophisticated some of the secondary market ticketing engines are? They have wide ranging affiliate programs reselling Broadway tickets on thousands of websites. They are price aggregators giving consumers the best options to search for availability. They aggressively purchase search terms and have incredible organic search placements. They are so far ahead and only getting further ahead in terms of using technology to drive ticket sales. What’s more impressive when you really think about it – they are, for the most part, selling a significant number of tickets above face value.
I think it’s quite telling when you Google ‘Broadway’, ‘Broadway shows’ or ‘Broadway Tickets’ and the number one listing is Broadway.com. All data points to Google being the primary driver on how consumers ultimately connect with brands. As an industry, we spend over a hundred million dollars every year promoting Broadway shows but where these consumers often end up is at a cash register where we most often have the least control.
I wish I had even a possible answer to this problem. Is it a ‘best rate guarantee’ that is offered on the official ticketing sites? Is it a push to stress our legal muscles a bit more to block the way our brands are marketed without our control?
I think it’s something that really needs to be explored as we can only expect technology to advance rapidly and these secondary market folks to be at the forefront of many of these changes.
So, those are just three trends that have concerned me the most as of late. While I like to consider myself a practical optimist, I’m not foolish enough to believe we will be able to adapt to these trends overnight. But I am hoping to begin a conversation with many of our clients and folks within the industry on how we can reduce the amount of money we are leaving on the table and to protect the value proposition of seeing a Broadway show.
I sincerely believe we are at a boiling point calling for change – I hear from folks across the industry who continue to sound the alarm on the problem yet little change is being made. If I can get my head together, I will organize a meeting of the minds particularly around the FIT side of the business in the coming months
Would love to hear your opinion on all of this.
Wed, August 26, 2009
In case you needed any more research to show the impact that social media has had on consumer media consumption patterns, here's an article highlighting the point that four out of five Americans now belong to a social network.
Now, I know there are still a ton of skeptics in our industry about the topic of social media and at what point is the investment worth it and at what size should that investment be. This is a good thing!
Winning in the social media space is not easy. There is a ton of hype and often little talk about the leg work and the extensive creative thinking that is needed to make a social media presence an impactful part of your overall marketing plan.
I think these are the right kind of discussions that we all should be having and I can tell you our agency is doing extensive research trying to develop some basic benchmarks for the industry. In the meantime, take a look at the following research report - these numbers really do highlight how the rate of growth in social media usage is absolutely staggering.
According to the article...
"We'd like to officially welcome you to The Facebook Age. Now, according to a new report from Forrester Research, more than four in five U.S. online adults report using social media at least once a month, while half report participating in social networks like Facebook. And while young people continue to march toward almost universal adoption of social applications, the most rapid growth occurred among consumers 35 and older.
'This means the time to build social marketing applications is now,' said Forrester analyst and report author Sean Corcoran. 'Interactive marketers should influence social network chatter, master social communication, and develop social assets -- even if their customers are older.'"
Read on.
Tue, August 25, 2009
So, there's been a ton of buzz as of late about rumors of many of the major news publishers getting together, led by Rupert Murdoch, to discuss a larger strategy of charging consumers for online content. This has been talked about plenty of times in the past and a few of the major online publications do charge for content but I do get the feeling that there is new pressure beginning to heat up for the leading news publishers to begin getting their revenue figures back up. Online is the one place that many feel has the best growth potential opportunities in the current market place.
Personally, if me paying a couple bucks a month helps ultimately save the leading news organizations - I'm game.
Print advertising is plummeting and online advertising has slowed. In addition, there is no evidence that the current business model will ever be able to slide lost print revenue into filling online inventory. While cost-cutting efforts have been making the finanical reports seem hopeful, these are short-term fixes and over time the popular news media need to figure out new revenue streams that have legs.
It’s clear that Google’s expansion into aggregating news has really rubbed many in the newspaper business the wrong way.
According to the news publishers interviewed in the attached story, "we can no longer stand by and watch others walk off with our work under misguided legal theories. We are mad as hell, and we are not going to take it anymore." Wow.
Read the following story and I suggest you keep a very close eye on this.
Read on.
Mon, June 01, 2009
At a recent travel conference, I noticed something that was very disappointing – Broadway is missing out on significant opportunities happening in the travel industry. Here were all of these travel brands saying “we need to find new ways to make revenue and to deliver ‘value’ to our customers during a difficult economy.” I’m saying to myself, “sell your customers Broadway tickets!”. And, that’s when it hit me - what value can we truly give these travel brands customers when you consider how we currently market our shows? Take it a step further – what value can we truly give any reseller?
With those questions in mind, consider that there are millions of emails sent out each week with special discount offers to Broadway shows. The sellers of these emails have no incentive to stop... the buyers of these emails will continue to get results that illustrate a demonstrable return-on-investment (it's hard to argue a media spend of $7,500 that could convert $250,000 in revenue) and consumers get to pay 40% off the ticket price. As an industry, I think it’s safe to say that Broadway is now completely and undeniably addicted to the primary theatre discount emails – it’s turned into a drug for our industry… its crack for Broadway marketers.
What’s most alarming about it to me is that we are on a path to cut out the middleman in the ticket buying process all together (group sales agents, FIT sellers, etc.) by selling directly to the consumer. I’m not saying “selling directly to the consumer” is a bad thing – I’m just saying that’s what those millions of emails are both directly and indirectly doing (or going to do) and there are serious consequences to those actions that need to be explored.
Nobody is saying “screw Expedia” – but we have completely pushed away the travel industry from really wanting to find ways to enhance our relationship together. In a time where travel brands are pushing 'value', why on earth would they want to offer their customers tickets to a Broadway show at full-price to receive a 10% commission when they know their customer can see a price for that same tickets for 40% cheaper on other sites? We get a ton of value from being on Expedia, Travelocity, Orbitz - MUCH more than the ticket sales report show - remember, people use these sites more as guides rather than necessarily the purchasing path. We get a lot of free exposure which I can say we will be in danger of losing if we don't keep our relationship strong with travel sites.
Aside from the travel industry, look at the group sales market. Nobody is saying “to hell with group sales” – but through our discounting practices we are stripping them of their value proposition to their consumer with every email we send out screaming 40% off. Their customers bought a ticket for $90 - the next day they received an email offer to see that same show for $65 (I would not want to be the one fielding that phone call). Where we used to have a limit of 8 tickets per order – most discount codes don’t really have limits below 20 anymore. I know there is other value than cost when it comes to group sales booking, but we sure as heck are making their life a lot harder by our current pricing strategy.
I don’t see this as an intentional move on behalf of the industry against the group sales folks or FIT outfits – I just see it as a byproduct of the perceived gold mine that email communications has brought the Broadway industry.
The loss of the middleman in the buying process would mean a big savings in paying out commissions on sales. At the same time, it would mean the outlay of additional expenditures to get to the people that those middlemen once spoke to.
This leads to my biggest concern for the future of Broadway marketing (and it’s a wordy concern) - the industry is not equipped to effectively market directly to consumers with the precision necessary to make up for the lost revenue by cutting out the middleman. Furthermore, the industry is not currently equipped to maximize the opportunities with the customer relationship that will keep those consumers returning over time. Simply put, we don’t have the money, technology or manpower to go down the path we are currently heading if we expect long-term success.
As I type this email, there are hundreds of thousands of emails going out for discounts on Broadway tickets with underlying strategies that had the following constraints while being developed:
Lack of Comprehensive Targeting Capabilities: None of the publishers email systems allow us to really talk to consumers in the right way. What percentage of email lists will allow you to target by age, demographic, buying history, etc? It’s not a pretty percentage. Also, all of the primary discount email lists that are used I’m convinced have a ton of overlap in terms of members between each one. If they bought a ticket at one point in their recent lifetime, they are ultimately on a Telecharge or Ticketmaster email list. In short, we are using a shotgun approach and without question, are leaving boat loads of money on the table. Just ask the secondary market that is standing their scooping it up.
A Flawed Tracking System in Which We Gauge Performance: Broadway has a system for tracking sales that has holes the size of China in it. Ever wonder why your discount code sales from your email blasts are no longer bell curves rather straight lines over time? Your discount codes live all over the place. Even if the main ticketing systems found ways to create 'one-off' discount codes (meaning codes that immediately expire after usage) that technology would also have to be deployed on each of the main discount email services (i.e., Playbill, etc.). Don't hold your breath for any of this to happen in the short-term.
Limited Access to Customer Data: Broadway shows don’t own their cash register – we rely on the ticketing systems which, from a marketer's perspective, can be cumbersome. We have limited access to our customers data in real-time. We can’t effectively put the right message in front of the right prospect with any certainty. In fairness, if you ask, the ticketing systems they will give you whatever data you want to analyze – but, this leads to my final point.
Lack of Marketing Resources: Finally, and most importantly, Broadway has marketing staffs that are completely under-funded and/or non-existent. Who has the time to analyze consumer data? Who has the time to manage a customer relationship management system?
I can’t see how Broadway can expect to succeed with these barriers in place.
I am not claiming to have the answer on how to address this. We have a lot of shows right now that are really hurting and I too would feel really good about moving $100k in ticket sales in a discount email blast. It puts butts in seats and keeps people employed – so, preaching on my soapbox during a recession I admit is a bit inappropriate. But, sitting at that travel conference was both too concerning and disappointing not to put some thoughts to paper.
I’m not saying sending out discount emails is a bad thing (hey, we are selling millions of dollars each year using them) – I’m just making the argument that, as an industry, we need multiple improvements in technology and an increase in resources to commit to the time to speak directly to consumers with the precision that is ultimately needed.
I am trying to organize an event with some folks from the travel industry in July to talk about this topic and I hope many of you can join the discussion. Register for our ‘EVENTS @ Situation’ speaker series here to be notified if you want to be part of the discussion. Obviously, would love to hear any feedback you have on the topic by email.
In the meantime, here is an article from May 2008 from Allegiant airlines who was able to remain profitable, sell direct to consumers and integrate in show offerings to their customers.
Read on.
Sat, May 30, 2009
I think the most confusing thing for most marketers to wrap their head around in using Twitter is that there really are so many ways to use it. The reality is you can use it for driving sales, improving customer relations, reaching new audiences – the question is what makes the most sense for your organization? I came across this great article from Mashable that highlights forty different brands using Twitter. There are some interesting travel and entertainment brands that I think you should definitely read about including Marriot, Marvel, Luxor Las Vegas, 92nd Street Y, Carnival Cruises among many others – at a minimum it should trigger some ideas for your organization.
This article is from January, so it is a bit dated (which is scary that five months is considered dated!) – but here are some interesting quotes I pulled from the story.
So why is JetBlue tweeting?: “Our goal would be to make ourselves available, help whenever possible, and to show that our brand is built by real people who care about our customers.”
Lessons learned by Southwest Airlines: “Be honest, be real, be quick, be FUN.”
On how Carnival Cruise Line promotes their Twitter account: “…it’s not in your face. Our online guests visiting carnival.com, our Facebook page or one of our blogs find links to the acct. We let word of mouth do the rest.”
How Twitter is affecting the day to day at Marvel: “Well, it’s an important part of our day to day activities for Marvel.com and our staff & creators have gained more exposure.”
In short, Twitter works – whether it works for your organization is a different question. It will depend how smart you use the technology, what your marketing goals are and what resources you put to it.
Click here profiles of forty different brands using Twitter!
Fri, May 29, 2009
Hype + more hype = Twitter. You hear it and see it on every news outlet and it would feel nothing short of irresponsible to not really question if Twitter is simply a byproduct of hype or if it’s really here to stay. Having spoken with the Twitter folks, I’m quite impressed with their vision and their clear success of breaking thru the clutter with a service that has piqued all of our curiosity. But aside from the hype, there is a school of thought that believes the recent Twitter wave will soon feel like the conversations we all had years back about the idea of buying real estate in Second Life – mostly hype, little reality. The following story I came across says… “According to Quantcast, 72% of Twitter visitors stop by once and don't come back. Only 1% of the Twitter audience visits daily and this group of ‘addicts’ accounts for 35% of all visits. These numbers compare unfavorably to other social networks.” The story goes on to say, “60% fail to return for a second month. This number holds true, even accounting for the websites and applications that feed into the Twitter community.” Wow.
My favorite piece of data though is…”In the March 2009 Nielsen Netview, Twitter has an index of 40 against the demographic of kids 12-17, and below-average index against full-time students. The highest indexing demographic group on Twitter is Males 35-49 (167). I question the youthfulness and hipness of any media that Sarah Palin & Senator Claire McCaskill have embraced before our interns.” LOL!
It’s easy to find coverage on how fabulous it is but I thought I would share the view of a few naysayers. Eventually a strategy for driving revenue will have to emerge and I think at that point we will begin to see a clearer path of where Twitter will land in our daily life.
Read on.
Thu, May 28, 2009
Just about every marketing plan ever created for a Broadway show put the 35 – 54 year old mom as the primary target market. Here’s a really informative article that dives into this demographic by looking at what is labeled the ‘Power Mom’ - women between the ages of 25 and 54 with at least one child and who participate regularly in online activities. These women currently represent 19.2% of the active internet population in the US and have significant online influence that continues to grow, according to a new study from Nielsen Online.
Here's an excerpt from the story...
Nielsen found that the group it labels Established Moms - those between ages 40 and 50 with three or more children at home - are heavy online shoppers. “Established Moms gravitate to online shopping destinations where they are likely to be receptive to highly relevant promotions to allow her to indulge herself while saving on her family’s needs,” said Jessica Hogue, research director, Nielsen Online. “However, marketers shouldn’t rule out the rising prominence of social networking sites among this cohort, which is one of the fastest growing demographics on Facebook.”
Top sites visited by Newbie Moms - more recent mothers between ages 25 and 34 with one or two children in the home - include several social networking destinations. Newbie Moms are more than twice as likely as the average web user to visit Blogger, and 85% more likely to visit Facebook, Nielsen said. “For Newbie Moms social networking is literally woven into their day-to-day existence,” said Hogue. “Newbie Moms use the internet to gather information about everything from nursery décor to choosing the right pediatrician. As they navigate caring for a newborn, returning to work or managing a growing household, the internet acts as a lifeline to answer worrisome middle-of-the-night questions and to build community.”
There is so much great information in this article, so be sure to read it in its entirety.
Read on.
Thu, May 28, 2009
I’ve seen numerous reports that say, for the most part, we will see the same number of travelers this year in major markets (including New York City) but I’m consistently seeing data showing that consumers will be spending significantly less per vacation. Take a look at the below article – the one point that should be slightly concerning to us is that 60% of those surveyed said they are hoping to economize their leisure travel this summer by finding less expensive activities or meal options. I’m assuming a Broadway show would not fall into the category of ‘less expensive activities’. Let’s keep a close eye on this.
Read on.
Wed, May 27, 2009
We have a handful of new job openings at Situation Interactive in our New York office and we invite you to pass this along to your friends and colleagues. This is an exciting time for us and we are looking to attract the best and the brightest, so if you know of anyone you think might be a good fit for one of these positions please have them follow the application direction on the links below. You can also reach out to me directly.
Senior Account Executive
Senior Designer
Traffic Coordinator
Web Developer
|
 |
 |
|
|
|
|
Signup 
About 
Archives
