2007 Marketing Moment: Radiohead’s “In Rainbows”

While this blog typically focuses on the marketing of consumer technology, I couldn’t pass up the chance to review what I found one of the most viral and successful marketing campaigns of the year. It applies, in general, to what we do here at Stage Two, as it deals digital downloading, and the concepts set forth could most certainly be adopted by consumer electronic companies.

Unless you were living under a rock for the better part of this year, you would have most certainly heard about British rock band Radiohead’s announcement that they would offer their new album, “In Rainbows” to fans via a ground shattering new business model: Pay What You Want. Fans could download the album for whatever price they deemed worthy, even if that price were FREE.

Radiohead (and their management, more so) harnessed the power of a perfect storm. Consumers have long been suffering the fallout of a death match between an ailing RIAA and the 800 lb. guerilla that is the internet, and their announcement couldn’t have come at a better time. The story was immediately picked up by everyone, from the smallest music/tech blogs to the largest traditional print/television press across the globe, much of it virally. Music fans cheered, the RIAA heralded it as a death knell, and Radiohead basked in the notoriety.

In the weeks after the announcement, however, it turned out that the campaign was, in fact, a giant PR/Marketing stunt. Consumers wondered why the album had been offered in such a low quality bitrate (160 kbps, to be exact). As it turned out, this was due to the fact that Radiohead had been planning on releasing the album in a traditional CD format, (as an $81 super premium box set, no less) all along. Due to the huge buzz created by the campaign, they in fact found themselves in an old fashioned bidding war over the album with major distributors. It was a high-class problem to have and the digital downloads peaked at 1.2 million in October, with the average price paid at approximately $6/download. Although the situation may have left a bad taste in the mouths of some fans, it did little to damage the huge amount of positive coverage they received.

So what is the take away from all of this? Firstly, allowing consumers to decide what they would pay for a product or service takes the power away from the corporation and puts it squarely in their own hands. This is called individuation of consumption (read The Support Economy, by Shoshana Zuboff and James Maxmin, for more on the concept), and addressing it can have giant benefits in relation to customer acquisition and loyalty. It’s a highly innovative concept, and we’re guaranteed to see more companies embracing it in coming years.

Secondly, and perhaps most importantly, regardless of how exquisitely planned your marketing strategies are, there is always a bit of the ol’ “being in the right place at the right time”. This is not to be confused with luck, and does not mean one cannot plan for it. A company (in this case, Radiohead) can assess the consumer’s pain point (paid vs. free downloads), and wait for the correct “pain apex” (mounting anger towards the RIAA) to offer a solution (Pay What You Want). Regardless of the true intentions of the “In Rainbows” campaign, it set forth a completely new idea for artists (and companies) to address and engage consumers, and I applaud them for their revolutionary and brilliant marketing tactics.

Test 2

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OLPC missing a golden opportunity

My friend Michael Gartenberg made some comments today regarding the OLPC (one laptop per child) “G1G1″ program. When I was in Boston with Bug Labs last month I had the opportunity to meet with some of the OLPC staff. Great folks, really dedicated to a good cause (which obviously has room for improvement, but it’s better than nothing). While there I made a comment about how I felt the “buy one, give one” is a great starting point, they are missing out on a huge opportunity to raise even more money and awareness.

The current program (which ends on Nov 26, so get moving!) allows anyone in the US or Canada to “purchase” an OLPC (aka XO Laptop) for $399, which automatically donates a second OLPC to someone in need. Very nice. But what about people with a higher net worth, who are interested in supporting the cause with more money? Sure, they can donate more cash, but in my eyes this is a total opportunity to have a big win-win by appealing to ego.

Whether we all like it or not, there’s a certain amount of pride/vanity associated with charitable contributions. There’s a reason most buildings on campuses have names on them, I don’t recall a single class in Anonymous Hall. People like to get a bit of recognition for their charity. And there’s absolutely nothing wrong with that. I think the OLPC initiative should support the ability to gain recognition.

My proposed program would have the ability to donate higher amounts, say $2500, $10K, and up. At each plateau you’d give XX laptops to good causes, and you yourself would still get just one. The difference is you’d get a “special” one. The special part? Different colors. For example, instead of the basic green, at $2500 you get a blue one. At $10K it’s purple. At $50K it’s gold. Etc…

This is a very simple win-win in my eyes. It’s a win for OLPC, as they’d likely raise more money from those who have it at their discretion. Further, they’d be doing it with a method that has virtually no impact on their cost structure, it would cost literally pennies more to stock a few extra color chassis (vocab tip of the day: the plural of chassis is… chassis). It’s then a win for those interested in the donations, as they get a little bit of extra recognition for their contribution.

Sure, in an ideal world people would just give whatever they can to support causes. But we don’t live in an ideal world. We live in a world with many different motivations, and whether good or bad, I’d rather leverage ego-driven desires if the result is greater altruism.

Hello world.

Welcome to our Web site and blog. As you can see, we’re starting a little sparse and logo-free, but that’s because (a) we’re focused on our clients’ work, and (b) we couldn’t really find a designer we loved. But we didn’t want to let that pesky little detail of “can’t find a good logo” slow us down (any more than it already has, that is).

As an intro, I’m Jeremy, the founder of Stage Two Consulting. You can read more about me and the rest of the team here, but we’re basically a small group of marketing folks here to help consumer technology companies. In a nutshell, we focus on marketing as it pertains to product, strategy and communications. We’ve got a strong understanding of how marketing has dramatically changed since the 90’s, and are here to help bridge that gap for companies with good ideas or products and how to best reach the modern consumer. Read here to learn more about our services.

This blog is going to be our vehicle for talking about consumer technology marketing. We’ll put up case studies about tactics that were (and were not) successful for our clients, and also openly share a lot of our general philosophies and strategies while we are at it. Think of this as a blog about “open marketing”, as we feel strongly that’s a key component about what we do.

Thanks for visiting, and please, call anytime.