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March 22, 2012 


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INDUSTRY PROFILE


Russell Wallach
Posted: March 22, 2012
VBy Larry LeBlanc (CelebrityAccess MediaWire)

Live Nation Network president Russell Wallach oversees all sponsorship and marketing partnership programs across venue, online, mobile, and artist platforms at Live Nation Entertainment.

Under his leadership, Live Nation Network has developed a broad range of integrated marketing programs with such respected global brands as UPS, Citi, Coca-Cola, Anheuser-Busch, HP, State Farm, and Starwood Hotels.

Digital and mobile interaction has brought increased opportunities to connect fans to their favorite artists; to their friends; and with each other; while providing advertisers with direct access to passionate, highly-engaged music fans that hopefully will become brand consumers.

Wallach, and his digital media talent force of 20, are trying to understand music fans’ habits; if not the live music experience itself. The team wants feedback on how fans hear about upcoming shows; if they get their friends to buy tickets to a show they are attending; and, if the fans are mobile texting and sending photos to friends and others while an event is underway.

Live Nation’s app now handles ticket purchases, concert logistics, and branding which solved a marketing challenge for the company. Research had indicated that a major reason fans didn’t attend a show was because they didn’t know about it. With the Live Nation app, which is linked to a fan’s iTunes library, every time a band in their iTunes library is playing locally, a fan gets a message about that show, and can purchase tickets to it.

In the future Live Nation will be incorporating further capabilities into the app for greater fan engagement. There will be things Live Nation will be doing at their venue with QR codes so fans will be able to get discounts on different products and services in the venue or, perhaps, enable fans to upgrade their seats.

All this marketing activity is centered around the fan’s live music experience—from searching and securing tickets, to planning for the event, purchasing related merchandise and sharing memories of the event with friends. Each stage is an opportunity for Live Nation and brands to build on the strong relationships between artists and their fans.

Meanwhile, artist affiliation continues to provide an intensely powerful marketing tool for advertisers. In addition to engaging fans directly at shows, advertisers can also tap into the popularity of artists by integrated use of social media, mobile tie-ins, and other media touch points.

Wallach, however, emphasizes that in order to be successful, artist/brand partnerships must be truly genuine; that not only raise the profile of the artists, events and brands, but also target specific consumers, and provide added-value to the fans.

Prior to his current capacity, Wallach has led the Naming Rights Division for SFX Sports and ProServ followed by being: senior VP National Sales and Marketing for Clear Channel Entertainment; executive VP, and then president of National Alliances for Live Nation; and then president of Live Nation’s North America Sponsorships division.

You are based in Washington. D.C.?

I have an office here, and I have an office in New York. I’m pretty much on a plane much of the time.

Your team greatly expanded this year.

We started 2011 with about three people in our digital team. By the time that we make our final couple of hirings in the next couple of weeks, we will have about 20 people. It is because of the explosion of our social, mobile, and online business. We now have digital sales people across the country. We have media planners. We have account managers. We have had to staff up because of the demand in the marketplace for exciting music content; and exciting music inventory, online and on mobile. I see huge opportunities. It's just the beginning for us in really building out our world class digital sales and market team.

These are still frontier days for brands utilizing mobile platforms and music.

People have been doing sponsorship, and music for a long time. I think that it has just been in the last three or four years that you are truly seeing incredible activations, and really great ways for people to take full advantage of it.

What changed was that technology people became more engaged with music.

I think that’s right.

Your division is a significant revenue stream for Live Nation?

Yeah, we are a big revenue stream for the company.

Does Live Nation receive a percentage cut for sponsorship deals or is the back-end on increased ticket sales, and lowered touring costs?

Every relationship that we have is very different. At the end of the day, we’re focused on developing partnerships. The majority of stuff that we do is not specific artist focused. We have this huge platform. We have 80 plus venues. We have this huge digital platform. Many of our clients are not artist centric; they are Live Nation centric.

Your team handles promotions at Live Nation’s amphitheatres across the country.

We are focused this year on launching new exciting products in the venues. So we are building lounges, viewing decks, technology spaces, and Wi-Fi areas. We are building all of this to be able to do mobile QR code programs. We are building all of this out of a demand from our sponsors who are saying, “We love the live music experience; we love your outdoor venues; we love the diversity of the shows; we want there to be more opportunities to engage with the fans inside.” We have seen that many of the big arenas have spent a lot of money to build all of these clubs and different things onsite; so we are really looking now to enhance those types of opportunities at our amphitheatres. We will be launching a bunch of those this summer.

Certainly, naming rights deals remain lucrative, but are challenging to put together.

Naming rights in the sports world, definitely, is more complex; there are much bigger ticket items because of all of the television media. But almost all of our outdoor amphitheatres have a naming rights partner. We continue to see real interest in music venues. It’s not at the level financially of some of these new big brand-new $400 or $500 million arenas, but we do great with our amphitheatres.

The days of an advertiser just throwing up a banner at a concert are long gone aren’t they?

They really are. The days of putting up a banner, and being worried about how many people are going to see that banner are gone. It really is now about social media, mobile, content, and access.

With mobile providing access and content, the sky is the limit with what can be introduced with music.

I think that you are absolutely right. I think that we are just scratching the surface. We are now seeing mobile doing so many different things for us. Not only do you have the Live Nation apps; and not only are you able to buy that ticket, and find out about the show; but, in the future, you are going to see the opportunity to order a beverage from your seat through the app; or be able to order some merchandise from the app while you are at the show. Or making sure that there are no lines at concessions or at the bathrooms.

We are going to continue to innovate, and use things like our applications to make the experience onsite even better.

Today’s fan is actively mobile at concerts. This has led to a more interactive experience. Not just between the audience, and the artist onstage; but between the audience, their friends and whoever is out there. That is mind-blowing.

It really is, and it’s happening (in) real time; you are able to see it happening real time. All you have to see is the posts, and the tweets coming in real time from a show, and you are seeing what people that you know and those you don’t know, are saying about the show. You are seeing pictures. It is creating this social experience. That’s really key today.

People not at the show become part of the experience.

That’s correct, and that’s a great point—that the content, and the conversation is interesting to even those who are not at the show. We think that’s a great way to help us sell more tickets—that there’s more conversation. Maybe, you didn’t know the show was coming (to your city). So now you see the tweets from other markets, and you quickly check, and realize, “Hey that show is coming to my city. Let me go and buy a ticket.”

With the Live Nation app, fans know what shows are coming.

We want everybody to have the Live Nation app, and they will never miss a show in their city.

Eventually, QR codes will add more to the concert experience.

Absolutely. That’s all coming.

QR codes, and location-based services make it possible to identify fans at a show. Brands see what’s going on at a concert—and what fans are buying. They can then utilize location-based mobile marketing to target fans. That’s fascinating.

It is. With innovations like our Facebook integration with the interactive seat maps, you can see where your friends are sitting in the venue. Innovations like that make the whole process of going to the concert that much more fun. You can not only interact with your friends prior to going to a show, but you are actually able to see what friends of friends are doing or are preparing to go to a show. Or you are able to see what your friends from other cities are doing—see their pictures or see their tweets or their Facebook posts from when they went to the show. All of that is creating a greater community. I don’t believe that there is a better community aggregator than live music. We are taking full advantage of that every day in trying to figure out how we can bring the brands into the mix in a relevant way that provides value to them, but also is valuable to the artists.

Also important is determining where fan and venue data fits into the overall marketing strategy of the brand. It starts with that, right?

Music is just a means to an end. It is part of an overall marketing mix. Companies aren’t going, “I’m going to do something in music, and that is going to cover my entire marketing strategy.” It is one key piece for a brand as well as part of an overall advertising, and marketing strategy.

Are advertisers generally more savvy about what they are seeking in music-related tie-ins than, say, five or six years ago?

I would say that everybody is more savvy today. The brands are more savvy; the agencies are more savvy; and we are more savvy. Because of technology, innovation, and the social aspect of music, there are so many different ways now that a brand can be involved with the music experience that it has opened up many new doors and many new opportunities; many different exciting ways for the brand, the bands, and the fans to engage.

Two successful marketing campaigns you oversaw in 2011 were Weezer with State Farm, and 30 Seconds To Mars with HP.

Both perfect tie-ins for the band and the brand. Those are really the ideal partnerships. Not all of our relationships—online, mobile and social—tie in with a specific artist. In the case of HP, they were launching a (new e-print technology) product, and Jared Leto of 30 Seconds is one of the most tech savvy individuals out there today. So it was just a real natural fit. Weezer was incredible working with State Farm. When it all comes together, and we can tie in with the artist—and, as we discussed earlier it’s not just about a tour sponsorship—it is really a fully integrated experience that lives at the show; that lives online before the show; that there is content after the show; there is a great experience all around. That is what everybody is looking for.

In 2009, you oversaw a tour sponsorship deal between the Jonas Brothers and Burger King. That’s not that long ago, but there’s been so many changes in sponsorship deals since.

What we saw there was the early stages of the value of viral content because we got Burger King to do a really fun video with the Jonas Brothers that did great on YouTube, and went truly viral. So it was good for the brand. One of the marketing messages that the brand was using, we were able to incorporate into a partnership with the band, and it was able to go viral. That was really early days. But, overall, you are right. What sponsors were doing with bands four or five years ago has drastically changed today. Even four or five years ago, it was more about association, and branding. Now there are many more metrics that we can look at to determine success as we are building a program from scratch.

The Live Nation Entertainment merger with Ticketmaster in 2010 has obviously resulted in increased cross platform opportunities.

There are a couple of things that the Ticketmaster merger has brought us. One was that the combination of Live Nation and Ticketmaster has tremendous reach, both online, and on mobile. We now have in excess of 17 million uniques across all of our different sites. We have over eight million (uniques) with our mobile sites. We have all of our social followers. Then the real key—you have heard Michael Rapino (president and CEO of Live Nation) talking a lot about all of the data that we have from these hundreds of millions transactions on Ticketmaster; and this incredible data that we can now use to help our clients sell more tickets is also giving us incredible insights into the purchasing habits of the live entertainment consumer.

There’s the new updated app as well.

Yeah, for Ticketmaster.

[Ticketmaster recently launched its new Facebook app. Fans can purchase tickets on Facebook, and share with their friends what events they are attending. Ticketmaster can also make recommendations based not only on whether a Facebook user likes a given band, but also on the user's Spotify listening habits or Facebook data.]

While connecting bands and sponsors, your team can arrange access, pre-sales, preferred seating, private events, and even in-stores that may be part of an end-to-end marketing strategy.

That’s exactly right. And that is really one of the key points of differentiation; that we are truly end-to-end. We have mobile, and social (marketing) to help market it. We have data to make sure that the brands are picking the right artists; and are targeting the right consumers on our websites. We have this tremendous mobile social online. We own the venues, and we’ve got a team of creative marketers that are able to develop promotion programs. They know how to execute the programs. So we are able to go to brands and show them how to do everything—how to make it work end-to-end—and we work closely with the brands and with their agencies to deliver real value.

Advertisers need research in order to figure out who they should be working with. Does the act fit? What’s their audience?

We do all of the research. This is about us going in, and working on behalf of the brand to create the right fit. We know how many tickets an artist sells. We know what the chatter is, and what artists have velocity through our Live Analytics business, and through BigChampagne (BigChampagne Media Measurement) whom we recently acquired (in Dec. 2011).

So we have all of that data.

We deal with artists all of the time so we know what artists may be more friendly to brands and which ones are not.

The other key thing that we talk to brands about is that if they are going to work with artists they need to recognize that they are artists. That they (artists) have true creative ideas. That they want to collaborate. That they have a vision for their brand as well. And that, in many cases, the brands can learn from artists about what they have created with their brand.

If you think about it, every brand in the world would love to have 20 million passionate fans on Facebook like Lady Gaga does. She’s one of the greatest brands in the world. A lot brands today can learn from artists and brands in terms of building a social community; about delivering a message; and how you communicate to your fans. All of that is hugely important as you figure out a partnership in the music space.

Obviously, artist affiliation remains a powerful marketing tool in itself.

Yes. Absolutely.

But a band has to understand that an advertiser’s goal is to drive sales.

It is almost always ultimately about driving sales. Whether it is directly or indirectly. So if it is something that is being taken to retail or needs to be taken to retail, then yes, music is something that will drive passion. If it’s the right offer; if it’s the right idea that will make me go into that convenience store or supermarket or department store to do something—whether it is to get a ticket or get access or have an opportunity to win something—so yeah, absolutely. So if the brand wants to take it (a product) to retail, and there’s the opportunity to do that, we work with them to figure out strategically how all that works.

What generally is the tipping point with artists for things that they shouldn’t agree to do?

I would say that with each situation that it has to feel right for the artist. The artist should never do anything with a brand that is making them uncomfortable, creatively or otherwise. We talk to the artists, and we talk to the brands. The key for us is letting the brands know (about the band or artist); providing the brands with as much information, and insight into the artists, and the bands so that they really understand them. They understand things that they have done in the past. Things that they haven’t done in the past. Things that they like. What are their interests? And we use all that to help build a program so that it is really more organic.

When you sit in a room (with sponsors, artist representatives, and artists) and you really want to make something work, you figure out what will make sense, and what won’t make sense. I don’t feel that an artist should do something that makes them uncomfortable. The flip side is that I don’t think that a brand should do something that makes them uncomfortable.

Most top artist managers today know what it takes to nail down a brand deal.

