FREEDOM

GROOVEto

Plan BookPrinciples of Advertising

Fall 2010

Created by:Cameron CareyCaitlyn FralinSean MunleyLauren PezzeLaura Turpin

Table of Contents

Section

Executive Summary ..........................................

Situational Analysis ..........................................

Problems and Opportunities ...............................

Goals ...............................................................

Objectives .........................................................

Markets/ Segments/ Publics ...............................

Creative Brief ...................................................

Strategies .........................................................

Media Tactics ...................................................

Budget .............................................................

Evaluation ........................................................

Summary/ Recap ..............................................

Appendices .......................................................

Page Number

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2

Grooveshark is a free online music service whose primary ambition is to change the

way we find and listen to music. The service allows users to pick and choose songs that they

can add to their library or use a radio function that picks songs similar to their preferences.

Our motivation behind creating this campaign is the fact that Grooveshark has zero advertis-

ing. By creating a strategic advertising campaign, we believe Grooveshark could grasp control

of the online music market and significantly amplify revenue. Although Grooveshark attains

most of their revenue through advertising on their site, this campaign focuses on increasing

VIP subscriptions because this service has the most potential for expansion.

Executive Summary 3

Situational Analysis

Grooveshark VIP is an online music service that allows users to stream any number of

songs in its library to their mobile device or computer as long as they are connected to the In-

ternet. The company lists three objectives on its web site: To improve the connection between

people and music. To change the music industry in ways they seem so unwilling to consider.

To have fun.

Pandora Radio is currently the industry leader in “Internet radio,” but that term has

yet to be truly defined. The Grooveshark service, while technically an Internet radio service,

allows the user much more freedom and depth. A user cannot only select the music they want

to listen too; they can view their friend’s tastes or have music chosen for them based on simi-

lar songs they like. Beyond its role as a music service, Grooveshark offers some social media

aspects such as user profiles. We hope to connect the dots between bands, record labels, and

fans to create an all-inclusive music service platform on the web. What defines Grooveshark

as a truly unique service is that it allows users to access music across multiple platforms re-

gardless of what device they choose to listen from or where they are. With every song instant-

ly accessible on-demand, users no longer need to download music to have complete portability

and control.

Our VIP subscription service allows users to download Grooveshark as an application

on both their computer and mobile phones, removing advertisements and allowing access to

our library without going to our web site - and the mobile phone application allows streaming

from anywhere you have signal. This appears to be an excellent opportunity for growth, the

next step in the evolution of music; a library consisting of every song, ever, with you where ever

you go.

However, Grooveshark’s most persistent and increasing source of revenue is advertise-

ment. A campaign would not only increase the subscription sales to our VIP service, it would

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generate Internet traffic and increase our free users as well. Additionally, vast amounts of

data are collected on individual consumers, which are valuable to advertisers targeting specific

demographics, as well as artists or record labels seeking intelligent promotion.

Currently, Grooveshark caters to young adults between the ages of 18 and 26. They

come from a variety of backgrounds with several different tastes in music. Although Groove-

shark offers numerous songs from several different genres, our competition uses the same ap-

proach to variety. They include sites like Pandora radio, created in 2001, which uses a program

called The Music Genome Project to tune into their customer’s wants. There are also services

like Rhapsody, which offers unlimited music for a flat monthly fee. While Grooveshark is rela-

tively new to music radio compared to our competition, we strive to be the one stop music shop

platform to differentiate ourselves.

5

Problems and Opportunities

European royalty rates are much higher, and so growth overseas is questionable. Inter-

net radio is a relatively new product and market and so it is somewhat unstable. For example,

Pandora, one of our competitors, was on the brink of collapse in 2008. The ‘new’ status of

Internet radio will likely benefit us, as many people will be open to alternatives since Pandora

is likely the only service they are aware of. By providing a better product we can hope to lure

away and retain many of Pandora’s customers. Additionally, as Internet phone capabilities

and those with access to them continue to grow, our potential customer base will continue to

grow as well.

6

Goals

First, we looked at how Grooveshark makes money. Through ad sales, band campaigns,

and VIP memberships, ad sales bring in the most revenue. After comparing band campaigns

versus VIP memberships, we decided that we did not want to limit ourselves, or our target

audience, as we would in attempt to sell band campaigns. As a result, we decided to create a

campaign advertising Grooveshark’s VIP memberships.

