The frontier of targeted ads in streaming music

Friday, December 6, 2013 - 12:35pm

Streaming music is gaining popularity fast, but lags behind the web in understanding its users.

Internet content sites can tag, track, and categorize people as they move about the web, creating deep and accurate user profiles that follow most of us as we move among digital properties. Combined with programmatic ad buying, it means that when a user visits a certain website for the first time, that site can display an ad that is more-or-less precisely relevant to that user. Advertisers pay more for effective targeting.

Dedicated music apps like Pandora or Spotify exist as islands, separated from broader engagement with the oceanic Internet. They are years behind the web in understanding their users. Two advances have sparked what promises to be an intensely developed intelligence layer that can understand, profile, and target the users of streaming music services.

First, Pandora announced audience segmentation based on user-registration information. (RAIN coverage here.) The first segments released by Pandora to advertisers are Hispanic users and Spanish-speaking users. More segments are doubtless forthcoming as Pandora develops and refines its testing and predicting methods.

Second, and more recent, The Echo Nest released its Music Audience Understanding platform, which leverages that company’s immense data intelligence about music choices to better profile online music users. (TargetSpot, a leading digital audio advertising network, was the launch partner and first client.) The premise of The Echo Nest’s development is that a proper analysis of music preferences can predict non-music attributes of a person and cohorts of people.

Does it work?

“The Echo Nest’s technology delivers predictions that are at least as accurate as registration data, or more so,” said Mitch Kline, CEO of TargetSpot. “Some advertisers think registration data is gospel, but we believe The Echo Nest’s technology is more accurate.”

It is certainly more ambitious than Pandora’s first venture into segmenting. The Echo Nest has released 20 audience segments that cover demographic categories (age, gender) and lifestyle inclinations (automotive, parenting, etc.). That starts to get very interesting to advertisers.

“It is increasingly important,” Kline affirmed. “Our clients are trying to get more and more targeted. Dumb inventory doesn’t do anything for them anymore. People are now looking for advanced targeting. Automobile manufacturers want to target auto intenders. Or, an insurance company wants to target people who are in the car market because they will need auto insurance. In digital audio, this is fairly new." 

Can music taste really predict whether someone likes cars, or is a parent? We put that question to Jim Lucchese, CEO of The Echo Nest, and he described elaborate methods of testing against the “ground truth” of music-service users, gleaned from multiple sources. Correlating music choices against populations that live in a certain “ground truth” segment (like auto enthusiasts or parents), results in a prediction reliability score.

“That’s part of what took us so long getting to this point. The segments that we’ve released are ones where we’re confident that the results are predictable enough, and reliable enough, to take to market. There were a number of things that weren’t successful. Music can’t predict everything about a person.” 

Big Data and privacy

Though it might seem that the inference level is high when connecting music choices to lifestyle interests, that’s what “Moneyball” and Big Data are all about, and why there is such promise that analytics can illuminate previously unknown connections between all sorts of things.

Lucchese told us that the Music Audience Understanding platform was in pre-release development for two years, and that the launch timing, close on the heels of Pandora’s audience-targeting system, was coincidental, and probably favorable to both companies.

“[The timing] was awesome! The internal conversation we had was, ‘OK, cool, there’s going to be market discussion about this.’ Prior to that, you didn’t read much about it. [Our] timing was set well in advance -- we needed to have an initial customer lined up; we needed to have a product ready. We saw the Pandora announcement as we were preparing our own announcement. I saw that as a huge plus, educating the market around music as a powerful predictor of people and applying a level of data vocabulary around streaming music.”

Interestingly, Lucchese also noted, “I don’t view Pandora as a competitor; I view it as a prospective customer. Pandora is one of the most forward-thinking companies in the space.” (Pandora does not use The Echo Nest’s music intelligence platform, which is utilized by over 400 other music services.)

All of this makes privacy advocates uncomfortable. Lucchese hit that issue head-on: “We really wanted to make sure anything we were doing was not only compliant from a privacy standpoint, but better the current state of the market. [Our system] is not only non-personally identifiable, we’re not even tracking users. Because we can look at anonymous clusters of listeners, and make predictions based on those clusters, we’re not tracking people around the Internet or dropping cookies.”