When you are looking into creative, we are always looking to bring the manager into the discussion. If it makes sense, we will bring the artist into the discussion if it’s far enough along. We want everyone to be very, very clear in terms of expectations, needs, timing. All of those things are so critical, and there are benefits to both sides. The more that both sides understand key things the better it is. “When is your product launching?” “When is your record coming out? When are you going on tour?” “When are you going to be at retail?”

All of a sudden, you’re like, “Okay, where is the overlap? Where are the opportunities where we can help each other?”

You have worked extensively with sports and music. Both are based on fan passion.

Sports is similar, but it is a slightly younger consumer that goes to a music show than to sports (events). Therefore, there’s more involvement with the latest technology, and with the latest gadgets. I think that you see a lot more happening with all of that with the younger demo in music. The passion…I couldn’t agree more. People are passionate about sports; and they are passionate about music. Look, it’s the same people. If you love music; you love sports. In some cases, you just interact with them a little bit differently.

Is what is happening with mobile and social media in music happening in sports?

It is. I am seeing a lot of innovation with local sports teams and the leagues. So I would say, “Yeah, absolutely.” Sports have been doing all of this a long time. They have got a huge and passionate fan base. So it’s happening everywhere, but I just think that music is on the cutting edge. The biggest followers in terms of Facebook and Twitter are not sports stars; its artists. I think that it shows, from a standpoint of social and mobile, that music is leading the charge.

Your first concert experience was Cheap Trick in 1983?

First concert experience, Cheap Trick at Madison Square Garden. I want to say it was 8th grade. I think that someone dropped us off. I look at it now and I can’t believe my parents let me go into Manhattan. I grew up in Queens.

You could have been seeing the Ramones on home turf.

The Ramones, as you know, were a Queens’ band. So we saw them play at some festivals in Queens. I grew up a music fan.

Were you a sports jock?

I would say that as a kid I was more focused on sports than on music. It has changed over the years.

You started with Live Nation when it was SFX Sports and ProServ in the early ‘90s?

I actually started with ProServ in 1989. Then ProServ was acquired by SFX. From there I was on the sports side of the business for a year or two. Then I saw that the company was much more focused on the music side of the business than sports; and there was an opportunity to kind of start a new business of national sponsorship on the music side (with Clear Channel Entertainment’s Global Venue Management & Sponsorships group), and I took that opportunity.

[ProServ was acquired by SFX Sports Group in 1999. ProServ had been created in 1970 in Washington, D.C. by attorney, and former professional tennis player Donald Dell and Frank Craighill. At its peak, ProServ represented more than 200 professional athletes and coaches including: Michael Jordan, Patrick Ewing, Stan Smith, Arthur Ashe, and Jimmy Connors. The company also promoted professional sporting events, and launched ProServ Television to handle sports television production, and rights representation.]

What brought you to the sports world?

I grew up as a big sports fan, and I always thought that it would be fun to work in the sports business. That’s why I started in the sports business. I was fortunate to work in an industry that I was interested in—always enjoying music but, more for me, it was about the platform that was being built on the music side. I had never seen anything like it. I felt like there was much more opportunity to grow, and do new things on the music side versus the sports side where you have the sports leagues, a lot more restrictions, it’s tougher to get into, and there are a lot more rules. I felt that music side of the business would be a lot more entrepreneurial and creative. Fortunately, I made the right decision.

What’s your education background?

I went to the University of Massachusetts up in Amherst for the reason that they had one of the best sports marketing and management programs. I am one of the few people who went to college to hopefully break into an industry. It was basically sports business, I took business classes and classes in sports marketing and in sports law.

You didn’t become a sports agent?

I didn’t want to be having to work for someone 24/7. I thought that working on the marketing, advertising, sponsorship side of it (sports) would be a better fit for me. Then I worked for one of the other founders of the industry, Donald Dell (at ProServ).

You seem to enjoy what you do.

I love it. I love getting on the road. I love meeting with clients. I love our team. The management team at the company is great. It really is. It’s nice that you can work with people, and also enjoy going out for a beer with them. Whether that’s people on the team, people that are my peers, people that I work for, or my clients. You can’t say that about a lot of jobs or about a lot of positions.

Larry LeBlanc is widely recognized as one of the leading music industry journalists in the world. Before joining CelebrityAccess in 2008 as senior editor, he was the Canadian bureau chief of Billboard from 1991-2007 and Canadian editor of Record World from 1970-89. He was also a co-founder of the late Canadian music trade, The Record. He has been quoted on music industry issues in hundreds of publications including Time, Forbes, and the London Times. He is co-author of the book “Music From Far And Wide.”

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