Despite Grooveshark’s lack of advertising, the company traffics 22 million users per

month worldwide. After speaking with one of Grooveshark’s Business Developers, Ben Kilmer,

we have learned that Grooveshark grows organically at 20% per month worldwide. Therefore,

an awareness campaign would not be necessary. We will still be able to increase awareness

through our campaign, but it would be more beneficial for the company to focus on filling the

gaps.

Out of the 22 million that traffic Grooveshark within a month worldwide, 8 million

are registered users, simply meaning they have created a free account on the site. Our target

market includes these preexisting users, ranging in a broad spectrum of age. We believe that by

targeting music enthusiasts, between the ages of 18 to 26, we have a greater chance of making

an effective impression through the promotion of the VIP’s membership benefits.

After completing our environmental scan, we found that people go to different music

sites for different reasons. People use Pandora for the radio, Myspace for social networking,

and Rhapsody for its transportability. Through Grooveshark’s VIP membership, all three of

these components are offered without advertisements. Here was our hook. Our goal is to get

people to buy into the company through the belief that Grooveshark is the best online music

service for all their needs.

7

Objectives

Comprehension: To establish comprehension of Grooveshark’s services among 60% of our

target audience within 6 months of our campaign’s debut.

Desire: To have 60% of the comprehending publics express a desire to buy into our VIP ser-

vice within 10 months of the campaign’s debut.

Action: To increase VIP membership by our constituent group of 18-26 year olds by 45%

within the first year of the campaign’s debut.

8

Markets/ Segments/ Publics

This campaign hopes to target males and females between the ages of 18 to 26. These

people are a part of generation Y and are very familiar with different media and technology.

Because Grooveshark is primarily located in the United States, the campaign will focus on just

Americans. This age range includes people in college and young professionals just starting out

in their career. They can be considered early majority but some can be considered early adap-

tors. They are already extremely familiar with the web and the Internet. People in our target

listen to a variety of music genres. Many can be considered to be a “music junkie.”

9

Creative Brief

Young adults between ages 18 to 26 who are beginning college, in college, leaving col-

lege, and beginning their first real jobs. These individuals come from a variety of backgrounds

and vary among their interests. These individuals heavily rely upon the Internet for everything

from the news to basic social interactions. They are typically among early adopters when new

technology comes out. Almost all of them own some sort of mp3 player and half of them own

smart phones. They read a variety of magazines including Rolling Stone, People, and Sports

Illustrated. Past times include mostly sports, like skating or surfing and basketball or football.

Their music tastes include mostly alternative rock, pop, or rap, but there are some who enjoy

country as well. Most of this group spends a lot of money going to concerts for their favorite

bands. Most clothes shopping takes place in malls in stores like American Eagle, Hollister, Ab-

ercrombie and Fitch, and Express. They mainly live on or near college campuses, apartments,

or with their parents.

Then, there is a smaller segment of our target audience that is more heavily into music

and consider themselves enthusiasts. They mainly include people who work in the industry or

are learning about the industry in school. This group usually focuses on music and bands on

independent labels, or “indies.” They spend more money on music and concerts. They shop in

more alternative stores such as PacSun, H&M, Urban Outfitters, and even thrift stores. They

read more information about music such as in additional music magazines like Alternative

Press and Revolver and participate more in music blogs online. More of them also own Apple

Macbooks over a Windows variety of computer.

10

Strategies

After determining our goals and objectives for the campaign, we had to think creatively

as to how we would get our users to make the transition to our VIP subscription. The size of

our user base is intimidating, and mostly, challenging to cater to, therefore we attempted to

narrow our audience down further. After much consideration, we understood that Groove-

shark’s services are used by a variety of people, none of which we can rank as most important.

It was in Grooveshark’s best interest that we capitalize on the diverse consumer base of music

enthusiasts by reaching out to the niche markets within the greater mass market.

When creating our strategy, we kept in mind the company goals of Grooveshark: to

improve the connection between people and music, to change the music industry in ways them

seem so unwilling to consider, and to have fun. It was also very important to breakdown their

motto: “Happiness, Discovery, Freedom.” By aligning the company’s goals with the cam-

paign’s objectives, we were able to generate our concept by taking advantage of our niche

markets.

We wanted to target 18-26 year olds because these people are either entering college,

in college, leaving college, or starting their first jobs. The common denominator is the desire

for freedom. With our campaign, we are looking to tap into these desires of our constituents.