Mitch Kline expresses the natural enthusiasm of a launch partner, while looking beyond the first-mover advantage: “We believe in The Echo Nest and this technology. We’re the first ones to dive into this space, and we think others will dive into it also. Then we’ll have to think of other ways of targeting!”

TargetSpot, SiriusXM name new CEOs; HuffPo exec joins CCE digital team

Tuesday, April 30, 2013 - 11:50am

TargetSpot's Eyal Goldwerger (pictured) has stepped down as CEO as part of what's being called a "planned reorganization." He will continue to advise the company's board, and he remains a shareholder.

TargetSpot is the largest online audio sales network. Goldwerger delivered a "POV" address at RAIN Summit West earlier this month in Las Vegas (coverage of his speech, and audio, is in RAIN here). Goldwerger joined TargetSpot as CEO in 2009. CRO Mitch Kline and CTO Leigh Newsome will serve as "co-CEOs" to replace him.

News also broke this morning that satellite broadcaster SiriusXM Radio has named interim CEO James Meyer as Mel Karmazin's fulltime replacement as CEO, effective immediately.

Finally, Clear Channel Media and Entertainment has brought on former Huffington Post executive Brian Kaminsky as EVP of operations for the digital division.

RAIN Summit recap: TargetSpot examines Hispanic and African American Net radio listeners

Thursday, April 25, 2013 - 11:35am

TargetSpot CEO Eyal Goldwerger encouraged RAIN Summit West attendees to look to multicultural audiences for marketing opportunities. Goldwerger delivered one of the day's two "POV" addresses, extolling the likely benefits of marketing to Hispanic and African American audiences via Internet radio.

Earlier this week we covered news of a study from The Media Audit (here) which focused on Internet radio adoption in the Hispanic audience segment.

The TargetSpot research revealed that while mobile device adoption in these segments is similar to that of the general U.S. population, African American Net radio listeners are even more prone to listen on mobile devices. Calling it an "early adopter market," Goldwerger revealed African Americans respondents were almost twice as likely to own an in-car Internet radio device as the general population (26% to 14%), and that African Americans' listening on all mobile devices topped the general index (see screenshot).

Goldwerger called multicultural listeners' social engagement -- both while listening, and engagement with services themselves -- "one of the biggest upsides of this market segment." In the study, 70% of Hispanic listeners reported being on a social media site while listening to Internet radio, topping the level for the general population (60%). African American listeners' engagement wasn't quite as high, yet still topped overall levels. Both market segments surpassed overall population numbers in other social media behvavior like "link Internet radio profile to social network," "share a station, band, or artist," and "look at what others are listening to."

The study also examined these populations propensity to shop online (and how that relates their listening habits), their recall/response rate to online radio ads, and specfics that make these segments "extremely attractive demos" for online advertisers.

You can listen to Goldwerger's entire presentation from RAIN Summit West here. All of the audio from the Las Vegas event is available on this website (look in the right-hand margin of

Here's what else is happening in Internet radio

Thursday, April 11, 2013 - 6:00am

We've been doing a lot of RAIN Summit West review lately (here and here, with more to come!), so we wanted to take a minute and pass along some other news that's out there. Some is from the NAB Show, some unrelated, but we hope you find it useful and interesting.

NAB's Smith urges embrace of "hybrid radio": NAB CEO Gordon Smith (right), in his "State of the Industry" address at the NAB Show Monday, urged broadcasters to find ways of providing content across platforms.

He described "radios in smartphones" as a "hybrid-radio" system combining on-air content with interactive enhancements. He also acknowledged broadcast radio's upcoming battle to maintain its dominance in the car dashboard. Billboard's coverage gave no indication of any mention of Internet radio or streaming. Read more in here.

Aha Radio inks CBS News deal, launches Publisher Portal: Aha Radio by Harman announced Monday its partnership with CBS Radio News, bringing audio of the broadcaster's top news programs to Aha Radio listeners. Aha also launched its "Publisher Portal" by which anyone (following an approval process) can make content available on the Aha Radio system. There's more in here.

