sábado, 28 de septiembre de 2019

Meet the makers of modular

When Dieter Döpfer, the founder of music instrument manufacturer Doepfer, decided to launch a brand new modular synthesiser system in 1995, no one could have predicted what would follow. Today, his “Eurorack” format supports an ecosystem of hundreds of manufacturers that have collectively produced thousands of compatible modules used by famous musicians, such as Radiohead, Chemical Brothers and Aphex Twin, and hobbyists alike.

Fuelled by passion not venture capital, most companies in the Eurorack space are neither startups nor established OEMs. Instead – and quite remarkably – the industry remains a long tail of boutique manufacturers, with some of the best-sellers still operating as one-person shops. Inspired by technology that is almost half a century old, and intentionally designed not to scale, these businesses might well be considered the anti-Crunch.

“My happiness is based on developing, not on the amount of sales,” one Eurorack maker told me, after I promised not to name his company for fear of generating too many new orders. “Of course I really appreciate if someone decides to purchase some modules, then I know my work makes sense, but the current sales amount ensures I have enough time for developing”.

He said that increased sales would lead to less time spent working on new designs and more time assembling modules and answering emails explaining why a particular item is currently out of stock. One solution would be to take on an employee or two but the associated bureaucracy would also be an unwelcome distraction.

“That’s not what I like [doing],” he said, comparing it to a friend who owned a single coffee shop and was happy making great coffee and fine desserts, but had subsequently expanded to three coffee shops and is now unhappy. “He’s thinking about selling two of his coffee shops to get his happiness back. More money does not ensure more happiness,” said the Eurorack maker.

It’s the kind of an existential crisis many founders find themselves facing after a company grows to a certain size, but for the makers of modular the reason for existing is often clear from the start. This is certainly true of Döpfer’s own story.

In contrast to the preceding two decades, the mid-80s ushered in the era of digital synthesisers, popularised by Yamaha’s DX7, meaning that instruments based on analog electronics – let alone a modular synthesiser system that had to be patched manually before it would produce any sound – were no longer in vogue. Modular systems from the 60s and 70s, such as those produced by Moog, Buchla, Arp and Roland, had mainly become the domain of vintage instrument collectors, while the modular synthesisers that remained in production were seen as arcane high end products priced well beyond the reach of most musicians.

In those intertwining years, Döpfer had pivoted his company away from analog electronics to produce one of the first digital sampler cards, followed by a more successful line of MIDI keyboards and controllers. However, by 1994 the designer was left feeling unchallenged, and perhaps noticing that second hand prices for Roland’s TB-303 and other discontinued analog synthesisers had begun creeping upwards, Doepfer introduced its first new analog synth in ten years. Called the MS-404, it was mainly designed for Döpfer’s “own enjoyment,” but sold better than expected, creating an even bigger itch in need of scratching.

Dieter Döpfer

Dieter Döpfer (Photo credit: Theo Bloderer)

By the following year Döpfer had developed an entire modular synthesiser system he called the A-100. Using repurposed circuits from the MS-404, the system consisted of ten individual Doepfer modules, each fulfilling a specific function, such as an oscillator, envelope or voltage-controlled filter. Just like the modular synthesisers of the past, the A-100 would require the user to create their own instrument by “patching” the modules together. Using cables with a 3.5mm jack on each end that are capable of carrying audio signals and control voltages, the synthesiser’s sound could be shaped or modulated in a vast number of ways and configurations, limited only by the user’s creativity and knowledge of synthesis techniques (or their appetite for experimentation), together with the number of different modules in their system and size of their bank balance.

“The idea was to make it affordable,” Döpfer told me during a call from the company’s office in Munich, Germany. “All modular systems that were available in the past were far too expensive for normal people from my point of view. And so I said, ‘there should be a modular synthesiser available, which is affordable also for normal people, not only for rich ones’. This was the idea behind the A-100”.

A100 suitcase

Doepfer’s A-100 suitcase

Despite its relatively low cost, Döpfer says the new synthesiser was initially met with bemusement by dealers. He was repeatedly told that nobody was interested in a modular system and that he should spend his time designing something different. “I said, no, I think it’s a good idea, I’d like to have something like that, and that’s why I continued it,” he recalls.

Once again, Döpfer’s instincts were good. When the A-100 made its first public appearance at an industry expo the following year, it was the company’s new modular synthesiser at the back of the Doepfer stand that grabbed most of the attention, relegating its bread and butter MIDI keyboard and controllers to a rather lonely looking affair.

Meanwhile, Doepfer wasn’t the only company developing a new low cost system in a bid to re-introduce modular synthesisers to today’s musicians. Unknown to Döpfer, the British company Analogue Systems had been working on a similar idea.

Purely by chance the A-100 and Analogue Systems’ RS Integrator System 1 were both “3U” in height (based on the 19″ rack standard), shunning the larger and more expensive “5U” design of most existing modular systems. The two systems also took inspiration from the Eurocard standard for printed circuit boards (PCBs) and faceplate dimensions, where width is measured in a unit referred to as horizontal pitch or “HP” for short.

Unfortunately, the exact position of the mounting holes on the modules’ front panels differed between systems, leading to gaps if the two brands were placed adjacent to one another. The power cable configuration was also different, although that was later solved when Analogue Systems redesigned its power supplies to provide Doepfer-style outputs so that systems could be mixed.

Quite brilliantly, however, Döpfer decided early on to publish the specifications of the A-100 module format on the Doepfer website, and in doing so had laid the groundwork for a Eurorack modular synth standard to emerge.

“I thought if the people and the musicians are interested in a modular system, it should be an open system because it was clear to me that we were not able to offer all the kinds of modules the people want to have,” Döpfer told me.

“And so I said I’ll publish everything like the mechanical dimensions and electrical specifications and so on and after, I don’t know, two or three years, the first other guys asked me if it would be okay to offer modules in the same format and with the same design.

“I said, okay, it would be best if more modules are available from other companies, because then the people are more confident in the system, compared to a situation where we would be the only supplier of such modules”.

As modules from third-party makers started to emerge, Döpfer admits he was initially concerned about the effect competition could have on his company. However, as more companies entered the market, Doepfer sales went up, especially since the first generation of Eurorack companies focused on more specialist modules or plugging gaps in the now expanding Doepfer system. “That was really surprising for me,” he says.

“The one thing that Döpfer has done is he’s created an industry out of Eurorack,” says Allan “J” Hall, the founder and designer at British Eurorack maker AJH Synth. “If it wasn’t for Döpfer, there wouldn’t be any Eurorack. And he’s very generous in his approach to it as well. He doesn’t go around saying, ‘well, you know, it was me that started this, I should have all the glory’. There isn’t any of that at all”.

“I was hoping that we could sell the system, I don’t know, maybe for 5 or 10 years or something like that, but now we are close to 25 years,” reflects Döpfer. “And I never thought that it would last for such a long time, and that so many companies and so many modules will be available”.

***

My own journey into Eurorack is less than 12 months old, even though I’ve always loved the sound of analog synthesisers, particularly those used by funk and rock musicians from the 70s. Until recently, the only hardware synth I owned was a relatively basic single voice synth that has remained slightly underused in my home studio. Being “semi-modular” in its design, however, what it did offer was a number of patch points, either for internal pathing or – you guessed it – to external synth modules. One day late last year I decided to build a tiny Eurorack modular case to expand the sound possibilities of the synth.

