Reference no: EM131187416

"E-Marketing class"

1) Which one of the Internet properties and marketing implications is best illustrated in the article? Explain why.?

2) Which one of the “e-business and e-marketing opportunities flowing from the Internet’s unique properties” is best illustrated in the article? Explain how you know.?

3) Does the article best illustrate the concept of customer engagement, content marketing, or inbound marketing? Explain why.?

The article below:

What is an email address worth to a rock band these days?

A fan who gives Arcade Fire his or her email address spends, on average, a lifetime total of $6.26 to buy music, merchandise and tickets directly from the Canadian indie-rock act.

Meanwhile, the Icelandic band Sigur Ros boasts an email base of fans worth an average of $10.91. And followers of the progressive rock band Umphrey's McGee generate an average $32.96.

Industrywide, the average fan email address has a value of about $3.78 in direct purchases from artists over the owner's lifetime, according to new data from Topspin Media Inc., a six-year-old Santa Monica, Calif., company that manages online stores for more than 70,000 artists.

That may not sound like much, but it is nearly four times the price of a single from Apple Inc.'s iTunes Store. In Topspin's view, those numbers should make it a no-brainer for bands to give away a song or two to new fans in exchange for their email addresses.

Fans who get free music in exchange for an email address are 11 times more likely to make future purchases directly from a band than fans who get nothing for forking over their contact details, Topspin's data show. Most acts sell less than 10% of their music directly to fans, while Ticketmaster typically lets bands sell about 10% of their concert tickets directly, usually to fan-club members.

Now, artists will be able to see how their own fans stack up against the average as Topspin launches a new feature that lets clients track the average value of their email addresses from their mobile phones.

Topspin founder Shamal Ranasinghe said he hopes the data will help bands amass more lucrative fans and eke out more profit from their existing followers, primarily by selling and bundling a wider range of products at a broader spectrum of price points -- services that Topspin provides for a fee.

But other companies say the value of a music fan's email address is outstripping its direct- sales potential. Mike Doernberg, chief executive at ReverbNation -- a digital platform used by three million bands -- said that as the price of music has declined and consumption has proliferated, fan value is now better measured by what brands will pay to reach a given act's following. That calculation includes demographics, income and location.

"The value of a fan isn't so much in what they're going to buy. Fans have become a currency that bands can use" to land corporate sponsorships and synchronization deals that put their songs on commercials, videogames and TV shows, said Mr. Doernberg.

Direct-to-fan sales still account for a tiny slice of the pie for most big acts, but they can be far more profitable because they circumvent retailers and other middlemen.

Meanwhile, some fans remain willing to pay for a sense of connection with their favorite acts.

Sigur Ros, for example, has collected fan emails that generate an average of $10.91 by selling on its website high-margin goods from hand-knit Icelandic wool sweaters to driftwood-scented candles, according to the band's manager.

By bundling its new album, "Reflektor," with early access to concert tickets, Arcade Fire has been able to raise its direct per-fan revenue. The band has sold nearly 15% of its new records in the U.S. and 20% in the U.K. through its own website, circumventing such digital middlemen as iTunes that eat into its profits.

Umphrey's McGee did even better with fans who buy an average of $32.96 in goods directly from the band, largely because it typically offers more than a dozen concert-travel packages that accommodate a range of budgets, plus unconventional experiences, such as post-concert bowling and burgers with band members.

"We've maybe removed a little bit of the mystique, but it's worth it," said Vincent Iwinski, the manager of Umphrey's McGee. "We give them a lot to spend their money on."

Topspin's data, based on 30 million transactions over the last five years, shows that fan values range widely, depending largely on what and how much artists choose to sell or give away.

While calculating customer value is standard operating procedure in the world of corporate marketing, it is a relatively new concept for the music industry, which has traditionally been more focused on short-term record sales than long-term loyalty.

Several months before attempting to sell anything, Topspin advises clients to embark on fan-acquisition campaigns that involve trading products for email addresses. The company believes email remains the most effective way to communicate with the fans who are likely to spend the most money, despite younger-skewing options like Twitter.

Email addresses have become more valuable over time because technology now allows bands to email fans in certain geographical locations about concerts in their area, said Richard Jones, who manages the Pixies, a Topspin client whose fans are valued at $4.29 each.

"If you can sell shows without paying for advertising," he said, "the band makes a lot more money."