Spring 2000: E-Commercials Help Drive Sales for BMG

Attracting the attention of record chain buyers isn't an easy sale. With so many new bands competing for airtime, the industry's marketers are always on the prowl for innovative promotional tools and techniques to help drive album sales.

RCA Records (http://www.rcapublicity.com) found one. RCA is a subsidiary of BMG Entertainment North America (http://www.bmg.com), which in turn is part of Bertelsmann AG (http://www.bertelsmann.com). Bertelsmann, located in Gutersloh, Germany, is the world's fourth largest media company, with sales exceeding $17 billion in 1999 and more than 64,000 employees in 53 countries.

Last year, RCA Records sought a cost-effective means to promote the hard rock German group Guano Apes and American band Vertical Horizon to about 100 key record chain buyers nationwide. They launched a series of specially targeted 30-second e-commercials that were delivered directly to the email address of the individual buyers, says David Fitch, senior vice president of sales for RCA Records. "Both bands were getting limited exposure on radio and from the industry press but they weren't on the retail buyers' radar screen," says Fitch.

RCA Records retained Aliso Viejo, CA-based eCommercial.com http://www.ecommercial.com) to develop the e-commercials. eCommercial is a provider of proprietary rich media Internet communications and marketing automation solutions. Ross Teasley, e-Commercial's vice president of marketing, says the e-commercials created for RCA Records were designed to deliver content quickly and with minimal clicks.

"We utilized executable files-an ultra-thin Web browser with video codec (encoding and decoding) capabilities," he explains. "No plug-ins and streaming were necessary. In essence, what we did was take the Web browser functionality and threw out all the non-essential technical details to deliver a platform that was simple and easy to use."

The first e-commercial touting Guano Apes was emailed to major buyers (Tower Records, Circuit City, The Warehouse) nationwide on Dec. 6, 1999. The first 15 seconds of the clip featured Fitch making what he referred to as his "Crazy Eddie" sales pitch to quickly capture the attention of the record chain buyers. The remaining portion of the e-commercial contained a 15-second video clip of the band.

Two e-commercial versions for Vertical Horizons were emailed in January. Although both provided video clips of the band and intros by Fitch, the second version contained a reminder to buyers that the $13.98 list price was increasing to $16.98 by Jan. 21.

The e-commercials also provided extensive information on the respective bands. Click on "Check Out Airplay," for example, and buyers could obtain extensive demographic information such as the number of CDs sold that week, a current list of radio stations airing the bands' music, and a comprehensive list of online/print/electronic media that had generated news stories. "Check Out Band" provided extensive bios on each band member. A third icon, "Send Us Your Comments," enabled buyers to provide feedback.

And that feedback, according to both Fitch and Teasley, was overwhelmingly positive. The response rate (viewership) for the Guano Apes e-commercial was 42 percent with an overall click-through rate of 41 percent. Average video views per viewer were 1.6; average clickthroughs per viewer was 1.7. The response rate for the Vertical Horizon e-commercial was 46 percent, with an overall click-through rate of 43 percent. Average video views per viewer were 1.7; average clicks per viewer were 1.7.

"Although it's hard to quantify how this helped increase sales, we do know that it created the proper buzz and spin," Fitch says. "When the e-commercial debuted, we had moved about 20,000 units of Guano Apes' album. We're now at 90,000 units. The Vertical Horizons album has already gone gold and is headed for platinum."

E-Commercial developed the clips gratis, as these particular e-commercials were conducted as part of a beta test. There was a nominal charge to film inside BMG's studio and Teasley says the average cost normally runs about $5,000 for a 30-second e-commercial.

Fitch added that he plans to use e-commercials on a regular basis. "We now know that e-commercials have a higher click-through than other interactive tools because of their pass along effect," he says. "Many buyers wanted their colleagues to view the clips so this is viral marketing at its best. It has proven to be an effective business-to-business application for us."

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