TargetSpot to deliver in-stream ads for Microsoft's Xbox Music Service: Online audio ad network TargetSpot announced it will deliver in-stream audio ads for the free version of the Xbox Music service (pictured) on the gaming console and Windows devices.

Former Triton exec Freund lands at Clip Interactive: Former EVP/Triton Media Group Bill Freund joins technology company Clip Interactive as VP/Chief Revenue Officer in preparation for a 2014 national rollout of the service which will allow mobile listeners to interact with broadcast radio content.

Global shipments of PCs fell 14% in first quarter: ZDNet calls that the worst drop in a generation, the steepest decline since 1994. The IDC (International Data Corporation) points to a number of factors -- like mobile, but also "a weak reception for Windows 8." Read more in ZDNet here.

Jelli says data shows increased social engagement helps ratings: Jelli has released data it says reveals a direct correlation between increased "social engagement" by broadcasters with listeners and increased listening (as reflected by ratings). The company measured weekly active registered users who were using its online or mobile app to vote to choose the music played during live broadcasts. It found as weekly social engagement rose 127%, weekly cume went up 30%.

Jelli says its data also shows these socially-engaged listeners engage with advertising more.

Net radio streaming service SurferNETWORK awarded patent: SurferNETWORK, a streaming vendor, was awarded its fifth "Buffering Patent" for technology that enables content streams "to start immediately," instead of waiting for playback while a cache of data loads.

We hope to see you Sunday in Vegas for RAIN Summit West!

Friday, April 5, 2013 - 11:50pm

We hope you've planned to join us this Sunday for RAIN Summit West at the LVH Hotel in Las Vegas.

As you probably know, our Las Vegas Summit is our annual full-day Internet radio conference and a co-located education program of the NAB Show. Now in its 12th year, it's the premiere learning and networking event for the industry focused on radio and the Internet.

This year RAIN Summits is very happy to have partnered with online radio tuning service and mobile listening app maker TuneIn to stream live audio from the event (using Backbone Networks technology). If you're not able to attend, you'll be able to listen to live audio of RAIN Summit panels, presentations, and keynote speeches during the event. TuneIn will also archive the audio for later listening. (We'll post the link to the live audio stream here on Sunday.)

One of the industry thought leaders joining us will be Targetspot CEO Eyal Goldwerger (pictured left), to give a "POV" (point of view) address. TargetSpot is the nation's largest digital audio ad network, with nearly 40 million unique listeners to its more than 85 radio group and pureplay affiliates, nearly two-thirds of the online listening population. TargetSpot recently added six new partners to its network, including Songza and Radionomy (see RAIN here). Goldwerger is a board member of Galil Software, and was CEO of XMPie, Inc., which Xerox purchased in 2006.

One topic which will undoubtedly be on many Summit-goers minds is Apple's nearly-certain entrance into the Net radio field. Today we hear Apple may be close to label deals affording them royalty rates at half what Pandora pays!

Our panel "The Song Plays On" is dedicated to the issue of webcasting royalties, and ways services and the industry might work together better. We're very happy to welcome to the panel and to RAIN Summit composer, arranger, and performer Patrick Laird (pictured right), cellist and founder of the group Break of Reality. Last fall when multi-platinum artists signed on to an "open letter" ad critical of webcaster Pandora's efforts for royalty reform, Laird took his own stand and wrote an op-ed for The Hill in strong support of our medium.

He wrote: "It is clear that the effectiveness of internet radio with regard to both product sales and promotional power is overwhelming, and the success and expansion of these companies are of the utmost importance for the future of our group. Internet radio creates an unparalleled opportunity for us to reach millions of people who otherwise might not discover music like ours" (see our coverage here). Laird's an Eastman School of Music graduate with a Performer's Certificate. (Listen for Break of Reality music during breaks at the Summit!)

Broadcast Music, Inc. (BMI) is one of three "performance rights organizations" in this country that collects license fees from businesses that use musical compositions, and distributes royalties to songwriters, composers, and music publishers. David Levin (left) was named BMI VP/New Media & Strategic Development in October, and he leads digital revenues efforts for BMI. Prior to his current position, