Latest research released by Juniper Research projects that annual global advertising spend on mobile devices is expected to reach $105 billion by 2019, up from an estimated $51 billion this year. Advertisers, drawn to the personalized and timely targetability that advertising on mobile devices offers, will drive spending on those devices to 44 per cent of total digital ad spend by 2019.
As a mobile medium, streaming audio should be poised and ready to take its share of that spend. Maybe, just maybe it’s time for the streaming audio industry to reinvent itself as mobile advertising enhanced with audio.
In February of this year Webcast Metrics said that 73% of listening to streaming audio platforms measured by the service is done on mobile devices. Up from 66% a few months before, and still climbing. With three-quarters of its audience on mobile devices, streaming audio certainly is a mobile platform.
Streaming audio advertising is at its best on mobile devices. Compared to mobile ads restricted to visual displays, streaming audio is a perfect medium, overcoming viewability issues with the addition of an audio element. New technologies enable geo-targeting, and audio interactivity that enables listeners to respond easily. What’s more, listening to music is a favorite smartphone activity, making it an enhanced branding environment for brand messaging.
There are good reasons for streaming audio services to position themselves to the advertising community as a superior mobile advertising platform. The demand for mobile inventory is great, and mobile audio ad units are appealing and effective. Mobile budgets are in place and growing. It’s a strategic shift that’s worth considering..
In case you’ve been living in a cave and have missed it, it’s Advertising Week in New York this week. Yesterday I attended a panel, sponsored by XAPP Media, that featured a discussion of online audio ad campaigns. XAPP Media is a technology company that enables interactive audio ads, and the panel began with CEO Pat Higbie showing the audience how it works.
XAPP’s product is designed to enable today’s ultramobile consumers to respond to audio ads while they are listening to their devices in hands-free, eyes-free mode. These audio consumers are busy – driving, walking, exercising, etc, – and audio ads are a great way to reach them, but getting them to respond to the ads can be a challenge. Enter XAPP technology that makes it possible for them to respond with a voice command. The ad plays, and the consumer can immediately respond by saying “Call now” or “Email me.”
NPR’s Bryan Moffett, VP, Digital Strategy and Ad Ops, spoke enthusiastically about their experience with XAPP’s technology. “It’s the most exciting thing we’ve put in front of marketers since the ipad,” he said. Moffett went on to discuss several campaigns that have used the platform with success, as well as ways that they are using the voice driven interactive feature within content, enabling listeners to launch a new program.
Spotify is doing some initial beta testing of XAPP as well, and VP Brian Benedik mentioned interesting results, without getting very specific with details. Spotify’s mobile listening has increased sharply in the ten months since they stripped the subscription required feature from their mobile app, with half of Spotify’s listening now on mobile devices in the US. Meanwhile, in Latin America Spotify’s mobile audience is 80% of all listening, according to Benedik.
All of the panelists talked about the push to offer innovative opportunities to advertisers. Ad Large Founder Cathy Csukas said there is a thriving marketplace of audio advertisers and they are looking for ways to do digital. She mentioned the importance of lifting advertisers up through programs to generate recall and response.
It was great to see an online audio conversation, talking extensively about execution of campaigns, take the stage during Advertising Week. While it would have been great to have a few more specifics on advertisers and results, the conversation was informative and the explanation of the XAPP platform was very good. A few questions from the audience indicated there were advertisers in the room who found it interesting as well. All good things..
In May Entercom, one of the largest broadcasters in the US, launched a new division called SmartReach Digital. The launch came initially to six of Entercom’s markets, with more to follow. SmartReach Digital is a full-service digital agency formed by Entercom, staffed with a team of experienced digital marketers. Dedicated sales reps will drive business in each Entercom market.