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My tiny 32HP Eurorack case

After purchasing a few modules, mostly second hand via a vibrant used market, it wasn’t long before I’d outgrown my humble 32HP case and a pattern developed familiar to anyone who has caught the Eurorack bug. I upgraded to a bigger case and obsessed over what modules I should buy and sell in pursuit of my perfect system (financial and space constraints permitting). Putting together a modular synth is the epitome of personalisation as no system is likely to be exactly the same. It’s a constant journey of discovery, too, spurred on by the wonderful “what if?” moments that often occur during patching.

It is also a journey that you don’t have to go on alone. The Eurorack ecosystem is well-established. Along with the makers themselves, there are online forums, such as the trailblazing (and oddly titled) “Muffwiggler,” various Facebook groups, Subreddits, YouTube channels, independent stores, and marketplaces like eBay, Reverb and Etsy. The community is generally welcoming to beginners and more experienced users alike, and people who inhabit the scene are often willing to share their experience.

As I immersed myself in Eurorack, I was also surprised to learn how small most Eurorack companies are: from one-person shops to boutique manufacturers of no more than a dozen people. Sure, some makers outsource manufacture and assembly, but it is common for a lot of the work to be done in-house, bar printing circuit boards and milling faceplates. In some ways it is a throw-back to how many hardware industries got started and is a little reminiscent of the very earliest days of the personal computer and the Homebrew Computer Club, except Eurorack is approaching a quarter of a century old.

Despite outward appearances, Döpfer itself only employs four staff (when I emailed the company for customer support, it was Mr Döpfer who replied!). Other examples include the U.K.’s AJH Synth, which has three full time and one part time member of staff, or XAOC Devices in Poland, which employs eight people. Meanwhile, Mutable Instruments, probably the most notorious company in Eurorack after Döpfer, is just founder Émilie Gillet.

“It is very much [a] cottage industry, and I think, purposefully so,” says Ben “DivKid” Wilson, who produces the popular Eurorack YouTube channel DivKid. “I don’t encounter many people that are so driven they want to run it like a corporation, or they want lots of staff. It’s that thing of, you know, if you’re an engineer for a car company, and you climb up the ladder, you’re probably going to end up doing less engineering, and more management. I don’t think anyone wants to let that go. They want to hold on to that reason that they got into this”.

Jason Brunton, who runs Signal Sounds, a Eurorack retailer based in Glasgow, Scotland, likens the makers of modular to the independent record labels he used to work with in a previous job. “The people that run modular companies have a very similar attitude,” he says. “A lot of the companies, it’s just one person’s vision… you can generally speak to the person that made the design, that manufactured it, designed the logo, you know, in some cases, it’s all the same person”.

This is very different to giant music manufacturers like Roland, Korg or Yamaha, says Brunton, where you never have a chance to find out what’s “going on in the heads of the people that make the gear” and only ever hear from sales reps. “You don’t get any insight into why the designers came up with particular ideas”.

***

You don’t have to look very hard to get into the head of Allan “J” Hall, the founder and designer at AJH Synth. Hall has been involved with synths, electronics and music for “more years than he cares to remember,” according to the company’s website, and like many Eurorack makers his entrance into electronics started with building guitar pedals. An interest in synthesisers and electronic music soon followed and for the last 20 years, Hall has been part of the DIY synth scene, including building and modding synth systems both for himself and other electronic musicians. He also spent five years as a service technician repairing and modifying Moog, Arp, Korg, Roland and other analogue synthesisers, along with some Pro Audio design work, including two years designing and building “boutique” valve guitar amplifiers.

“The reason that I went into modular was that at the time no one else was trying to make Eurorack modules that sounded and performed like vintage gear,” Hall tells me. “I was looking for the sound without the reliability issues, and the open architecture of Eurorack allows them to be interconnected in ways that weren’t previously possible”.

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AJH Synth’s Allan Hall holding an extended Minimod system

Eighteen months in the making, AJH’s first set of modules was the Minimod released in 2016. The system is a painstaking recreation of Moog’s Minimoog Model D, arguably the most famous synthesiser ever made, and has been used on countless hit records spanning rock, disco, soul, EDM and hip hop.

“The Minimoog Model D… to me was the Stradivarius of mono synths. Then a few people said, ‘will you build me one? will you build me one?’ and I landed up as a Eurorack manufacturer. I wanted this thing to sound as nice as a Minimoog but I didn’t want it to have the limitations that the Minimoog has. If I wanted to try to use it with a SEM filter, I can just patch it in and see what happens. Or if I want to try it with six VCOs, I can patch it in”.

Hall says that designing a module that accurately reproduces the sound and response of vintage circuits that we know and love involves chasing the last few percent. To get to 90 or 95% of the way there is fairly easy and requires taking the schematics from the service manual and replicating it. But it’s the tiny nuances that require real work.

“With designs, it’s not unusual for me still to be working at 1AM,” he says, laughing. “If I’m laying out a complex circuit board then quite often I’ll put in 14-15 hour days. I only stop for meals and to go to the loo and just be full on at it. You find that a lot in electronics, computers and everything else… it’s almost the norm, it’s that human curiosity. The only thing I can’t understand is that some people don’t have it”.

When considering what to design next, Hall says he’s not really “commercially minded” and, as he continues to expand the AJH lineup, he is still building what he considers to be his perfect modular system.

“With something like the ‘Next Phase’, I just thought, ‘I need a phaser’. I don’t really stop and think, ‘is there a market for a phaser?’, I just go ahead and build it anyway… The initial idea really is: there’s something missing in my system, this is what it is, so that’s what I’m gonna do. So it certainly isn’t market-driven”.

To go from design to prototype, Hall says he uses the simulation program LTspice, which models various components so that he can get an idea of how a circuit will perform. He then has a prototype circuit made up and says it typically takes three different prototypes before everything either works as expected or he decides there is a better way of doing it.

Once a module is given the production green light, the front panels are designed, and then manufactured by a company in Germany, with PCB manufacturing outsourced to China. However, all assembly is done by AJH’s small team in the U.K., including SMD soldering and the required calibration of each module.

burning midnight oil on pre production MiniMod modules

Allan Hall in his workshop

“We don’t have anything assembled in China,” Hall says. “That’s something I learned not to do fairly early on. If you’re a large company, and you have control, you have someone out there, then yes, by all means go that route. And Behringer have proved that you can go very big and very cheap by doing that. But for small companies like ourselves, you’re very much at the hands of the assembler and they tend to get quite ‘creative’ with the bill of materials”.

He adds that a small change in a component can seem innocuous to a third-party assembler but is often fundamental to a module’s design and the way it will sound and operate.

Distribution and retail, meanwhile, is something the AJH Synth founder is happy to outsource, and, unlike a lot of boutique makers, the company doesn’t sell direct to consumers. “We try to stick to doing what we’re good at. Packing up modules and taking them to the post office or getting couriers to collect them, we can’t do that as well as Amazon or the big box shifters… We just thought, well, if we can get rid of that, then we can concentrate on what we’re good at, which is designing and manufacturing.”

***

“This wasn’t the product of decision-making, it’s really a ‘one thing led to another’ story,” says Jason Coates, founder and sole proprietor of Manhattan Analog in Kansas, U.S.