With our motto, “freedom to groove,” and by introducing our users of various personalities

in our ads, we are able to relate our ideas to anyone who craves freedom. By introducing our

various users in these ads, we are able to create a correlation between the freedom he or she is

experiencing (in the ad) to the perks offered in our VIP service. Our ads are realistic, comedic,

and true to the benefits of Grooveshark’s VIP subscription.

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Media Tactics

Print Advertising

We will purchase advertising space in People Magazine, Sports Illustrated Magazine,

and Rolling Stone Magazine. These three magazines were chosen because they offer a variety

of readers. People Magazine readers are primarily females (88% as of 2010), while Sports

Illustrated readership are primarily males (77% in 2010). Rolling Stone was chosen because

their demographics are split between males and females (2010 statistics state 56% readers

are males and 44% are females). Advertisements in each magazine will be different but will

have the same overall theme. People, Sports Illustrated and Rolling Stone will run 6 adver-

tisements during the campaign. Magazines were selected because they allow advertisements

to be printed in high quality that will effectively showcase our company and service in a full

color, glossy format. Magazines are also very effective because they have a long shelf life.

They often sit around in doctors’ offices and business waiting rooms. Another benefit of maga-

zines is that the demographics are clearly defined each year.

This campaign will also include posters to put around college campuses. These post-

ers will be approximately 24 inches tall and 16 inches wide. We will distribute them to the top

fifty party schools in the United States. Illegal downloading and music sharing is much higher

on college campuses than outside of college. We wish to advertise that parties can still be fun

without playing illegal music. We plan on advertising our VIP service where people can have

a larger song library in an organized way for only a small fee each month. Each year Princ-

eton Review has their top party schools and we plan to use those lists to find the best schools

to advertise too. Some of the schools listed in 2010 are Penn State University, University of

Florida, University of Mississippi, University of Georgia, Ohio University, West Virginia Univer-

sity, University of Texas, University of Wisconsin, Florida State University, and University of

California – Santa Barbara.

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Internet Advertising

Banner advertisements will be placed on our own web site to further advertise the VIP

service to the already registered listeners. They will be simple and have the Grooveshark VIP

logo. This is a low cost way to advertise on the Internet. One of our goals is to gain subscrip-

tions of the VIP service from our already regular registered listeners and this can help do it.

We also plan to place banner advertisements on Ticketmaster.com and Ticketfly.com. Ticket-

master.com and Ticketfly.com are sites were both males and females of any age will visit to

find good deals on concert tickets. This site appeals to music junkies trying to find tickets to

their favorite concert of any genre. This site will also reach male and female viewers. Another

web site we will be advertising on is facebook.com. This site will be beneficial in our advertis-

ing campaign because it has a very wide variety of users.

Radio Advertising

This campaign will include advertisements on the radio. Our advertisements will run

during Kiss FM Radio’s show and America’s Top 40 with Ryan Seacrest. This show is an inter-

nationally syndicated program. It appeals to both males and females. America’s Top 40 plays

the most popular songs in the United States starting at number 40 and ending at number 1.

Kiss FM’s demographics are both males and females ranging from the ages of 13 to 34 - well

within our target market.

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Promotional Music Tour

Along with our traditional advertising, we are going to host a month-long bus tour in

March 2011 that will travel across the state of Florida promoting Grooveshark and increas-

ing VIP subscriptions. Much of our target market, 18-26 year old adults, travel to Florida for

spring break in March and we believe engaging with these people in a fun, interactive, real-

world environment will significantly help accomplish our objectives.

The Freedom To Groove Tour will stop at prime spring break destinations in Florida

where a DJ will host each event, playing a variety of music and taking song requests. At each

event, the DJ will host prize giveaways and music trivia that contestants can enter to try and

win free Grooveshark T-shirts, sunglasses, and VIP subscriptions. An enthusiastic and char-

ismatic DJ will be the face of the tour and he will encourage conversation with the target

market by utilizing Twitter and YouTube to keep spring breakers up to date and engaged. Our

YouTube channel will ask people to send in videos throughout the tour to show footage of our

events or how they used Grooveshark to have fun on their spring break.

The bus crew will consist of about 10 people including the DJ, equipment technicians, a

tour manager, and promoters. The tour will begin near Grooveshark headquarters at the Uni-

versity of Florida in Gainesville where we will hold an event on campus. From there the crew

will travel to Tampa, Miami, and Ft. Lauderdale. In Miami, Ft. Lauderdale, Daytona Beach,

and Panama City, the crew will promote on the beach in a large tent by day and then move to

a club or bar at night.

