Gene Carr's Patron Technology Blog

Why 2009 Will Be Good for the Arts, Despite the Economy

As 2008 draws to a close, I want to take the opportunity to reflect on some important trends in our field, as concerns technology and e-marketing for the arts. My theme this year is naturally colored by the extremely challenging economic climate that is facing all of us, and most especially non-profit organizations.

Ultimately, my message is a positive one. What is certain is that no matter how our economy stumbles, new technology coming to the market in the next few years will continue to transform old business models and create entirely new ways of operating. And as this happens, the way you manage and market the arts will continue to change. New technology will be a huge positive for our field because the Web has become a platform for highly sophisticated tools at fees that non-profits can handle easily.

It seems to me the best way to keep your organization stable in this environment is to either raise more money or to be more efficient with the money that you have. We touched on the former in our Patron Technology newsletter E-marketing E-ssentials earlier this month; now it’s the second part of this equation that I am urging you to pay attention to. New technology can be central to this efficiency.

Big Software Changes: Better and Cheaper

First, let's talk about what’s ahead for software. Actually, I should step back and start by first explaining that it’s likely that soon there will be no such thing as “software,” as in software that is installed on your desktop computer or a server in the basement of your organization. More and more, technology is moving into a “hosted” environment where programs are available online, provided to you by a company that has embraced a SaaS ("software as a service") model.

Here at Patron Technology we’ve been in that business for over seven years with our PatronMail system. What we are seeing every day now is that many of the software powerhouses of the past (particularly Microsoft) are slowly becoming irrelevant, as Google and others not only replicate their products and deliver them on a SaaS basis, but do so at amazingly low prices or for free. This trend will impact the non-profit world in a very positive way. In the last two decades, for most non-profits, acquiring new software has most often meant signing long-term contracts for relatively expensive ticketing systems or fundraising software that ran on a server. But once software is delivered online, vendors can offer much more sophisticated systems at much lower prices.

What this means for you is that not only will functionality be dramatically improved, prices for this technology will plummet relative to what you are used to. If you’re thinking about buying new systems for your organization, focus on the type of system that you are being sold. If it's a traditional "client/server" system, you'll be asked to pay a hefty one-time license fee, a set-up fee, and an ongoing "support and upgrade" fee each year. If you're talking with a SaaS company, typically there won't be a balloon payment up front, but rather a flat fee per year, with options for support levels and additional modules. From a pricing perspective, the latter should be vastly less costly.

Replace Newspaper Arts Coverage with Your Own Message

Second, I see the landscape of marketing changing, potentially dramatically, because of the demise of the traditional newspaper. We all know that newspapers are facing a huge challenges. Their business models are being turned upside down by the Web and their very existence is in question. In the last month we've seen some ominous signs: The Tribune Company has filed for bankruptcy, and The New York Times has borrowed against the value of its own building to counter a recession-driven dip in advertising revenues. Just this past week, a Detroit paper announced that it would cut back on delivering the physical paper to those who have subscribed to it. And last week The New York Times carried a lead story on how few newspapers have Washington, D.C. bureaus anymore.

If papers are cutting their Washington operations, you know that the arts are next. I see the very real possibility that in the next several years, there may not be a local arts section at all, as print newspapers that survive will be only a shadow of their former selves. We have already witnessed the near-complete gutting of the arts-reviewing staff at the Times; that kind of thing is happening all over the country.

In a world in which there is less arts coverage, cultural organizations will face a vastly different marketing landscape. Of course there will be bloggers and online newspapers that will reach some portion of the arts audience, but not in the same way as before. And when this marketing channel dissipates, cultural organizations are going to be faced with a very new challenge in terms of reaching their audiences.

I've been saying for years that the solution to this dilemma is not to replace newspapers with another newspaper, or to double up on posters on the street. Rather, the right approach is to focus like crazy on developing a direct relationship with your audience members so that you are no longer relying on a third party to promote what you are doing. You’ll still do direct marketing. But you’ll do it in a smarter way, with more effective list segmentation powered by new technology. And you’ll want to share research and statistical data with other organizations, because sharing will mean better targeting and more effective marketing results.

So I urge you to build that relationship with your audience by continuing to develop your e-mail list so you won’t need that third party to get the word out. We witnessed a perfect example of this recently, as Barack Obama’s campaign developed a multi-million-name opt-in e-mail list. The campaign managers knew very well that their e-mail list would be as powerful a marketing weapon as any newspaper or TV ad. While I don’t think that 2009 will be the year that newspapers go away, the story is not getting any better for print journalism for the arts, and that has big implications for what you do in the coming year. I urge you to continue to cement your online relationship with your patrons before the “lifeline” of old media goes away.