In 2008 he was working in graphic design and layout, while building a modest studio on the side, and this led him “down the DIY path” by making a few custom panels for available circuits, just for his own use. After he posted his design to a few forums, he quickly discovered there was a need for panel designers within the Eurorack community.

“I started sharing my designs and taking on custom work,” recalls Coates. “At one point I got a request for a simple three channel mixer in 4HP, so I designed what would become the Mix. After sharing that one I had a slew of requests for more, so I did a run of 10. That sold out in hours, so I took the funds and invested in a run of 100”.

By the end of 2011, he says he was making twice as much at his “hobby” than he was doing layout design. “So I quit my day job to focus on Manhattan Analog full time, and I’m still doing it today”.

For production, Coates says these days he generally does runs of 6-12 for an individual module (and always in multiples of three). He concedes that it would be quicker to manufacture in larger batches, at least up to a point, but says he is limited by physical space in his workshop.

“This all still happens in a spare bedroom that’s also shared with my studio,” he explains. “I have started outsourcing a bit more as the line has grown, but frankly I still enjoy doing the work. I feel like it gives me an advantage regarding build quality and it also allows me to be choosy about certain components that may not be available in the SMT, machine-assembled realm”.

For distribution, Coates was able to partner with a number of retailers very early on, but also sells direct through the company’s website, including offering DIY kits for people that enjoy assembling their own modules.

“From a maker’s standpoint, it’s fun to work in Eurorack because there really is that freedom to do whatever you can imagine,” he says. “You can offer small-run or niche products with very little risk, and there’s not a lot of overhead involved since the ‘bones’ of the systems, such as cases and power supplies, are already widespread in the market”.

In other words, it’s partly the modular aspect of modular that makes Eurorack an industry that attracts long tail businesses. “Even as a student you are able to design one single module,” says Döpfer. “You can design a very limited project as there is already a pool of thousands of modules which can be used in combination with your special module. That’s very different to other markets”.

“The other aspect that makes it fun on the supply side is the tight-knit community that goes along with it,” adds Coates. “That direct connection with the customer base is probably as important to the makers as it is to the musicians”.

***

“Oh, I gotta want it, first and foremost,” says Garren “G-Man” Morse, founder of G-Storm Electro in Oklahoma City, U.S. “There’s something about analog circuits I really go for. And luckily, others have wanted the same things. So that’s all working out nicely”.

A trained engineer and architect, Morse found himself out of work after the financial crisis hit in 2008. While he was looking for a job he studied up on electronics, which began with “circuit-bending” an old Casio keyboard.

“I was buying up used textbooks, Forrest Mims guides from Radio Shack, and studying old synthesiser service manuals and schematics,” he tells me. “I built a few kit things. When I felt confident enough, I got hands-on with synthesiser restoration and flipping synths. And eventually bought a small Eurorack system. Little did I know where it would lead me”.

Modules01

G-Storm Electro’s growing lineup of Eurorack modules

He wouldn’t go on to launch his own Eurorack hardware business until 2017 and in the interim period, amongst other jobs, tried his hand at writing and selling software instrument plugins based on his love of vintage string synthesisers, such as the Roland VP-330 and Logan String Melody. He says he soon realised that “the plugin game is all about how many platforms can you satisfy,” and decided it wasn’t for him. “I just wanted to make these plugins once, not 12 times over”.

“Hardware has a very satisfying, tactile interaction you can’t get with software,” adds Morse. “Hardware has this physical presence that commands your attention and rewards the senses in a very engaging way”.

He concedes, however, that he still spends an estimated 60% of his time at a computer with module design, cost analysis, ordering, social networking, client interaction, and promotion. “But it feels more rewarding to me,” he says.

The soft aspects of running a Eurorack business, including social media promotion, applies to every company, no matter their size. However, for businesses like G-Storm Electro, which don’t have a distributor or retail partnerships, it is even more important. Currently, the only place you can buy G-Storm Electro modules is from the company’s store on Reverb.

“My appreciation for the internet and forums are greatly magnified when I think about musical instrument reps that promoted their product by jetting around the world to various dealers, or the DIY synthesizer instructions that were published in magazines,” says Morse. “The access to products, information, and specialised electronics components were relatively limited compared to now. On a frugal budget I don’t have such luxuries to jet around the world for promotions. So I wing it on social media, YouTube videos, and good old fashioned word of mouth. I love Reverb, their no-nonsense business acumen is so close to mine. Their fees are very fair, and I really do feel I have my own store within a larger store. It’s been indispensable”.

As not every module sells equally, Morse’s strategy over the last six months has been to diversify by launching new modules rather than simply replenishing stock of his previous designs. He’ll typically make batches of about 5 or 10 modules at a time, which he says are hand-crafted in a “work-at-home scenario”. His latest creation is a faithful Eurorack adaptation of the main features of Roland’s revered SH-101 synthesiser. Earlier in the year, Morse also adapted the filter circuit found in the Arp Odyssey Mk1 synth (dubbed “G-Storm Electro 4023,” I purchased number 3 of the first 5 modules produced).

Workspace01

“My operation is small and nimble,” he says. “My space and budget for parts, assembly, and inventory on hand are meagre. So I’m always working within those confinements. I can envision opening shop someday, or possibly selling in stores, when I’m able to move more units. As long as I can keep up with demand, there is no need to outsource as of yet. I’m having fun with it. If it stops being fun, then I’ll be calling for help from someone or move on to the next thing”.

***

“My name is Émilie and I am Mutable Instruments’ product designer, hardware/software engineer, sales person, and customer support representative,” reads the Mutable Instruments website. “Mutable Instruments has, by design, no employees! Just me!”

Another one-person shop, Mutable Instruments punches above its weight like no other Eurorack maker. Over the years, the company has designed a series of innovative and best selling modules, proving that digital has a well-earned place in Eurorack and, as one Reddit user put it, “is just as elegant and organic as analog”.

Based in Paris, founder Émilie Gillet has a background in software engineering, having previously worked for tech companies such as Google, Last.fm and MXP4. She first gained a reputation within the music-making community after developing “obscure” music software including a granular synthesis tool for BeOS, and Bhajis Loops, a Digital Audio Workstation (DAW) for PalmOS. However, the precursor to Eurorack came in the summer of 2009 when Gillet started building and eventually selling DIY kits.

The first of these was the Shruti-1, a hybrid digital/analog desktop synth, which initially sold at a loss before being sold for profit in September 2010. A year later, Mutable Instruments the company was born.

“I quit my main job in February 2012 because the company I was working for was going nowhere, while Mutable Instruments’ first quarter showed that I could live decently off the DIY kits even if we weren’t quite there yet,” Gillet tells me.

The first four Mutable Instruments modules were designed simultaneously, with Braids, a “macro-oscillator” that digitally modelled a vast range of synth voices and timbres, proving to be the most popular.

“I made an informal demo of Braids at a local shop and everybody agreed that it had a lot of potential,” she recalls. “The other modules were considered less original, or seemed to fill smaller niches. But Braids’ appeal seemed to be universal”.

Because of Gillet’s reputation designing DIY kits and music software, unlike other modular companies, Mutable Instruments didn’t have to overcome a “cold start”. This meant that retail partnerships were forged early on and the company only needed to sell direct for a short time. Today Mutable Instruments modules can be found in most independent stores and big box-shifters in the U.S. and Europe.

