4/10/13: RSW recap: Mobile ad sales, Triton Digital's POV, and international trends

Paul Maloney
April 10, 2013 - 1:40pm

The professionals on the RAIN Summit West "Profiting from Mobile" panel all agreed that mobile's ad sales outlook has, and continues to, significantly improve.

Even moderator Michael Theodore (Interactive Advertising Bureau VP) questioned whether the premise of "how do we fix mobile?" was correct. He said, "Those who feel mobile isn’t generating enough dollars are way too impatient." He illustrated his point by comparing the 2010 $1 billion mobile ad spend with television's $105 million in 1950. By 1952, TV's ad revenue had tripled, and Theodore is expecting the same for mobile when the 2012 numbers come out.

Pandora SVP/Ad sales Steven Kritzman quickly summed it up for his company: "Mobile is 65% of our revenue." What's more, mobile revenue growth has caught up to mobile listening growth, and is now outpacing it for the leading webcaster.

Clear Channel Media SVP/Local Digital Sales Michelle Savoy (left) said it's even time to ratchet up CPMs (ad rates). She credits an improved, richer, and more engaging mobile experience. Kritzman said much the same, saying mobile Pandora listeners tend to interact with the app much more than desktop users (for a station created by Pandora for an advertiser, for instance, Pandora sees 10 to 12 times the adoption on mobile). He's looking for the ad industry to improve its "engagement metrics" to better measure that interaction, and for marketers to improve ad creative.

If you're a webcaster or broadcaster, you absolutely need to have a mobile presence, stressed Abacast Director of Sales and Revenue Michael Dalfonzo. Already with 60-70% of his clients' listeners coming in via mobile, you need to get a branded mobile app, and to be available on the large aggregators (TuneIn, iHeartRadio). Oh, and build an alarm clock into it, so you can tune your listeners in the moment they wake up.

One key for the future he suggested will be the ability to target ad to individuals by the device they're using to listen. "you can reach them right when they're ready to make a purchase."

ESPN Audio Senior Director of Distribution & Business Strategy Patrick Polking said his company's main mobile challenge now is in distribution, that is, new partners and platforms to distribute ESPN content beyond SiriusXM, TuneIn, and Slacker. "Scale is going to be very valuable," he said.

Look for more recaps of the panels, presentations, and speeches from Sunday's RAIN Summit West.

Paul Maloney
April 10, 2013 - 1:40pm

RAIN Summit West organizers invited two of the industry's thought leaders to address attendees about where they see Internet radio going. Triton Digital Market Development president John Rosso went first on Sunday morning, and used his slot to familiarize the crowd with the concept behind his company's new a2x platform: programmatic audience buying for audio.

The problem Triton Digital's new solution addresses is: 12% of radio consumption now takes place online, but the segment gets just 3% of the ad revenue. Online radio needs to make a better case to digital marketers, who demand higher scale for most services, and digital "capabilities" like ad targeting (by listener, not content), better accountability, and third-party tracking.

The display, video, mobile, and social ad markets have already addressed this with programmatic audience buying: automated, rules-based inventory sales with real-time bidding. CPMs are rising and this year, he said, marketers will spend more than $4 billion in programmatic ad markets. Now, Rosso says, it's a solution for audio.

His company recently created a2x, a programmatic buying trading platform for audio. The new platform addresses the biggest deficits digital marketers see with current online audio campaigns. But it also benefits services with real branding campaigns (not remnant), price controls, and easily co-exists with direct sales efforts.

Look for more RAIN Summit West recaps in RAIN in the coming days.

Paul Maloney
April 10, 2013 - 1:40pm

RAIN Summits included the "International Trends in Online Audio" panel in Sunday's RAIN Summit West program because of the positive response to last fall's RAIN Summit Europe (as well as to serve as a preview for this year's Europe event).

Turns out, what these online radio professionals viewed as some of their biggest challenges mirror those in the U.S.: high content costs and complex regulations (royalties), those costs' drag on their companies' profitability, revenue beyond ads and subscriptions, and the prospect of an Apple entry into the space.

CEO of Berlin-based webcaster AUPEO!, Holger Weiss (pictured right), admitted licensing across borders is a steep challenge. He said it's a long, arduous process, yet his service is licensed in 40 countries, so it can be done.

Radionomy VP/Business Development Thierry Ascarez agreed there are "solutions out there, it can be done." His company provides a platform for hobbyist and smaller professional webcasters to create and stream their own online stations.

Saavn co-founder Paramdeep Singh (pictured left) described the especially difficult circumstances in India: "We have deals with over 900 record labels, as there's no one-stop for licensing in India. Labels and artists think we're hugely profitable, so they want lots of money."

So what about that money? How do these business leaders intend to increase revenues?

Radionomy's Ascarez described his company's advertising platform in which it splits ad revenues with those webcasters whose audiences surpass a minimum threshold (incentivizing good content).

"There are unique opportunities for monetization beyond ads and subscriptions," said Singh, whose Saavn service streams Bollywood and Tamil Cinema music. He says his company partners with carriers as a "use case" and a benefit to upgrading to a data plan (of India's 800 million mobile customers, only about 50 million have data plans).

"Who'll finance (these types of services) until the ad revenues make it profitable?," wondered Weiss. "It's not great and fantastic yet. We're not profitable yet. We have to think beyond pure advertising and subscription. Advertising is not the only way to make money. We'll see this in 2013," he said.

The AUPEO! CEO teased a Monday announcement about his company "working with" Panasonic, saying services could create new revenue streams by bundling the service with device makers, especially for the car. What we learned Monday is Panasonic has actually acquired AUPEO! for its in-dash audio entertainment platform.

Live365 CEO Hong Lau, experienced in business in China, illustrated the opportunities in that country. "It's not a lot different there than here," he said. He explained that phones are considerably cheaper, and there are hardly any significant online audio services there.

Moderator Ali Abhary (right), CEO of Spectrum Medya in Turkey, concluded by asking his panelists how they view a potential webcasting competitor in Apple.

Saavn's Singh said his company's specialized music libraries aren't easy for a new competitor to relicate. "It took us years to aggregate our content."

Weiss agreed. "You can win in a fight (with Apple), which can't copy you, but "can only buy you if you're niche."

We'll continue to recap the content from Sunday's RAIN Summit West in the coming days here in RAIN.