This tour is constructed to consistently reflect Grooveshark’s company goals of improv-

ing the connection between people and music; changing the music industry in ways they seem

so unwilling to consider, and to have fun. The Freedom To Groove Tour is a pilot program and

depending on its success, we may plan a nationwide tour.

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Budget

Because Grooveshark is only a few years old, it has yet to have an advertising cam-

paign. Therefore, for its first one, we felt it was not necessary to create a large national cam-

paign. This is why our plans include trial programs and small-scale tactics as a part of a pilot

program. If successful, we fully expect to expand our reach to a broader spectrum of the

nation. Our campaign plans on utilizing $10 million dollars out of which we have broken down

into four segments: Print, Radio, and Internet Advertising followed by our new Freedom to

Groove Tour. Here is how we have segmented our resources:

Print Advertising

Magazines: 40%

· Development

· Placement in People Magazine, Sports

Illustrated, and Rolling Stone

Posters: 5%

· Development

· Labor

· Postage

Internet Advertising

Banners: 5%

· Development

· Placement

Radio Advertising: 15%

· Development

· Actor/Voice

· Placement

Promotional Music Tour: 30%

· Bus Rental

· Gas

· Night Club Association

· Salary for people on bus

· Food

· Grooveshark Gear (sunglasses, T-shirts)

· VIP Service Giveaways

· Equipment

15

Evaluation

Since this is the first time Grooveshark has launched an advertising campaign, it is

critical that we measure the success of the campaign through an evaluation. To do this, we

must return to our objectives.

1. To establish comprehension of Grooveshark’s services among 60% of our target audi-

ence within 6 months of our campaign’s debut.

In order to measure comprehension of Grooveshark and its VIP service, we plan to

track the number of clicks our online ads receive as well as the amount of traffic our site, blog,

and social media accounts receive. We plan to add a new question to the registration process

asking, “How did you hear about us?” We will gather this information and determine which

medium was most effective. During this six month trial, we will record the amount of followers

we gain on Twitter and the amount of subscribers on YouTube. We also monitor conversations

and engage in them as well.

2. To have 60% of the comprehending publics express a desire to buy into our VIP ser-

vice within 10 months of the campaign’s debut.

We plan to measure the growth of desire simply by the amount of requests we receive

via the Internet, phone, mail, in person and e-mail. After implementing our promotional Free-

dom to Groove tour, we hope to expand further up the east coast with hopes of one day reach-

ing the west coast. In our tour, we will make it a priority to inform college students that we

CAN host a party at their school. By planting this idea in the minds of college students, we

plan to receive invitations and requests to do it again.

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3. To increase VIP membership by our constituent group of 18-26 year olds by 45%

within the first year of the campaign’s debut.

Just as Grooveshark has tracked the amount of registered users the site gains in a

month, we will track the amount of VIP users they gain in a year. If we are able to meet the

predicted percentage or even exceed it, we will plan to expand and implement the campaign

another year. We will send more posters to more colleges, buy more space in magazines and

online, release radio ads on more stations, extend the length and distance of our promotional

tour and we will even introduce a series of TV commercials.

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Summary/ Recap

If everything goes according to plan, we believe this ad campaign will give Grooveshark

dominance over the online music service industry. Grooveshark is a platform and this valuable

attribute gives the company flexibility to adapt to market changes and evolve into a superior

service. Since this could be the first ad campaign ever launched by Grooveshark, the level of

success will be critical in determining Grooveshark’s next step. We firmly believe that the stra-

tegic alignment between this ad campaign and the company’s objectives will create a bright

future for Grooveshark.

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Appendix AMagazine Advertisement

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Appendix BMagazine Advertisement

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Appendix CPoster (Original Size: 16 x 24)

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Appendix DInternet Banners

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Appendix ERadio Advertising Transcript

It’s always frustrating when advertisements get in the way of your music, or you can’t find

something you like. With Grooveshark VIP we give you the freedom to choose you’re own mu-

sic and based on what you like, we offer suggestions and cater to your personal music tastes.

You can also connect with you’re friends and favorite artists to see what music is playing in

their lives. Catch your groove at grooveshark.com

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Appendix FPromotional Music Tour Map

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