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A selection of Mutable Instruments’ modules

Gillet typically prototypes new digital modules by writing C++ code and a command-line tool to process or generate audio files, or she’ll write a patch for the visual programming language Pure Data. To get more of a feel for how the software will interact with hardware, she may write an alternative firmware for an existing module so it’s directly testable with CV inputs and physical knobs.

Analog modules are prototyped on a breadboard, sometimes with interconnected through-hole PCBs. “I actually made a very large through-hole PCB for my latest analog design,” Gillet explains. “It’s easier for me to replace components, build little networks of extra diodes, capacitors and resistors in 3D above the board when it’s made of large parts. I maintain in parallel LTSpice simulations and python notebooks with all the calculations for part values, cutoff frequencies, gains, etc”.

Next the schematics are inputted into the PCB design software Eagle and discussions are initiated with UI designer Hannes Pasqualini, with whom Mutable Instruments has a long-standing partnership. “This is a dialog, features may be added or removed to make the panel more symmetric or elegant,” says Gillet.

Finally, the design is sent to a company in Germany that specialises in manufacturing and assembling prototypes, and front panels are ordered from Mutable Instruments’ production partner.

“At this point the prototype looks good and works well enough to fool people into thinking it’s a finished product. Then there’s a rather long playtesting phase. Just messing around with the module to get a feel for how long the excitement lasts, sending the module to the only tester who actually finds bugs, and for digital modules there’s a lot of balancing and curation.

“I [then] let the project rest for some time, and if I still feel excited about it, I move forward”.

Moving forward involves FCC/CE compliance tests, writing a user manual, and taking photos for the Mutable Instruments website and retailers. This is followed by a pre-production run of 20 modules to check that everything runs smoothly.

“I tend to be present at the factory the day they are made,” explains Gillet. “They are [then] thoroughly tested and sent to people for some additional field-testing. At this stage it’s no longer about getting feedback about the design, just making sure unexpected things won’t happen in very diverse and wild configurations”.

If there are no reports of problems for 3 months, a much larger order is placed with the manufacturer, typically between 480 and 980 units, while a single module on average sells 3,000-5,000 units over its lifetime. Plaits, the successor to Braid, has so far required eight or nine batches of 1,000 units.

“Obviously I don’t build anything with my own hands,” says Gillet. “I receive the modules in their box, ready to ship to dealers. My contract manufacturers take care of everything i.e. board assembly, panel assembly, testing, and packaging. Thank god for that”.

***

If you go back and read or watch various interviews with Döpfer, something resembling an old joke emerges. For years the father of Eurorack has been saying that he thinks the bubble may have finally reached its peak, only to concede that the industry has grown even bigger the following year. However, throughout many of the interviews for this piece, there was a general feeling that growth in the last year or two may have begun to slow even if the market is more saturated than ever.

“I don’t think it’s at its peak, but maybe a slight plateau in its growth,” says Wilson, who recently designed and launched his own “DivKid” branded module in partnership with Befaco, a Eurorack maker based in Barcelona, Spain. “There’s definitely larger growth in people making modular devices than there is the market… Sales haven’t increased as much as the outside world looking at modular may think it has”.

“If I had to put my finger up in the air and sort of take a guess, I would say things are about static at the moment, definitely not the growth that was there about five or six years ago,” says Signal Sounds’ Brunton. “The [other] thing is that the mainstream retailers have moved into modular quite a lot, so it’s actually quite difficult to tell if modules are consistently selling. It may well be that it’s selling consistently it’s just selling less per individual retailer.

“People always want the new thing. And the other issue is, there’s always a new thing”.

For anyone interested in creating the next new thing and starting their own Eurorack business, what advice might existing makers and retailers have to offer.

“You have to know the scene,” says Matt “Matttech” Preston, founder of Matttech Modular, an online retailer in Manchester, U.K. “Immerse yourself in the scene, know what’s popular and then think whether you could either add something, make it smaller or make it cheaper… Come up with something that you can see there’s nothing like it out there”.

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Mutable Instruments product shot

Another aspect to watch out for is the visual representation of your module, which, Preston says, too many makers initially overlook. “You need front on photos, you need demos — video demos, ideally, but at the very least audio demos — and you need all the text and information to be there”.

“You should focus on your idea,” advises Döpfer. “If you have an idea which you think is great, you should follow your idea and stay on track. Don’t look to the left. Don’t look to the right. If you are sure that you have a good product, you really should release it”.

AJH’s Hall says it is still possible to have a successful Eurorack product but you need to have something that’s different and that people want. “If you’re lacking in either of those, then all you’re gonna do is waste a lot of time and certainly a small amount of money, and possibly a large amount, depending on how you do it,” he says.

Very first MiniMod prototype pcbs

The first AJH Synth Minimod prototype PCBs

“Decide straight away what route you want to go down,” advises Brunton. “Do you just want to make 10 of them, or 20 of them and sell them direct? Or do you want to turn it into a business? Make the decision at the beginning and stick to it. And if you’re going to turn it into at least a part time business, get your pricing right at the beginning. Factor in not just your time and cost on components, but factor in a retailer’s margin and, if you can, a small distributors margin”.

Mutable Instruments’ Gillet argues that quitting the day job too soon is a rookie mistake, and instead you should aim for organic growth and “don’t expect things to work out right away”. She also warns that you could be “too late to the party”. Rather than releasing one more module, consider other clever ways of contributing to the Eurorack ecosystem, such as cases and power distribution, patch management, and interfacing with other tools.

“At this point in time I would advise caution,” echoes Manhattan Analog’s Coates. “If you’re going to get started now, you have a lot more to worry about than we did a decade ago when a hobbyist with some skills like me really could add meaningfully to the landscape… With fewer gaps in the market that need filling, you’ll need to be an order of magnitude more innovative and creative”.

“At no point in creativity can you can you say it’s all been done,” counters Brunton. ‘Everything’s been done, we won’t paint any more pictures or write any more books, because what’s the point?’ Within modular, there’s room to either reinvent the wheel, which is taking old ideas and doing them slightly differently or there’s infinite different combinations you can have just by taking an idea and plugging it into another idea. So sometimes it’s just combining certain things in one module, and then at other times it’s making interesting ideas more accessible”.

Which, perhaps brings us full circle, back to the very beginning when Dieter Döpfer took an old idea and made it infinitely more accessible.

“I’m still excited to go to work every day and I’m very happy,” he tells me. “So as long as this lasts, I think everything’s okay for me and for our company. We had ups and downs during the last years, but we are such a small company we are not that much depending on if sales increase by 20% or go down by 10%. For us, it’s important that it’s fun every day.

“We also have a lot of friends here in our neighbourhood, which use the modules in their system and also play live on stage. It’s a lot of fun for us if we can go to a concert where we see that 50% of the equipment on stage has been manufactured by our company. That’s something that’s incredible. And that’s why we still love this job”.

