This document provides a strategic advertising plan for Grooveshark's VIP subscription service. It includes an executive summary, situational analysis, goals, objectives, target markets, creative brief, strategies, media tactics, budget, and evaluation plan. The plan aims to increase VIP subscriptions among 18-26 year olds through print, radio, internet and event-based advertising campaigns.
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Executive Summary
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.
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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.
6. Problems and Opportunities
6
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.
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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.
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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.
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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.”
10. Creative Brief 10
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.
11. Strategies 11
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.
12. Media Tactics 12
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.
13. 13
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.
15. Budget 15
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 Radio Advertising: 15%
Magazines: 40% · Development
· Development · Actor/Voice
· Placement in People Magazine, Sports · Placement
Illustrated, and Rolling Stone
Posters: 5% Promotional Music Tour: 30%
· Development · Bus Rental
· Labor · Gas
· Postage · Night Club Association
· Salary for people on bus
Internet Advertising · Food
Banners: 5% · Grooveshark Gear (sunglasses, T-shirts)
· Development · VIP Service Giveaways
· Placement · Equipment
16. Evaluation 16
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.
18. Summary/ Recap 18
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.
23. Appendix E 23
Radio 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
