The advent of social media has changed the music industry for good. With fans able to source and share music using Spotify, Facebook and YouTube, it’s never been more important for record labels to become digitally aware. But what challenges does this bring for the music industry? The Drum caught up with Aaron Bogucki, senior digital campaign manager at Polydor Ltd, to find out how the company is responding to digital challenges – from its relationship with Spotify to the gamification of the music fan experience.From illegal file-sharing to the by-passing for A&R men and record companies, to downloads outstripping CD sales; it seemed for a while that technology was striking fear into the music business. Has the industry got its head round modern developments in music consumption?We were the first media industry to be truly disrupted by digital distribution; something that the film and publishing industry is now experiencing in a big way. The music industry stumbled at the first hurdle around Napster but it’s forced us to become early adopters, always finding new means of connecting our artists with their fans. iTunes and MySpace in the mid-2000s were assets that no other media industry really utilised to market and retail their products as effectively as the music industry has. Over the past few years, YouTube has become the largest search engine for discovering new music so our marketing strategies have adapted to capitalise on that. We’re more open to experimenting with new distribution and promotional models so we’re seeing countless start-ups being embraced and licensed by labels and publishers which can only be a good thing for the industry. Music and social media are becoming ever more entwined. What is your relationship with social platforms such as Spotify and Facebook? Music has always been an inherently social experience, from sharing mix tapes and live bootlegs to the live gig experience. Social media has now allowed us to further amplify that behaviour so social platforms are key to any marketing campaign we embark on. In pop music we’re dealing with a generation of consumers that have only consumed music via digital means. Ask a kid about a song and they’ll search for it on YouTube via their Blackberry and then if they like it they’ll share it via Twitter, Facebook or BBM. We work closely with social platforms to identify best practice tactics that achieve different goals throughout the campaign. Early on we’ll utilise Soundcloud, Spotify, and YouTube to drive discovery with core early adopters and bloggers. Moving along the release cycle, our job is to move the consumer from the point of being aware of an artist and their music to becoming a consumer, which takes a different strategy for each artist and fan base so it can be a real challenge. On the flip side we are also signing artists who are incredibly savvy in the digital space so they have the instinct built in on how they can leverage social media effectively. Despite the massive opportunities in the social space, it’s very important to remember to build your own consumer database and communicate with them effectively. If Facebook disappeared tomorrow then so would your community of followers so it’s imperative that you utilise social networks to drive your own data collection. Spotify is a good tool for people to discover your artists' music, but does it work commercially for record labels?For us Spotify has been a great partner both promotionally and commercially. They’ve developed a fantastic platform that allows our consumers to discover and share more music than ever before so I feel that having them around is a good thing. Spotify, or any legal streaming service, is good for labels and artists for a number of reasons. First, it offers a better user experience than piracy. It’s quicker, easier and safer to use a legal streaming service. We know that there is a certain demographic will never pay for music, however by offering a number of legal alternatives to P2P we can begin to grow the streaming market and ultimately begin to convert a large portion of the market to lifelong digital consumers of music. We know that in markets that have Spotify in Europe the digital revenue growth rate is 43% compared to 9.3% in those markets without it. Not only does this affect the income received from streaming partners, but it also helps to grow the digital retail market as a whole. Nobody is claiming that streaming will fill the margin lost by the decline in physical sales but it’s all part of building a stronger digital ecosystem for music which will benefit our industry in the long term. In what way does Polydor interact with fans on social mediums? What innovations can we expect to see in the near future?As a label we’re very passionate about delivering great experiences to fans across our diverse roster. With so many different types of fans we deal with on a daily basis, we work hard at profiling these groups and working out which platform or channel most effectively engages them. We’re looking to do more this year in live collaboration with our communities, allowing them to influence various areas of an artist’s campaign and feel real ownership and proximity to the artist. For example, last year we launched a global crowd-sourced fan video for Snow Patrol. The gamification of the fan experience is something we’re moving into this year; rewarding fans for engaging with an artist and spreading the marketing message for us. Areas such as mobile and social gaming have yet to really yield commercial success for a label or artists so we’re working globally to position our artists in this space. Location-based marketing opportunities are pretty compelling. I’m excited by the idea that via GPS we can contextualise the fans experience on their mobile device, for example when they’re at a gig we can offer them a customised web experience bringing them closer to the band with live photo uploads, maybe even allowing them to choose the encore songs via the band’s mobile website. Second screen social interaction with our content is also an exciting space we’re moving into in 2012. How do you measure the success of a social media campaign? KPI’s change throughout the course of an artist’s marketing campaign so our social media targets evolve constantly. Early on it’s about achieving clear positioning in the market, building awareness and profile for your artist, and identifying core influencer fans and bloggers who will spread the music so we measure success by Soundcloud, Spotify and YouTube plays, blog posts, and shares to Facebook and Twitter. Moving forward we aim to attract new fans to the community, engage them with compelling content and access to the artist, and evolve the fans into influencers and ultimately consumers of the artist’s music, so Facebook likes, Twitter followers and YouTube subscribers are a key metric. Shazam has become a great indicator of a song’s popularity pre-release once the track hits radio so we’ve begun to work closely with them to covert these scans into new members of the artist’s community. Facebook’s ‘Talking about this’ metric has been a great indicator of buzz and conversation around an artist so we have been using this quite a lot. Ultimately it is about selling albums and tracks so hopefully by the time we communicate a sales message we’ve built a strong enough and valuable relationship between the artist and fans we can convert them to sales. Of course it doesn’t end there so keeping the conversation engaging with the artist at the core is paramount to the success of a social media campaign.Aaron Bogucki is a member of a keynote panel taking place as part of the Social Media World Forum on 27 March. The panel will look at social media and brand management and how brands can build trust using social media. The two-day Social Media World Forum conference takes place at the Olympia, London on 27-28 March.