Dieter Döpfer (Photo credit: Theo Bloderer)

Dieter Döpfer (Photo credit: Theo Bloderer)

The Eurorack allure (in their own words):

“Modular is a spectacle. It is producing crazy sounds, patch cables going everywhere, flashing lights, and this beckoning conglomerate of knobs and faders. Musical instruments, guitars, and drums are already very personal in nature – it becomes a part of you, an extension of your spirit. Then add to that what modular brings, a highly customisable instrument, tailored by you – for you. I think modular enthusiasts are mostly hungry to discover things, new and old, in the realm of electronic sound. The more you discover, the more it feeds into the imagination, thus sparking curiosity to discover more – it is a virtuous cycle”.

— Garren “G-Man” Morse, founder of G-Storm Electro

 

“One of the great things about Eurorack is there is a choice… It’s different things to different people. That’s why there are over 200 manufacturers and each of them have their own approach”.

— Alan “J” Hall, founder of AJH Synth

 

“There’s some separation for me between sound and music. I think you can explore sound for sonic qualities, and learn and engage in that, almost separately to music. Of course, there is a huge crossover and a big grey area between the two. But I just really enjoy all aspects of it, just exploring sound, learning on a technical level, making music, it just felt right, for some reason”.

— Ben “DivKid” Wilson, producer of the DivKid YouTube channel

 

“It attracts and appeals to non-musicians, by which I mean non-standard musicians. So there’s a significant portion of people who get into modular and Eurorack who are coming from completely outside the industry, which means they haven’t really played a keyboard or guitar or any other instrument before”.

— Jason Brunton, founder of Signal Sounds

 

“To be your own mad scientist; the tangibility of tweaking knobs with obscure descriptions, making indicator lights flash to patterns clear to yourself but mysterious to the onlooker, to building the musical instrument of your own design without any limits (besides the size of your wallet)”.

— Tom Verchooten, DIY-er and founder of ThreeTom Modular

 

“From a musician’s perspective, I think the allure of modular synthesis is the absolute lack of limits, the near-infinite customisability. There are modules out there that can help you make nearly any sound you can imagine (and many more besides) and that’s very attractive. On top of that, modular synthesis is just plain fun. There are always moments of serendipity where the instrument will surprise you, and in my case at least, that’s irresistible. It’s also very satisfying to work with such a tactile instrument. Software is fine, I’ve used (and still use) my share like anyone else, but it really is missing something compared to working with real knobs, patch cables, touch interfaces, etc”.

— Jason Coates, founder of Manhattan Analog

 

“It felt for me like a very natural thing to do because with my electronics background, we are used to having components and wiring them together to create something bigger. Modular was a perfect fit for me… I feel flexibility when you can connect things in the way you want”.

— Dr. Leonardo Laguna Ruiz, founder of Vult

 

“I think the main difference to another instrument is that you don’t have an already built instrument. If you go to the guitar shop, you buy a guitar and then you have the final instrument. For a modular, it’s totally different: you have to build your instrument first. It means you have to collect the modules and install them into the case and so on before you can start using the instrument. So that’s totally different compared to other instruments. That first creative process is to design the instrument. So that’s a lot of fun from my point of view.

The second is that, in most cases, you have a very special instrument, which is probably the only one in the world unless you buy a standard system. But I think 90% of all the modular systems are totally mixed with multiple modules from different manufacturers. Each system is very unique”.

— Dieter Döpfer, the father of Eurorack



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viernes, 27 de septiembre de 2019

Cracking the code on podcast advertising for customer acquisition

Of the various channels available to growth marketers, podcast is among the most misunderstood.

Brands like Dollar Shave Club, Squarespace, and ZipRecruiter have deployed podcast advertising for user acquisition for years, but it’s still a channel that flies under the radar. We have managed tens of millions of dollars in podcast ad spend for challenger brands and market leaders alike, and are eager to share some tricks of the trade.

If you want to test in a channel where early adopters are being rewarded with both attractive CAC and scale, here’s what you need to know:

  1. Podcast advertising is used very successfully as a direct-response channel with CAC on par with other consideration-stage activities. It is not just for awareness.
  2. Podcast reach is very good, reaching 51% of US audiences aged 12+ monthly.
  3. Ads read by hosts outperform canned “programmatic” ads.
  4. Tracking is harder than most digital channels and the cost to test the channel is higher than most digital channels.

Dive deeper on podcast ads and other growth marketing tips with Extra Crunch’s ongoing coverage of growth marketing, where Right Side Up was recently featured as a Verified Expert Growth Marketer. 

Who listens, who advertises, and why bother?

Podcast listeners are a sought after group – the audience trends towards educated, early adopters with a high household income. You can find this profile elsewhere, but what makes podcasts unique is that they are choosing to consume that particular content time and time again. The host becomes a trusted voice to deliver them not only interesting stories and banter, but information on companies as well.

Often podcast advertisers are newcomers or start-ups, and the podcast ad might be the first time the listener has heard about that company. Having the first touch with consumers be from a thorough, personal, and often funny host-read interaction is incredibly valuable and helps brands jump over the credibility hurdle. Compare that to an impersonal banner ad, and I’d choose a podcast ad every time. image2 1

Even though the term ‘podcast’ was coined in 2004, advertising in the medium has exploded in the last ~5 years. The IAB has been tracking podcast ad revenue since 2015, when the entire medium generated #105.7 million in ad sales. It recently released its third study of podcast ad revenue, which estimated the US market at $479 million in 2018, with growth accelerating to a projected  $1 billion+ by 2021.

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Andreesen Horowitz did a great investor profile on the space earlier this year, with a helpful rundown of the holistic ecosystem, from hosting mechanisms and platforms to the pace of podcast monetization.

Historically, the medium has been dominated by a mix of comedians doing their own thing, radio entities simulcasting sports shows, and otherwise popular shows that had a devoted niche following relative to other mediums. Most advertisers bought podcast ads as an extension of their other audio acquisition campaigns.

Podcasts go mainstream

Then Serial came along, in 2014, exploding into popularity and pop culture. They ran a MailChimp ad that had someone mispronouncing the name of the company as “MailKimp”, which was a funny inside joke for those in the know. Nina Cwik and David Raphael, co-founders of Public Media Marketing, explain the initial conversation around this now iconic spot.

“While discussing a launch sponsorship with sponsors there wasn’t a huge amount of interest in taking a risk on a new show even with the amazing This American Life provenance. MailChimp was committed to supporting Serial. The talented production team at Serial and This American Life created MailKimp and the sponsor was rewarded for believing in the show.”

Not only were they rewarded by being a launch sponsor of one of the most successful podcasts in history, but once Serial and the medium itself expanded, a loving impersonation of Serial host Sarah Koenig and the MailKimp joke eventually made its way into a Saturday Night Live skit. Serial also appealed to a female audience, helping to bring new listeners into the channel, and podcasters and advertisers followed.

Over the past 5 years, the space has diversified. We now see so many different shows with all flavors of true crime, news and politics takes that you don’t hear in the broader media picture, women talking to other women about literally everything, comedy and pop culture pods as diverse as Bodega Boys, Who? Weekly, and RuPaul: What’s the Tee with Michelle Visage, and a podcast to go with every reality and television show you can think of. There are too many shows to talk about; there are over 750,000 shows indexed by iTunes.

How to engage for growth advertising

So how do companies start testing in podcasts? And how do they do so successfully?

