I had the pleasure of observing Scott Galloway teach.

Scott is a rock star. He’s a boardmember of the NY Times, focusing on expanding the paper’s digital presence. He founded brand-strategy consultancy Prophet (my employer) in his late 20s and publicly-traded (though de-listed) Red Envelope at 34. He was also on the board of Gateway and now teaches at NYU Stern.

And I had the sweet opportunity to observe him lecture for 3 hours in his MBA brand planning course.

Afterward, my hand ached from note-taking. Check out these pearls of wisdom worth a mental bookmark:

1. It’s all about return to shareholders. You don’t want to be that cool marketer in all-black clothing that doesn’t understand shareholder value.
2. Rookie mistake for a brand consultant is to just say “Do X.” That person tops out at VP. Where is the return? You need to be able to allocate capital. [This reminds me of Buffet. All marketing should deconstruct to ROI, allocation of capital, and limited resources.]
3. I cannot think of one company that should not be using SEO.
4. Google has begun to incorporate Brand into page rank. Brand counts for something.
5. A good consultant manages their client. Most consulting engagements fail because they fall of the edge.
6. What gets measured gets done.
7. [For evaluating brand attributes] Three pillars: Is it differentiated? Is it relevant? Is it sustainable?
8. Co-branding creates credibility.
9. Eliminate the words “like,” “you know,” and “I mean” from your vocabulary. They do you no good.

I’ve converted countless friends to Mint.com, a sweet site for tracking personal finances.

It’s a marketer’s dream, a passionate customer with enough loyalty and audacity to push Mint.com on anyone. These are Mint.com’s “influencers,” a la Seth Godin.

The influencers are product pushers. They’re “that guy” during a computer discussion who ruthlessly lauds Apple and attempts to convert any PC user.

I’ve been thinking about the pusher’s talking points, or “ammo” recently. Does she rely on Apple’s product features (ease of use, speed, applications)? Or is it something intangible, like how Apple makes you feel?

Talking about Brands

Supposing I am in the middle of a recommendation pitch, where does it usually start?

Marketers have a simple framework to discuss brands (it’s branding 101). Think of this as a pyramid, starting at the bottom:

1. Functional Benefits – these are the benefits directly related to the product. If you’ve shopped for computers, you’ve definitely seen it: Computer A has 2GHz processor, Computer B has 1.5Ghz processor; therefore, A>B. Functional benefits are very easy to compare.

2. Emotional Benefits – Notice how easy it was for computers to compete on function–it’s merely a battle for speed. Functional attributes ladder-up to the emotional benefits: Rolex is about luxury, Apple is creativity. Try one-upping your competition on that–not so easy.

3. Self-Expressive/Higher Order: this transcends emotion. Apple makes you feel progressive or unique. Terracycle expresses green-movement and sustainability.

Pushing Mint.com

Back to Mint.com, the financial management site. One of my friends was a user of Quicken. Appealing to functional benefits seemed like a reasonable route: “Mint.com offers email alerts when you overspend.” Or “Mint.com has more customization than Quicken.”

But quite a few people have never used financial management software–they could care less about the features. That’s where the emotional and self-expressive benefits play. “Mint will help you get a better handle on your finances. You will feel a lot better about your spending habits.”

Arming your Influencers

If influencers, the really passionate customers, are pushing products through their network, are they well equipped for the task? Sometimes the functional and emotional benefits are not very easy to articulate. As a user of Delicious, I find it difficult to convert friends to the service. For the life of me, I cannot describe social bookmarking effectively. Is this my fault?

Mint has an awesome front page, loaded with several marketing bullets, emotional and functional. Perhaps subconsciously, I find myself exploiting these same talking points to friends. Some products are just so much easier to discuss and convert friends to. Why is this? It’s definitely worth some toilet thinking time.

In short, every service has a fan club, the influencers that ruthlessly push their favorite products on others. What’s their ammo? It comes down to the same points that marketers use: functional, emotional, and expressive benefits. If this is how we recommend products, are influencers getting all of the ammo they need? Are they equipped with talking points needed for a successful conversion? Food for thought.

A few observations after 9 days in Spain:

1. Psychogical Pricing – practice, the Spanairds do not. This is a common strategy observed everywhere in the US: employing odd prices, slightly less than a round number (e.g., $299.99, $1.98). In fact, it’s so prevalent that rounded price points (e.g., $30) are considered prestigious. Consider McDonalds and a fine restaurant; I’m sure that you can imagine which business employs the respective pricing strategy. Despite it’s controversial use and ambiguous efficacy, almost all prices in Spain were rounded to the nearest Euro.