The idea is new and innovative to radio, but one that has taken hold with newspapers, tv, and other locally driven media outlets. Local market knowledge and resources are valuable and can be used to sell more than one media -that’s the thinking behind this strategy. With relationships with local businesses already established, sellers become trained marketing consultants, prepared to work with those SMBs to develop a digital strategy that grows business and drives revenue. Website design, search engine optimization, email marketing, mobile platforms, social media, text marketing, online reputation management, display advertising, and of course, Internet radio advertising – these are all marketing options that might be recommended. The online platforms that sell these products offer white labeled versions that enable an agent like Entercom’s SmartReach Digital to brand and execute the campaigns, perform billing, and manage the relationships directly with their local customers.
Want to know more? We’ll be examining this new and innovative approach to growing revenue and optimizing local direct sales teams at RAIN Summit Indy on Tuesday September 9th, during the NAB/RAB Radio Show week. Christine Merritt, Google’s Head of SMB partnerships and channel sales, North America, and George Leith, VP Sales, Vendasta, are two speakers who will join a panel discussion on options for turning local sales teams into digital marketing consultants. It’s a deep and lucrative opportunity, and one you’ll want to take note of.
Yesterday Amazon announced a new feature that allows Twitter users to add something to their Amazon shopping cart by replying to a tweet with the hashtag #amazoncart. After connecting their Twitter and Amazon accounts, they can reply to a tweet for a product that has an amazon link and the product will be placed into their shopping cart for purchase. Later, they can visit their shopping cart and complete the sale.
“Add it now, buy it later” is the slogan used in the promo video by Amazon.
This is a pretty innovative strategy on the part of Amazon. Think about it — it encourages everyone who is selling anything to create a link for that product in Amazon and tweet about it. What’s more, if you actually take a little more sophisticated approach, you create your own little Amazon store, tweet the links to products in there, and enjoy some revenue sharing on the deal.
Amazon has more than 200 million registered users, all with credit cards associated with them. They have one of the easiest shopping cart platforms, with their proprietary 1-click purchasing. And they sell just about everything.
With their new “add it now, buy it later” promotion, consumers can easily react to a product they see tweeted, place it in their shopping cart, and purchase immediately or later. Either way, Amazon has placed itself in the middle of the transaction, making it easier for both the buyer and seller.
There are simply tons of ways that this can be used to make advertising more effective. For example, stations with a strong Twitter following can put their Twitter feeds to work. With advertiser permission, stations can tweet product links and run a coordinated ad campaign on their station and Twitter, extending the reach and impact of the ad campaign – and the bond with the advertiser. (Of course, this is for brand and product campaigns, not brick and mortar campaigns.)
Exciting possibilities exist with both iTunes and Amazon, who have so many registered users’ credit cards and make it so easy to buy. Now Amazon has figured out a great way to make it easy and attractive for everyone to want to use their platform to conduct business, and to encourage anyone with a Twitter following to promote Amazon links.
There’s buzz and activity around podcasting these days. Podcasting isn’t new, but I think it’s become reinvigorated of late with a few players moving things forward. Organized access to content that makes it easier for listeners and producers to connect and easier for advertisers to purchase and track ads, is the force behind this new momentum.
A key company in the space is Podcast One, owned by Norm Pattiz. Founder of Westwood One, Pattiz has the know-how to build a content network, and he’s now applying that skill, and his relationships with celebs, to build a network of podcasts. Launchpad Digital Media is a sister company that sells ads for the network. According to a recent article in Bloomberg News, Podcast One hosts 200 shows in its network and averages 100 million downloads a month.
There are other players in the space as well — Earwolf is a comedy network that also offers producers the tools they need to connect with advertisers through sister company The Midroll. WNYC in New York offers a substantial suite of downloadable audio including Freakonomics hosted by author Stephen Dubner, Radiolab, and Here’s the Thing with Alec Baldwin. Stitcher’s been around for a few years, organizing access to content and offering a mobile app that has been downloaded 12 million times, and is integrated with several car manufacturers and both IOS and Android phones.
Meanwhile, the elephant in the room when it comes to podcast networks is iTunes, which offers a huge library of downloadable audio but no monetization opportunities for the producers. Which creates a nice opportunity for the other companies who are willing to figure out the measurement and monetization piece.