Start with a strong (but doable budget) and take your time

We advise companies to start with a test spend that you consider meaningful in the context of your other customer acquisition efforts. Initial tests in the channel that are properly diversified typically vary from $50,000 to $150,000 in media cost. If the idea of a testing budget in the high five figures makes you gasp, don’t rush it. If you under-invest, you run the risk of a false negative, i.e. you didn’t spend enough to validate performance, or a false positive; when you buy tiny shows, one or two sales may pay back. If you make media decisions at scale based on that data, you may find yourself in deep water. If the risk of testing a new channel and having a dip in your CAC is too great, we recommend you exhaust other channels, like Facebook, before jumping into the podcast space.

Podcast offers advertisers a low barrier to entry. Creative production is limited to producing copy points for hosts to use as they record their ad reads. However, it is quite manual relative to digital channels, and can take weeks to put into place. Most purchasing is done through a show’s sales representation or network, via calls and emails, and set in advance (sometimes way in advance depending on inventory levels). It entails RFPing multiple network partners, doing research and outreach to independent shows, gathering rates and evaluating content, and finally making decisions based on budget and inventory availability. We often describe this as the media puzzle – making sure that the ideal shows, with favorable pricing are available when you want them to be. This can take time and some back and forth with your network rep to set in stone, so give yourself room to plan ahead.

What’s the media landscape look like and how do you pick shows? 

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Image via Getty Images / venimo

We buy with a lot of direct shows, sales representation firms, and ad networks. We’re starting to see the beginnings of programmatic and exchange-based inventory become available, but it’s largely impression-based media, which isn’t yet a proven tactic that direct response-oriented advertisers can consistently use for customer acquisition. There are some managed service-like buying partners in the space, that work to varying degrees of efficiency for customer acquisition.

When it comes to choosing what types of shows to partner with, beyond budget and availability, it’s important to remember the obvious choice may not be the best one.

One of the most consistent, and pleasant, surprises in podcast advertising is how well shows that are seemingly unrelated to a product work well for customer acquisition. We’ve worked on products that had a primary target demographic of suburban moms, but guess what? Gamers want to stay at home and order snacks and food delivery, too; they have disposable income and are harder to reach via traditional channels.

If you’re advertising a product targeted to parents, you shouldn’t just test into parenting shows, you should also consider testing into shows with hosts who are parents, but have content not at all or tangentially related to parenting, like Your Mom’s House, with Tom Segura and Christina Pazsitzky. Sure, it’s a comedy podcast, and it’s NSFW (and hilarious). They’re also human parents who they do amazing reads, and their fans are legion.

Ryan Iyengar, CMO of HealthIQ, notes that “hosts with wildly different backgrounds were able to find a through-line to connect ad reads with their audiences, regardless of product line.” Of course, contextual advertising is worth consideration, and there are sometimes unique opportunities, but most successful shows aren’t a bullseye for content.

We’ve also seen the inverse, on contextual fit; food products can either do amazing or not well at all on food-related podcasts. If you have a food product with mass appeal, but one that (for example) many home cooks may already be familiar with, you may be better off doing just about any other popular genre of shows besides food.

Plus, these hosts are pros; they’ve been doing ad reads for everything from mattresses to meal kits for years. They know how to talk about your product in an engaging way.

Doug Hoggatt, the VP of Marketing at Betabrand, agrees, mentioning he would also coach new advertisers to “take the time to test across genres and hosts, you’ll be surprised at the results.” Iyengar is also the former VP of Marketing at ZipRecruiter; if you’ve ever heard a podcast, you may have heard the company advertised once or twice. He also notes, “[regardless of] content of the show, audiences can be interested in all sorts of topics, and are still potential customers. Yes, even hiring managers listen to comedy podcasts!”

Many business-to-business (B2B) advertisers do well in the channel, in part due to higher allowable CAC and high lifetime value (LTV). And the same point about show selection holds true for those audiences, as well. Visnick noted, “[HoneyBook] originally focused on testing industry-specific podcasts as those seemed to be the most natural way to target our prospective customers. We discovered that by diversifying our podcast mix into non-industry content we could still reach our target audience while also growing our reach and overall program performance.”

If we hear something that we think can help us at work, we’re amenable to that message, especially when it comes from our favorite host. Having an open mind to testing has helped so many advertisers unlock additional shows, and possible customers. You can take those insights back to other channels, too, and begin to integrate your campaigns and establish cross-channel frequency.

Pricing in the channel is unstable, and demand-based because inventory is finite; effective CPMs for host read, embedded mid-roll advertisements — by far, the most consistently performing ad unit for customer acquisition in the space — vary from $10 to $100. Yes, really.

Worrying too much about CPMs could mean that you’re leaving behind some of the best inventory in the space. So while it could make sense to cut higher CPM placements from a media plan, you want to be cautious. You could inadvertently cut out potential volume drivers or otherwise highly effective placements.

Allow for the host’s personality to shine through

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Image via Getty Images / TwilightShow

The listener is there for the hosts. They relate to them, laugh with them, or laugh at them. They come to expect a performance from them, and often that performance bleeds into the ad reads. Whether it’s a semi-NSFW jingle about MeUndies from Bill Burr, or Joe Rogan recommending his mind-blowing NatureBox snack combination, or Levar Burton delivering an oh-so soothing Calm read.

Alan Abdine, Senior Vice President of Business Development for Rooster Teeth, a network with geeky, gamer shows with a hint of irreverence, said “the best ads are the ads that are organic, natural, and originate from the voice of the show talent. When brands allow our hosts to be themselves, there are more opportunities for entertaining side stories and commentary related to the brand.”

He continues to say his “belief is that if an advertiser is willing to spend money to reach out audience, then let us be the experts on that audience and let us use our own voice to share their message and talking points!  They will always get better results in that scenario.”

There is a certain special trust that goes into podcast ads. And to allow hosts to be themselves while also being a positive brand advocate often mean striking a balance between scripting and giving space. The most commonly purchased ad unit for customer acquisition advertisers is a host-read, embedded, mid-roll advertisement, typically :60 in length, but many hosts go over.

Overly scripting the copy can lead to an ad sounding inauthentic and infringe on their creativity. Kate Spencer, the co-host of Forever 35, notes that “often there are a lot of required talking points to hit in a short amount of time. We’re always happy to oblige, but I think it takes away from the organic and conversational nature of the ad, which is what makes podcast advertising especially unique. ”

On the flip side, not scripting enough could lead to a disjointed read where the host is trying to piece value props together on the fly. Nick Freeman, Chief Revenue Officer at Cadence13, explains that “some hosts do like the perfectly written out :60 script, while others like bullets they can riff off of.” Because podcast campaign test across multiple shows and personalities, it’s best to find a starting point in your copy where hosts can be guided, but not stifled. Freeman says “that doesn’t necessarily mean trying to make jokes for comedy hosts, for example, so much as it’s giving the hosts who do well with it the freedom to ad-lib.”

And for those that want to get a little more creative, the space is primed for custom integrations. Recently DoorDash partnered with Rooster Teeth for an ad on a livestream in celebration of a new game their studios were releasing. Since there was a visual element, DoorDash and Rooster Teeth partnered on a creative spin to the ad.