2. Peeping Cross-Walks – Spanish cross-walks make a “peeping” sound (watch here), starting off with a loop of fast peeps, slowing down as time few chirps a second. After a day of rumination, I reasoned that it’s a beautiful solution for the blind to cross the street, audibly. Given it’s such a strong signal, is there even a need for the expensive box showing the “walking man” and “big red hand?”

3. Fast Food — Traditional Spanish food consumption is vastly different than the US. Lunch is typically a much larger meal, perhaps 3-4 courses, with average prices around 10-20 Euro ($13 – $25). Dinner is small: a few tapas (finger sandwiches) with a beer. I noticed, however, that in food courts lines were much longer for McDonalds/KFC compared to traditional Spanish dining merchants. In fact, I observed one Spanish restaurant employee bitterly glaring at the McDonalds queue, while observing that his restaurant was completely empty. It’s a story that’s been told for hundreds of years: old-world companies refusing to adapt to changing consumer habits.

In part 1, I reviewed sampled music’s legal issues (precedent in 90s) and history (birth in 80s).

Sampling occurs throughout history. Owen Gallagher cites the anagram as the first remix, “in art, the obvious one is collage. Folk music was spread by word of mouth…one person…would often apply their own variations to it.” Owen also mentions film in the 1920s, where recuts and remixes existed since the birth of editing. Faris Yakob, an authority on the remix, believes this prevalence throughout history is no coincidence, “I believe that culture is recombinant. I believe that ideas are new combinations.”

The big difference today, however, is how much easier it is. Consider the difficulty DJ Kool Herc faced when attempting to find and sample Apache, or the hardships encountered by artists sued for licensing fees. Comparatively, the Internet has destroyed the barriers to combine disparate ideas and rehash content.

Sampled content has proliferated on the Internet, be it an application via Twitter’s API or a stellar dance performance of Beyonce’s “Single Ladies.” A few examples represent this trend:

• Girl Talk — the NY Times writes that Girl Talk is “a lawsuit waiting to happen.” Girl Talk, the stage name of Gregg Gillis, is a biologist by day, DJ by night. He music is a hyper-sample, clipping several samples from songs and compiling them into a complete 3-minute remix. His latest album was Time’s top 10 of 2008 and Blender’s 2nd place. Why hasn’t Girl Talk been sued? He doesn’t “sell” his sample-created music–everything is free online (via a “choose your own price” model). The record companies have yet to approach him for copyright infringement.

• The Grey Album — Danger Mouse, member of Gnarls Barkley and DJ extraordinaire, created the Grey Album in 2004, a combination of the Beatles’ The White Album and Jay Z’s The Black Album. The legal experience was the opposite of Girl Talk’s: EMI, owner of the Beatles’ music rights, demanded that Danger Mouse halt all distribution of The Grey Album. Danger Mouse did not receive permission from EMI or Jay-Z (though Jay-Z released the album a-capella, tacitly sanctioning mash-ups and remixes).

• Creative Commons — Traditional copyright concerns the protection of every artist’s right–the famous “all rights reserved.” Founded by a law professor, The Creative Commons provides a method for artists to reserve only some rights, allowing others to create derivative works–to co-author and to co-create. This is exactly what Jay-Z intended for the a-capella version of the Black Album. If Jay-Z were to license his work through the Creative Commons, he could expressly sanction the remix of his album for commercial and non-commercial purposes–exactly what Danger Mouse did.

• APIs — In my opinion, the API represents the convergence of sampling, remixing, and co-creative forces (with marketers are beginning to notice). if you’ve ever used a Twitter App or tinkered with a Google Maps mashup, you’re interacting with an Application Program Interface (API). Without getting too technical, APIs allow people to request information from a website. In Twitter, it could be a user’s last 10 tweets, or on Yelp, the top reviews for Per Se. APIs have increased in popularity with the success of collaboration in ways unimaginable, mashing code and data from a variety of web services. Just recently, UK newspaper the Guardian created an API to give access to every article published since 1999.

To quote Feris again, “As technology develops, the scope of what can be remixed has developed alongside it.” Technology will continue to democratize barriers, and I can guarantee that it’s only a matter of time before every company is clamoring for a remix, rehash, or sample of their brand or content.