We’ll be discussing that aspect of podcasting, and a lot more at RAIN Summit NYC on February 5th in New York City on a panel called “The Download on Podcasts.”
The all new RAIN News site has launched, and I’m sure you will want to check it out and then use your social media tools to tell your friends about it. There’s a new url, a new site, and a lot more content there which will be updated throughout the day.
With more than 200 million registered users, Pandora’s collection of user data is substantial. Now they are beginning to use that data to create marketable audience segments that advertisers can use to target their campaigns.
The first of these “proprietary audience segments” created by Pandora are Hispanic and Spanish speaking users of the service. To create these segments, Pandora cross referenced their registered users with zip codes that have a high population of Hispanic and Spanish speaking listeners, using publicly available census data. It’s still inference based targeting, meaning that the buyer has to agree to make assumptions about the consumer based on where they live, but it’s an improvement over cookie-based technology, which makes inference based assumptions as well – usually assuming that someone visiting a certain site matches a certain set of established criteria.
Critics will argue that users often give false registration data as well, and that is certainly a factor, but probably not a significant deterrent for buyers who are looking for any improved ways of reaching more of the people they want to reach, fewer of those they don’t.
Studies have shown that listeners are quite tolerant of targeted ads online, especially when they are targeted to offer products that the listener might find useful.
In fact, Pandora’s capable of slicing up their audience by market, zip code, age or gender, or the kind of music they listen to, and has been doing that for a long time. These new customer segments are available in media buying software that makes it very simple for agencies to identify, price and purchase. It’s a smart way to market their large audience to advertisers and showcase their targeting capabilities. This video features Heidi Browning, Pandora SVP of strategic solutions, discussing the streaming service’s targeting capabilities.
Programmatic buying will capture nearly 20% of the display ad spend this year, according to eMarketer, and that’s a number that is growing more quickly than anticipated. In general, display advertising is growing more quickly, thanks to increased demand for mobile ads. Advertisers are becoming more adept at using real time buying systems, attracted to the cost effectiveness and increased targeting capabilities. Meanwhile, as mobile usage continues to expand, publishers are releasing more inventory to the programmatic buying platforms. More buyers, more inventory, more revenue.
Meanwhile Triton Digital continues to announce enhancements to their programmatic exchange for streaming audio advertising, a2x. They recently announced a partnership with Lotame to integrate its unifying data management platform (DMP) into a2x, enabling a2x publishers such as Entercom, CBS, and Univision to to collect, understand and activate audience data from any source, including online, offline and mobile.
Essentially, Triton’s a2x platform is enabling publishers to transform their largely unidentifyable inventory into units that can be targeted and sold as targetable inventory in a real time buying platform. As advertisers and their agencies become more and more interested in platforms that offer greater flexibility in targeting and real time pricing, publishers are wise to have these options in their arsenal. However, as AdAge was quick to note in this article, it’s also smart business to compliment this selling strategy with one that offers custom and sponsored ads that net a higher rate.
Last week CBS Radio introduced Audio Ad Center, a self-serve platform that enables small businesses to promote and target their products and services to their online and mobile radio listeners with customized messaging and creative copy. Small business owners can visit the website to purchase ads to run on any of the online CBS Radio stations. “Streaming audio is a very effective form of advertising and does not have to be limited to the companies with the biggest budgets,” CBS Local Media president Ezra Kucharz added. “With AUDIO ADCENTER, business owners can align themselves with the most trusted radio brands with millions of listeners between them to choose from.”
Innovative online platforms that enable advertisers to easily purchase, track and manage their ad inventory. These are the components that will drive more revenue to streaming audio platforms…
Amid all the iTunes Radio hype in September came an announcement from Songza that they have secured $4.7 million in funding. Among the investors was Amazon.com, which bought Amie Street, founded by Songza founder Elias Roman, in 2010.
Songza’s not the biggest streaming service, but they’ve been quietly innovative in the past few years, catching my attention a few times. Eric Davich, the other co-founder of Songza, recently joined the Streaming Music Trends panel at RAIN Summit Orlando and turned out to be a great addition, smart and spunky, with plenty of opinions.
