You’ve heard of peer-to-peer lending, but what about peer-to-peer marketing? The principle is simple enough — who better to lead sales of a product than its fans? — but it’s a particularly powerful idea for advertisers grappling with how to reach millennials as traditional television and print routes prove less effective.
Michael Julian, director of marketing at Made Event/SFX Entertainment, an events management company in New York, used to rely on “street” promoters to sell tickets to shows. For venues that held a few thousand people, this worked fine. He recruited college students to spread the word to their contacts and sell physical tickets in person in return for a small cut.
But when Mr Julian, 39, started running much bigger events and festivals such as Electric Zoo, an annual music festival over Labor Day weekend on Randall’s Island, New York, the system broke down. Having tens of thousands of tickets a day on the street became a liability as street promoters undercut one another to secure sales. It became impossible for Mr Julian to increase the price of tickets because he could never recall all the tickets on the street to change their face value. “It wasn’t working,” he says. “We completely stopped using our street guys.”
Then Mr Julian heard of Streetteam, a London-based start-up founded by brothers Callum and Liam Negus-Fancey in 2014, and its peer-to-peer sales software, which allows brands and promoters to build and manage a temporary team of young “ambassadors” who sell their wares.
Streetteam ambassadors are not paid a wage. Instead, they receive tiered rewards depending on their sales performance, from free tickets to VIP access to meeting a star to extravagant experiences, such as a speedboat taxi to Bestival when it was hosted on the Isle of Wight.
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The company has helped to sell more than 500,000 tickets for events in 14 countries. It usually begins by handling between 5 per cent and 8 per cent of an event’s total attendance. This is scaled up as the ambassadors, usually aged between 16 and 25, learn of the perks on offer and sign up. The start-up takes a fee from the marketing budget for the event, rather than charging commission on ticket sales, although it has yet to turn a profit.
Callum Negus-Fancey, now 28, got the idea for Streetteam a decade ago after he left school to put on dance events for 16-year-olds under the name. He sold the tickets entirely by word-of-mouth. “We would drive around to meet people who wanted them. It was fun.” From the start Streetteam rewarded sellers with perks rather than paying them commission, appealing to the millennial malaise of “fomo”, or fear of missing out. Some might say there is a risk that young people are being exploited, since they are paid in rewards rather than with a traditional salary, but Mr Negus-Fancey argues that his company does not trade on people working for free. “The fair value exchange is really important to me. A lot of these guys are passion-driven, but they have got motivations and they want to feel that the brand is treating them right.
“If kids are going around saying ‘Buy a ticket off me, I’m saving for a laptop’, it’s not as genuine as ‘Buy a ticket off me, I really want to go and experience it with you’.”
These days, ambassadors are given advice on how to make sales and can monitor their rewards online. They send buyers a link to pay for tickets, allowing events managers to control ticket inventory and pricing.
Through Streetteam, Mr Julian started using street promoters again. “I was a little sceptical, because usually mixing street guys and technology doesn’t work too well — this is why they are street guys — but I was very surprised to learn that they liked it. Their risk went down and they didn’t have to spend time driving around and meeting new customers.”
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Mr Negus-Fancey is in Los Angeles, where he is leading the American expansion of Streetteam after a $10 million funding round last year that attracted some of the biggest names in marketing and music, including Saatchi Invest and Universal Music Group. The company is expanding into other types of live entertainment, too, such as sport, and plans to enter sectors from travel to cosmetics.
Its co-founder says that several behavioural trends have made this rapid growth possible, from the struggle of print and television advertising to reach young people to the power of influencers on social media. People, he says, are turning away from corporate messages but trust products sold to them by their peers. It’s a message that increasingly is getting through from the street to the boardroom.
The ambassador
Jack Fossey, 22, is a welfare officer at Swansea University. He became a Streetteam ambassador for Bestival four years ago after buying a paper ticket from a friend who told him that she would be able to go for free if she sold eight tickets. The following year, he sold 63 tickets to Bestival.
“It was a bit of a fluke, I just wanted to go for free,” Mr Fossey says. “I managed to get the top prize, a speedboat transfer to the festival for me and six mates. I felt like the Queen going over.”
Mr Fossey says that he loves the festival and wants to share it with others. “I’m selling the experience and getting people to come along with me. It’s never felt like doing someone’s work because there is respect both ways.”