In short, will the API be the new “social media” wagon in 5 years? Will every brand’s webpage have a Creative Commons license? If history repeats itself, I’d emphatically agree.

FYI: MIA’s Paper Planes samples a song from the Clash.

At this realization, I was taken aback. In my eyes, unknowingly learning of MIA’s re-use undermined their credibility and originality. It’s as if I discovered Shakespeare sampled his ideas from a unknown playwright.

I embarked on a discovery of sampled music, finding quite a few mind-blowing gems:

• Stronger by Kanye West samples Harder, Better, Faster, Stronger by Daft Punk, which samples Coke Bottle Baby by Edwin Bird Song
• Apache by Sugar Hill Gang samples Apache by the Bongo Band, which samples 1960s song Apache by Jordan Lordan
• Big Pimpin by Jay-Z insanely samples 1950s Egyptian singer Abdel Halim Hafez’s Khosara
• Rockafeller Stank by Fatboy Slim samples Sliced Tomatoes by Just Brothers
• Hips Don’t Lie by Shakira samples Deja Vu by Lord Tariq

The enlightening journey revealed sampled music’s vibrant history and conflicting legality, reaching into the depths of copyright law and the birth of hip-hop. But the most interesting phenomenon is the emergence of “sampling” throughout the Internet, via remixing, mashing,  APIs, open source, machinama, etc. This trend, appropriately labeled Recombinant Culture by Faris Yakob, deserves a post in itself.

My initial research was out of curiosity, but I soon realized that the implications for brands and marketing are clear: the Internet supports “sampling” like no other medium, and it’s only a matter of time before sampling has its own Harvard Business School case study. Let’s start it off by reviewing the technicals: history and legality.

The History of Sampling: two ubiquitous breaks

In 1973, DJ Kool Herc worked dance parties in the Bronx. The dancers loved one specific “break,” or beat. Herc found two copies of the record, interchanging them to indefinitely extend the break into a “five-minute loop of fury.”

One of the breaks was from an album called “Bongo Rock” of the “The Incredible Bongo Band.” Herc looped an unknown song from Bongo Rock called a Apache (listen), which covered the original 1960s version of Apache from Jordan Landan.

Via the NY Times, “‘Bongo Rock is significant for being one of the musical cornerstones of rap. While it’s hard to measure these things accurately, it is certainly one of the most sampled LP’s in history, if not the most sampled.” Apache would soon be sampled by plenty of artists, such as Sugarhill Gang, LL Cool J, Nas, Moby, Fatboy Slim, The Roots, and Missy Elliot.

Five years earlier in 1969, The Winstons, a funk and soul group, recorded Amen, Brother (listen) on a B-side of one of their singles. In 1988, DJs isolated the drum solo (listen, click play button) and placed it on a breaks record called Ultimate Breaks and Beats in 1986. It became popular, and with Apache, it is also considered one of the most sampled beats of all-time. Check out a 20-minute documentary on the Amen Break’s influence. And here are some remixed versions of the break here, here, here, and here.

The Lawyers

As hip-hop evolved, sampling grew, with songs often leveraging multiple samples without obtaining legal permission. The lawyers appeared, however, once the music was lucrative to support legal action.

In 1991, The first court ruling against sampled music came. Alone Again by Biz Markie sampled Alone Again by Gilbert O’Sullivan, and there was no ambiguity about it (e.g., refer to Ice, Ice, Baby vs. Under Pressure). The judge declared that the sample was not fair use (the strongest defense for sampling) and infringed on copyright.

In aggregate, fees can now amount to over 50% of song revenue. Licensing fees have become so prevalent that the system supports “sample trolls.” These are companies that own commonly sampled beats, suing artists for royalty fees after the song is published without their permission. Due to lawsuit threats, most artists are forced to pay for permission.

Many artists claim that the fees royalties undermine their creativity. Via the artist Beck, “Now it’s prohibitively difficult and expensive to justify your one weird little horn blare that happens for half of a second one time in a song and makes you give away 70 percent of the song and $50,000. That’s where sampling has gone, and that’s why hip-hop sounds the way it does now.”

But with these legal set-backs, sampling, and its evolution, mash-ups and remixes, have never been more popular. Every form of remixing, mashing, and sampling has proliferated and found a home on the Internet.  In the next post, I’ll discuss the popularity of mashups like the Gray Album and Girl Talk, as well as the Creative Commons. And I promise it will end on a positive note.