Songza will use the new funding to develop its native advertising solution. “With this funding, we’re scaling our native advertising solution to make brand-to-customer interactions more engaging for customers and more successful for brands,” said Elias Roman, co-founder and CEO of Songza.
Songza’s approach to streaming music is to offer music based not on genre or artist, but on activity or mood instead. Going for a run, getting ready for a date, having a party, Songza’s got options for all of those and a lot more. The plan is to develop high impact 7 second ads that work well for both listeners and advertisers within the context of the programming.
Recent info says that Songza has 4.8 million active users. They have 24 million songs in their database, as well as a slick interface and a unique approach. And they’re concentrating on monetizing their audience in a way that benefits advertisers and listeners. All that makes Songza one to keep an eye on. For more, check out an interview that co-founder Elias Roman did on CNBC not too long ago..
Pandora hosted a 2Q earnings call last week, giving investors news of increased listening and revenues, and continued disappointing profits. The highlight of the call was the news that mobile ad revenues are up 92% over last year, with Pandora now claiming to be the third largest generator of mobile ad revenues in the US, behind Google and Facebook.
Other big news included the fact that just months after a move to cap listening at 40 hours per month, Pandora is removing that cap. No doubt, this decision has to do with the impact that move had – Pandora’s numbers dipped about 10% this spring after the cap was instituted, and at least one competitor, Slacker, saw simultaneous growth. Meanwhile, it did appear that the cap spurred subscription sales as well – although whether those subscribers will stick now that the cap is lifted remains to be seen. Non-GAAP subscription and other revenue was $33.5 million for the quarter, a 153% year-over-year increase, including $4.7 million in revenue relating to our subscription return reserve which has to be held separately since they collect the fees upfront, but subscribers may cancel for a refund.
Advertising revenue was $128.5 million, a 44% year-over-year increase for the quarter.
Pandora also announced that they will for the first time be running back to back ads in listener’s streams, increasing the potential number of ads a listener can hear from about 4 per hour to 5. Since these are mainly 30 second ads, the ad minutes may climb to 3 minutes per hour.
My take on the listener hour cap and commercial units per hour tweaking is that Pandora is growing up and turning its attention more to profitability. They’re demonstrating a willingness to try different things in their attempt to make money per listener. The fact that they are connected to identified listeners gives them the ability to watch their tweaks closely, and they are obviously not afraid to change course if they don’t like what they see. And since they are a public company, these are experiments that the entire industry can watch and learn from..
Are you coming to RAIN Summit Orlando on Tuesday September 17th? Join attendees and speakers from Pandora, Slacker, iHeartRadio, TuneIn, Spotify, Univision, Greater Media and so many more for a great conference with excellent panels and networking. Click here to register, and use the code Audio4cast to save a bit.
- Pandora Shows That A Media Business Can Grow Around Mobile Ads (businessinsider.com)
- Pandora scraps 40-hour mobile limit ahead of iTunes Radio launch (digitaltrends.com)
Digital revenue is the bright spot for radio according to the newest revenue data out late last Friday from the Radio Advertising Bureau. Digital revenues grew 16% over last year’s second quarter and are up 13% for the year. Serious attrition continues for network dollars which are down 4% for 2Q and the year. Digital is now poised to overtake network’s share of radio’s revenue pie.
The big elephant in the room is spot radio, which was only flat for the quarter but is still off 1% for the year. Of course this is not a good trend in the face of a modestly recovering economy. Ad revenues continue to shift to online and mobile media, as evidenced by the growth of radio’s digital revenues.
In a move that is likely a reaction to news like this, Clear Channel, which owns Katz Radio, the sales firm that controls the lion’s share of national spot revenues, has just signed on with IPG, one of the largest ad agencies, to build an automatic buying platform for radio inventory. According to Mediapost, “The initiative, which was developed by Interpublic’s Mediabrands unit, is dubbed the Magna Consortium, and is part of the agency holding company’s mission to automate 50% of its media-buying by 2016.”