How music streaming platforms are trying to up ad dollars

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Updated: January 13, 2020 7:24:24 AM

From Gaana to Spotify, streaming platforms are rolling out newer ad formats

Among the many factors deterring advertisers to join the audio OTT bandwagon is its inefficacy to attract the undivided attention of the listener who is mostly consuming music in the background.Among the many factors deterring advertisers to join the audio OTT bandwagon is its inefficacy to attract the undivided attention of the listener who is mostly consuming music in the background.

On last count, India had over 15 audio music streaming platforms. According to a Deloitte study, the digital audio music market has around 150 million subscribers in India. In comparison, the online video audience in India is expected to grow to 500 million by the end of 2020. The audio OTT market today is worth only `270 crore, and is at the stage that digital video advertising was about 10 years ago.

Among the many factors deterring advertisers to join the audio OTT bandwagon is its inefficacy to attract the undivided attention of the listener who is mostly consuming music in the background.

What marketers want
Moksh Chopra, CMO, KFC India, says the relative lack of “greater immersive screen space for visuals” is perceived as one of the drawbacks of advertising on audio OTT platforms. Visual ad formats are what marketers have come to prefer over time. “The platforms have static but small banners that don’t allow for much visual cue. Wherever a food brand requires a visual cue to communicate its product, audio OTT becomes a challenge,” he adds.

These platforms also score low on deeply personalised and targeted advertising. “Audio OTT is smart: it lets brands target fitness enthusiasts through music playlists that are curated for exercising or running. However, as we cannot drop cookies, it is not possible to advertise a specific brand to a user who was looking for it online. Sequential targeting, too, is not possible,” points out Shrenik Gandhi, co-founder and CEO, White Rivers Media.

Pure-play audio ads that are played in the background need a high frequency, much like on the radio platform, to reach customers. Hence, advertisers choose to bombard listeners with their advertising in a bid to make an impression. “Most clients prefer a frequency of about three to five impressions per user,” says Prashan Agarwal, CEO, Gaana.

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Audio OTT ads are usually 15-20 seconds long; and a user may listen to two minutes of ads per hour of streaming. A brand, typically, could spend around `4 lakh on an audio OTT platform to buy approximately nine lakh spots across a five-day period. Chopra says that often marketers attempt audio OTT as an experiment to understand the additional reach and the audience profile fit.

Format innovation
The belief is that audio advertising is mainly a brand building medium, and can do little to push a user to make a purchase. Arjun Kolady, head of sales, Spotify India, attributes this status of audio OTT advertising to consumer behaviour. “A person listening to music or podcasts while driving, running or cooking is not going to suddenly stop what they are doing to click on your ad; whereas someone who is listening at work or during a commute may have a higher tendency to do so.”
Music streaming apps are now developing video ad inventory at the risk of annoying users — and deviating from their non-intrusive nature — to ensure that listeners are not drowning out ads served to them.

Other than the audio ad format, Spotify and Gaana give advertisers the option to choose from display and video ad formats. For instance, Spotify’s video takeover ad format lets brands play an ad accompanied by a clickable display unit that redirects to the brand’s website. Spotify also rewards users with 30 minutes of ad-free listening if they watch a video ad.

Meanwhile, Gaana and Spotify have interactive audio ad formats to address the challenge of audio ads not being able to deliver a click to reach a destination. The format allows the listener to give a voice command in response to an audio ad.

With these attempts at performance marketing — that could enable advertisers to measure conversion and click-through rates — audio OTT platforms hope to win over brands.

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