CD Dangles Carats

The new single from rap group G-Unit is called “Stunt 101.” But the stunt being watched most closely by industry marketers is how Interscope Records is selling the music.

The company is about to launch an ad campaign that will turn the forthcoming release into a kind of lottery, a la “Willy Wonka & the Chocolate Factory.” The Vivendi Universal-owned label is hiding “golden tickets” in four of the first 500,000 copies of the album, which features rap star 50 Cent and hits stores Nov. 18. Consumers who buy the CD containing a ticket get a diamond-laden G-Unit medallion valued at $12,500.

The promotion represents the latest gambit by major record companies to appeal directly to consumers, rather than route marketing dollars through retailers and radio stations. Amid rampant Internet piracy, the goal is to interest fans not just in the music but in the actual CD.

“With the amount of different choices that a kid has in his life every day to be entertained now, we have to add this kind of level of excitement to help make the music stand out,” said Steve Berman, Interscope’s head of sales and marketing. “Can we create a new level of excitement to drive people in to buy the music?”

Across the industry, labels have been bundling new albums with bonus DVDs and other come-ons from top artists -- a trend expected to accelerate during the holiday shopping rush.

In a similar move, Time Warner Inc. unit Elektra Entertainment is releasing its new album from rapper Fabolous with software that enables buyers to create custom mixes of the CD’s songs. Time Warner’s Atlantic Records, meanwhile, plans next month to bundle a music- related PlayStation 2 video game with its new P.O.D. album.

Smaller labels, including Matador, have tried “golden ticket” campaigns of their own this year. Interscope tested the idea last month with the release of rapper Obie Trice’s album “Cheers.” The company offered three chances for buyers to spend a day in the recording studio with Eminem. “Cheers” has sold an estimated 438,000 copies since then.

Rivals said the promotion for the G-Unit album, “Beg for Mercy,” could stoke at least a short-term boost.

“The nub of all this is how do we reach the consumer, and how do we get them excited about a product they can get for free” on the Internet, said Tom Corson, executive vice president for worldwide marketing at Bertelsmann’s J Records, home to such acts as Alicia Keys and Maroon 5. The lottery, he said, “should certainly drive an urgency for the consumer to go to retailers and buy that record.”

Interscope’s G-Unit campaign is expected to be backed by ads in major hip-hop magazines and an estimated $750,000 television ad blitz -- about twice the size of the TV buy for a typical new rap album, sources said.

Such sums are dwarfed by the typical film ad campaign. But the shift shows how Interscope and other labels in the Vivendi-owned Universal Music Group are rethinking their tactics. Insiders estimate that the company will spend an extra $70 million on so-called direct advertising in the next year -- roughly tripling what it spent in the past -- if the strategy remains in place.

The shift follows Universal’s decision to end payments to retailers it once paid to guarantee prominent display on their shelves. Universal executives said last month that they expected to siphon most of the savings to their own TV, radio and print ads.

The company also has slashed CD prices 25% to breathe new life into the U.S. music market, which has fallen about 7% this year. The company recently began a separate advertising campaign that trumpets the price cuts on TV and in college and alternative newspapers.

“Right now there’s a great deal of experimentation to see what will drive the consumer back to the store,” said Lew Garrett, president of purchasing for retail chain Musicland. “Not all of these things are going to work, but at least they’re trying.”