Instead of the typical copy, food would be delivered to the group of hosts while recording. Grant Durando, Senior Marketing Consultant at Right Side Up, works with DoorDash on their podcast campaign and stewarded this unique partnership. “[Rooster Teeth] approached us with the opportunity to engage with the live stream in a deeper way than just a regular podcast ad. It was definitely an unorthodox integration, but exciting to be in front of the right audience for DoorDash, at scale, and in a meaningful, memorable way. Many conversations about chicken nuggets later (which I never thought would be part of my job), Rooster Teeth and Vicious Circle delivered a superb ad experience, [integrating] multiple brand mentions and actually making DoorDash a part of the content itself.”

Zack Boone, Senior Director of Sales at Rooster Teeth, added there is, “nothing better than having clients that understand how impactful utterly stupid things like this can be for a brand.” DoorDash “[offers] industry-leading selection to our customers,” said Micah Moreau, VP of Growth Marketing at DoorDash. “It was incredibly effective to bring the DoorDash experience to life with Rooster Teeth in a highly differentiated, yet relevant way.”

How do you measure response?

Ads almost always end in some sort of call to action, like use the show’s promo code to save money, or visit a URL to get a free trial of a product for listeners of the show. It’s a way for shows to get credit for their listeners taking some sort of action, usually a purchase, related to hearing the ad.

And it’s how advertisers can figure out if their ad investments are paying back, too. Along those lines, Hoggatt was happy to see “how direct response the channel could be. I was surprised at the lift in site visits and follow-on orders that correlate so closely to when our podcasts drop.” Consumers have been conditioned to listen for that call to action at the end of an advertisement so we can measure a direct response in the channel.

That isn’t to say podcast advertising should displace a highly effective channel like paid social or paid search in your paid marketing testing priorities. We often ask advertisers information about their overall CAC or CPA  from other paid marketing efforts like Facebook or Google advertising, and use that data to benchmark target CAC for podcast.

As a general rule of thumb, if you can’t make Facebook or Google work for customer acquisition at meaningful scale, think twice before you engage in testing podcasts at a scale meaningful to your business. But if you’re looking for demand generating channels, podcast is an excellent contender.

“The success we’ve seen from podcast advertising has proven that we can drive sales through paid media outside of “traditional” direct digital response campaigns,” said Visnick. “We’ve significantly grown our podcast budget every quarter since we started testing the channel and it’s now a core part of our overall acquisition strategy and an important part of our media mix.

Don’t under-account for breakage or indirect activity

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Image via Getty Images / Olivier Le Moal

Another challenge for advertisers that aren’t used to offline channels is managing indirect activity, also sometimes called breakage. It’s imperative to look at indirect activity to help triangulate response, as another way to get a false negative is to only look at direct response, i.e. direct redemptions of a promo code or sales from only users who visited the vanity URL.

A decent analog is like view-through conversions, but without the technology enablement. You can tell, via tracking, what actions site visitors have taken after exposure to ads on Facebook and Google, etc.

However, there isn’t a way for a consumer to tap or click on your podcast ad, so you don’t have a direct action correlated to ad download or exposure, nor can you track indirect activity (view-through) via pixels or other technology enablement. The aforementioned promo code/vanity URL combo is what generates that direct response.

To get around this breakage and triangulate a full response, advertisers commonly use a post-conversion attribution survey, colloquially referred to as a How Did You Hear About Us? or HDYHAU survey. This allows for a crude, but effective, translation of the impact that podcasts had on that user’s activity.

It helps you determine how much of the activity you’re capturing in paid search, for example, may have actually been driven by podcasts, streaming audio, or television. It’s self-reported data from users, sure, and it can feel a little shaky when you’re used to more precise digital measurement, but it’s how virtually every scaled advertiser in the channel has discovered a path to scale.

It also helps you determine benchmarks before you get into other channels, and can provide a solid look at multi-touch attribution if the survey is designed with best practices, and served to enough of the population to achieve stability.

Why can’t we use measurement techniques from other mediums?

We already talked about why, even though podcasts are digital audio, we can’t track conversions digitally (we know, it’s a little crazy). Unlike television, where you can use spot-based attribution, or radio, where you can achieve consistent ad exposure and but according to average quarter-hour (AQH) ratings, there’s a delay in both download of an episode and media consumption.

For advertisers, that means performance comes in over time, and it takes a minute to build reach and frequency (R/F). You may see very little activity for the first week or two of a campaign, and then as R/F builds and crescendos, you’ll see conversion activity catch up. That’s when you can start to get a solid picture of return on ad spend (ROAS); you should have structured your tests so you have a good sense of performance by the third or fourth drop with a show.

Looking at results sooner is possible but largely inadvisable. “Give it time,” says Dan Visnick, CMO at HoneyBook, “It can take a few weeks to see the impact from a single podcast, and months to build a strong portfolio.”

One of the biggest mistakes new advertisers in the channel make is getting a false positive, by testing into tiny shows that back out because 2 people bought their product, and then quickly scaling in the same genre only to find out that the content doesn’t scale.

False negatives are also common, when advertisers get cold feet in the first few weeks of an integration, and cancel shows after one ad insertion in a single episode. The channel requires diligence in testing, and if you have other business challenges to navigate, using digital growth channels can help iron out your messaging, landing pages, etc. before you launch offline channels.

Although you may have honed your messaging in other channels, you should expect to be flexible when it comes to podcast creative.

Opportunities to expand to other audio acquisition opportunities

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Image via Getty Images / Anastasiia_New

Positive signals in podcast campaigns can also indicate that other audio channels may be ripe for testing, which can help diversify your marketing mix and minimize the pressure on individuals channels. Hoggatt says his “success in podcast advertising proved that it is possible to invest in offline channels and find measurable success.”

SiriusXM and streaming platforms, whether pureplay like Pandora or Spotify, or aggregators like Westwood One and ESPN, are great next steps for advertisers who see the right signals in podcast. For SiriusXM, it’s a high household income audience that are used to paying for a subscription (any subscription model companies out there?), and streaming audiences are choosing to listen to their content, similarly to how podcast listeners choose their content. The podcast landscape is the perfect arena to play in to learn more about how your brand works in offline media and allows there to be a stepping stone into other mediums.

Be good stewards

We know that podcast advertising can have a powerful impact on the marketing mix for companies of all sizes. As more and more players get involved in the space, it benefits all involved, from advertisers, to networks, to marketers.

It’s rare to have an opportunity to participate in a nascent medium, and be good stewards of one of the last remaining mediums on earth with finite inventory and listeners who actually respond to ads. And along the way, we hope to change the way people think about traditional offline media channels, like how they can be held to high growth performance standards, and where they intersect with popular digital growth tactics like paid social.

You’ll have to get creative, but with some trust and patience, and adherence to best practices, advertisers can reap significant benefits and customer acquisition, at scale, from podcast advertising campaigns.

9 things growth marketers should do when getting started:

  • Create the team (and time!) needed to execute a campaign, whether in-house or via partnership with a subject matter expert like a consultancy or agency
  • Learn the language of podcast advertising, terms like download carry a lot of baggage and understanding them can impact your campaign’s performance
  • Budget your initial test(s) appropriately to avoid a false negative or positive result
  • Have an open mind on show selection; make sure you test across multiple genres and formats
  • Measure direct and indirect activity, to triangulate performance and business impact, and make optimizations and decisions on renewals
  • Support, don’t stifle, the personality of the show hosts
  • Get comfortable getting creative, and take time to onboard hosts
  • Keep an eye out for additional opportunities, not only in podcast, but in other audio channels as well
  • Be a good partner to shows, networks, and others in the space. It’s ours to nurture


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jueves, 26 de septiembre de 2019

Privacy in a digital world

Technological progress has created a situation of severe tension and incompatibility between the right to privacy and the extensive data pooling on which the digital economy is based. This development requires new thinking about the substance of that right.