The Arts Will Go Live Online

Finally, 2009 will be the year that live online arts broadcasting gets real. If you want to get a glimpse of this future, check out what the Berlin Philharmonic is doing. You can buy tickets to watch a live concert from Berlin. They’ve taken the concept of “Live from Lincoln Center” and cut out the middleman. It’s direct marketing in an entirely new way. This past week the 92nd Street Y did a live webcast of a lecture, and yesterday I watched a live concert from the Cite de la Musique in Paris. The era of live arts and culture, direct from the organization to your computer, is about to unfold. PBS won’t go away, but if you’re following the logic above, I’m sure you’ll realize that many organizations will soon become their own broadcasters. When your patrons have technology that connects the television on their wall seamlessly to the Internet at high-quality speeds and with hi-fidelity sound, a new marketing channel will have emerged.

We’re in a moment of revolutionary change in so many ways, and 2009 promises to bring more and more fundamental changes to the way you communicate with your audiences and run your organizations. So as you consider your ever-tightening budgets for this next year, improving your technology to run your organization more efficiently, developing deeper digital relationships with your patrons, and engaging a new audience online all seem to be good recipes for our challenging times.

...And Apparently for College Kids Too

As a follow-up to Monday's post, I thought this bit of research would be of interest as well.

I wish I had a dollar for every person that said to me "e-mail might be important today, but it won't be long before it dies. After all, college students don't use e-mail, they only send text messages."

Wrong.

.

In an August 2008 study conducted by Harris Interactive for Alloy Media + Marketing, we find that not only does e-mail beat out text messaging by 2 to 1, it also beats Facebook and other social networks college students visit. 

E-mail Is Still King for Boomers

One of the things that attracted me seven years ago to building a business based around e-mail marketing was my belief that as technology developed, e-mail would shed its then bad image as spam, and would take its rightful place as the most valuable and effective marketing tool for non-profits.

Over the years, the market has validated this and today nearly everyone understands that e-mail is an important component of your marketing strategy.

What often irks me is the propensity for "flavor of the month" thinking. A few years ago, people were telling me that RSS would kill off e-mail: once people adopted RSS, they would stop wanting opt-in e-mail. When that didn't happen, next it was text messaging: "Nobody wants e-mail! The cell phone is the device of the future!" was the cry. But neither of these technologies have killed off e-mail and I doubt that they ever will.  

That said, what's important to me is to highlight the relative interest in these technologies by the vast majority of arts patrons -- those between 35 and 65 years old.

Check out these numbers below -- these are from a recent study that asked people HOW they want to receive communications. The numbers tell the story even better than I can.

A Taste of Arts Marketing In Spain

I've been away from this blog for a while as last week I was in Europe speaking at a conference sponsored by the Sociedad General De Autors y Editors (SGAE), an organization that focuses on publishing books on arts management. The conference was on marketing the arts online, and took place in Valencia, Spain.

This photo shows the massive and impressive Valencia Opera house designed by Santiago Calitrava. It's a actually a cultural complex consisting of four separate theater spaces, which I was grateful to have been able to visit. This kind of massive funding for the arts truly boggles the mind. I was with the noted British arts marketing consultant Roger Tomlinson and we were both amazed at the sheer size and extravagance of the structure.

This kind of building stands in contrast, however, to what I learned about how the arts are marketed in Valencia. I learned a lot about how the arts are managed in Spain — more than I did about how the arts are marketed online. I got the feeling that online arts marketing is not as fully developed as it is here. But I also came away feeling that the concepts we pay attention to here, such as opt-in e-mail, list segmentation, and relevant content are universal. There's a lot of interest in Spain about social networking, too, not only on Facebook but also on a similar Spanish site called Tuenti.

But what surprised the most was how difficult audience development is in Spain, compared to the U.S. I realized how fortunate we are here to have direct access to our patrons, even though some organizations don't mine this data as well as they should. You see, in Spain, the government has organized the arts in such a way that the banks pretty much control all ticket purchases. So if you are a concert producer, you can drive traffic to your Web site, but ultimately tickets for most cultural events are purchased through the bank. Indeed, in many cities in Spain there are small concert halls within the bank itself.

The problem is that the banks control all the patron data and they don't share it with the producers. So it is nearly impossible for a producer to analyze marketing efforts and track back either online or offline promotions to ticket sales. There's no such thing as a ticket-buyer database. I heard over and over how frustrating it is for arts organizations to build audiences in conditions such as these, and how desperate they are to forge better relationships with the banks for their mutual benefit.

Of course this makes the notion of direct communications through e-mail that much more important. If you can't know who your ticket buyers are, you can at least know who your e-mail subscribers are, and that list is probably a  pretty good proxy for ticket buyers.

Finally, the other distinction in Spain is the degree to which a large number of concerts are marketed at what we would consider the last minute. An announcement is made in the paper or with posters, and the event happens a few days later. The audience has been trained to respond immediately, as opposed to our American procedure of long ticket-selling timelines. I pointed out at the conference how effective e-mail is to getting the word out for last minute ticket-buying.

I came away from the conference impressed at the professionalism of the arts marketing community, and its desire to adopt to new media and take advantage of all that it offers.