The question that every concert promoter or festival organisation wishes to answer, is the following: can you ensure that digital fans really purchase a ticket for a festival or concert for a particular artist, such as Armin van Buuren?
Predictive digital fans
This answer is not only a resounding yes, but I would suggest taking things a step further: you can calculate what the turnout will be at an event based on the number of digital fans from the internal and external databases of an artist.
As long as you are certain that the digital fans are not bots or fake accounts, you can predict how many digital fans (followers) are required to sell out an event. It is equally as important that the artiest mobilises their fan base to visit the event. The model that describes this effect is called: the AARRR model.
The AARRR model
The AARRR model allows you to convert the followers of an artist or festival into physical visitors. Using Dave McClure’s AARRR model, you gain control over your digital ecosystem. The five layers of metrics are accrued from the various data sources of the various channels.
These metrics provide an answer to the questions below:
- Acquisition — How do fans find the digital channels of an artist or festival?
- Activation — Have fans had a positive first experience and are they willing to do something for the artist or the festival?
- Retention — Do fans return to the digital channels or to a revenue model?
- Revenue — Which part of the fan journey generates revenue?
- Referral — Do fans refer other fans within the channels?
Using advanced data analyses makes managing your organisation on the basis of the model possible. We combined more than 100 different metrics and ensures that an organisation gains control over its digital ecosystem.
The fan relationship is the most important factor for company valuations. The model allows you to predict future revenue and can be applied to all industries; not only to start-ups or festivals. Because we now find ourselves in a relationship economy, new generation technologies ensure that DJs and festival organisers can make even better contact with their fans. However, in order to manage we will still need additional models.
The model is a part of the method. With the AARRR model, an organisation actually starts to become mature digitally. The model manages the organisation, the framework and ensures guaranteeing the digital assets of companies or festivals.
To make the AARRR model more specific, I would like to refer you to the world´s four-time number 1 DJ, Armin van Buuren, who sold out the Amsterdam ArenA twice by, among other things, mobilising his digital fan base first. The digital and marketing team behind the producer of the event carried out a thorough analysis, collaborated internally and externally with the communication and PR departments and got the model working. In other words: by using his owned and earned channels in a smart way, he was able to achieve almost 75,000 visitors.
Retention (ensured that fans who previously visited shows returned) was deployed first, to subsequently activate fans who had never visited a show previously via acquisition. The model works to your advantage, if you know how to use it effectively — and can persuade the organisation to first mobilise the fan base.
This had the following result. The number of tickets sold increased by 183 percent. Which makes sense: after all, the venue could accommodate three times as many visitors. Revenue increased by 156 percent and the EBIT (the operating income of the event, before interest and taxes) increased by 189 percent. Compared to a previous show in the Ziggo Dome a 40 percent saving was achieved in terms of marketing budget. The brand value objective increased by 230 percent and the potential brand value even by 270 percent. The result of Armin van Buuren’s Armin Only show was not only additional revenue, but also increased margin due to a decrease in traditional marketing expenses. The potential brand value nearly tripled!
With the Armin van Buuren case, the team used a number of metrics:
- How many tickets were sold in 2016?
- What was the marketing budget at the time?
- What was the brand value (based on the profile value) in 2016?
- What was the potential brand value in 2016?
- What was the location and what was its maximum capacity?
- What was the ARPU (Average Revenue Per User) at the time?
- What were the revenue and profit (EBIT) in 2016?
Based on these figures, the result of the event became measurable — and with it the efforts of the organisation.
The AARRR model also has — if filled with the correct followers — a predictive value. Allowing you, as an organiser or booker, to calculate what the impact of booking a certain artist for your festival or event will be. If you have insight into the figures and the quality of the followers of an artist, you know exactly what the revenue of a concert or festival will be and you will know how many tickets an artist will sell.
In other words: it is finally becoming transparent what an artist can signify for ticket sales — and what his or her value must be. Because the festival market is currently saturated, it is time to approach artists in a rational (and figure-based) way. Be warned… This method only works with real followers, not with bots or spam accounts. The output depends, as is the case for much of life, on the input.
- This post is a pre-read of Part 3 — Chapter 3 of my new book ‘Digital Assets’ the translation of the Dutch publication ‘Digitaal Vermogen’.
- Also read the publication ‘EDM and the Digital Domain’