In the last decade, both governments and giant corporations have become data miners, collecting information about every aspect of our activities, behavior and lifestyle. New and inexpensive forms of data storage and the internet connectivity revolution — not only in content, but in fact — in just about everything (from smart appliances to nanobots inside people’s bodies) — enable the constant transmission of big data from sensors and data-collection devices to central “brains”; the artificial intelligence revolution has made it possible to analyze the masses of data gathered in this way.

The intensive collection of data and the inherent advantages of the new technology have spawned the cynical idea that privacy is dead, and we might as well just get used to that fact. In what follows, I will describe three aspects of the right to privacy that have become especially relevant in the digital world. I will then demonstrate that not only is privacy still alive and kicking, but also that we should treat it with the respect it deserves as the most important of all human rights in the digital world.

The first perspective on privacy in the digital world is the idea that the appropriate reaction to the massive pooling of data is to enhance this right, so that we all have better control over our personal information. Individuals should be able to choose what space within their personal domain can be accessed by others and to control the manner, scope and timing of its exposure.

From this perspective, and in a different and more extreme fashion than with regard to other human rights, the borders of the right to privacy allow for compromise and flexibility. Thanks to this control, I — as an individual — have the right to view the content of databases containing information about me. Furthermore, no one is allowed to make any use of this information without my consent, except in extraordinary circumstances. I retain the privilege to agree to the terms of use before I download an app onto my cell phone or began to use freeware — product categories whose economic model rests on commercializing my personal data.

Above all, we need to understand the limits of privacy as control.

This approach is reflected in the regulations requiring my consent for others to make use of and process personal data, ensure my access to data about myself and stipulate that I can have it deleted, corrected or transferred to a different company.

But there is one serious problem with this approach: It is utter fiction. It simply isn’t possible to speak about consent to violations of privacy in a world in which data is processed in many ways and for many purposes, some of which cannot be foreseen at the time when consent is granted. Furthermore, every beginning scholar of behavioral psychology will tell you that no one reads the terms of use, even when they are phrased concisely or displayed in large print — neither of which is the case, of course.

Were this not enough, there is also the psychological phenomenon of the “privacy paradox,” which refers to the discrepancy between the concept of privacy reflected in what users say (“I care deeply about my privacy”) and their actual behavior (“A free pizza? Fantastic! What information do you need?”)

The downside of the notion of privacy as control is that our control of our personal data is quite fictional. There is an overall problem — whereby commercial entities avail themselves of huge tranches of private information without having obtained real consent for doing so. This information, in turn, can be put to various uses, some of which are of value, while others pose serious threats to society.

Above all, we need to understand the limits of privacy as control. It is clear that the best approach would be to upgrade our digital literacy and learn how to deal with the situation; but the problems noted here make this idea only minimally relevant. Perhaps the solution is to start with clearer legislation — national or international — that defines reasonable and legitimate uses of personal information and mandates companies to obtain  the consent of the individual involved, only when the proposed use does not fall into that category.

Somewhat paradoxically, the second approach to the right to privacy in a digital world relates to the most basic and classic connotation of the right to privacy — the “right to be left alone.” This refers to our right to preserve and protect our identity and maintain a safe and protected space around our body, thoughts, feelings, darkest secrets, lifestyle and intimate activities. A world with sensors and surveillance cameras all around us, along with recording devices and gadgets that are constantly monitoring what we do, has far-reaching psychological ramifications.

In the discourse on privacy, we tend to deal chiefly with questions of controlling the transmission or management of information after it has been collected, with regards to issues of data anonymization, security and encryption. But what we need at the present time is to ask whether there really is a commercial, business or public need to collect our private data so obsessively.

Against the clear advantages of technological progress, commercial convenience and even law enforcement, we must weigh the chilling effect on curiosity, on trust, on creativity, on intimate activity, on the ability to think outside the box — which is the critical spark to innovation.

What’s more, the essential feature of all digital personal assistants is the human traits (voice, face, language) with which their developers have endowed them. These devices are supposed to give us the feeling that there is another human being in the room. Researchers have shown that in contrast to our behavior with what we perceive as a machine (such as a computer or telephone), we react to humanized technology as if a real person were standing there. The right to be left alone will get a whole new meaning, then, different than in the internet age.

The third approach to the right to privacy is the idea that privacy should make it impossible for commercial or government entities to combine our personal data with big data amassed from other people in order to construct precise personality, psychological and behavioral profiles through machine learning. This phenomenon, known as the “autonomy trap,” applies to information about emotional tendencies, insecurity, sexual orientation (even of persons still in the closet), fears and anxieties and more.

The problem is that the personality profile is used for retargeting advertisements of products or services or for other facets of influencing behavior — all of it in a way that is precisely tailored to the needs associated with the profile.

In a world in which it is possible to pool and analyze information about us in order to generate buying and behavior recommendations “just for you” (purchases on Amazon, shows on Netflix, navigation guides such as Waze), we in effect are unwittingly surrendering some of our decision-making autonomy to systems that know what is the best route to our destination and what we should eat. 

Without individual privacy there is no meaning to an individual’s life.

We also are exposed to attempts at individual persuasion tailored just for us, with a power, invasiveness and capacity that did not exist in the past. Think “self-restraint preference algorithms” power devices, such as personal assistants, whose purpose is to learn as much about us as possible — what we are interested in, who our friends are, our habits, our mood — and then to help us by sending messages, making phone calls, setting appointments, ordering products or making travel reservations.

We must remember the slippery slope from the use of techniques for collecting personal information in order to offer products and services, and the use of the very same techniques to influence our thoughts, creates an autonomy trap about beliefs, and undermines our trust in democratic institutions — in brief, manipulates elections.

The Cambridge Analytica scandal in the spring of 2018 — which took the lid off the exploitation of personal data in order to sway the elections in many countries — shows that the right to privacy goes far beyond individual control of information and extends to a threat to the very possibility of conducting a sound democratic process, and thus — of protecting all human rights.

And so, in the digital world, privacy must be seen as a crucially important right for us as a society, as a collective. At the conceptual level it needs to go through the same process of evolution as its older sibling, the right to freedom of expression. Just as freedom of expression started out as the right of individuals to scream to their heart’s content, and developed into a collective right that sustains a rich and functional public discourse so that we can engage in a healthy democratic process, so too privacy must grow and develop — from the right of individuals to trade in their own data, into a collective right of defense against autonomy traps, in the context of elections and mind control.

The laws governing commercial competition will have to develop ideas that see personal data as an independent market. Antitrust agencies will have to look at the concentration of the personal data held by a single entity.

By the same token, the laws on election propaganda will have to regulate what types of personal information may not be exploited in campaigns, and determine whether there are techniques whose persuasive and manipulative powers are so great that they should be banned.

Privacy is not dead. In fact, it has become our most basic right and must be protected. Without individual privacy there is no meaning to an individual’s life, and without privacy, democracy loses all meaning.



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