Australian Service Guvera Gets $20 Million, Sets Sites on US

Australian music service Guvera burst on the digital music news scene this week with an announcment that it has raised $20 Million in investor funds. This, following $10 Million they got in 2009.

The service is not yet available in the US, but they expect to open up to beta testers in the next month or two here in the US. It offers free streaming or downloads.

In addition to lots of funds, and the most curious name I’ve heard for an online music service, Guvera has a unique revenue model. Something that, to my knowledge, has not been tried thusfar.

Guvera will sell channels to advertisers, who will sponsor channels with content that gets selected by the brands (or the agencies representing them) based on “personality”; there’s an assessment tool companies can use to determine which artists or specific songs fit their brands and target audiences best. (The actual songs are not chosen by the advertiser, but are tagged for use reaching certain target customer criteria.) Advertisers can add other criteria such as location and then set a price they are willing to pay per listener on their channels. The revenue generated is shared between Guvera and the music labels (of course). Techcrunch reports that advertisers include McDonalds, Johnson and Johnson, and Harley Davidson.

Guvera plans to do deals with all the record labels as well as movie studies and television networks, and offer all the content using the same ad-sponsored channel delivery model. They just announced a deal with Universal Music Group. David Ring, executive vice president of business development & business affairs at Universal Music Group’s eLabs, said the hope is that Guvera will attract people who simply won’t pay for music online. “What I think is incumbent on us in the new world that we’re living in is to make sure we try to segment the market,” and have something to offer the segment that’s getting its music free — and illegally — online,”

In a recent interview, Guvera CEO Claes Loberg explained that this ad model is not about cost per click or cost per thousand impressions, instead it’s about the cost of engaging a target customer. He says the service is an engagement tool for advertisers.

Engagement is the elusive goal of most advertiser’s campaigns. CPMs and CPCs are definitely inadequate standards for measuring engagement and the idea of putting the focus more on buying a customer’s attention is a good one. The challenge will be in teaching the old dogs new tricks – agency media folks like their metrics just-the-way-they-are-thank-you. Nonetheless, letting advertisers participate in selecting and pricing their audience? I’m definitely intrigued…

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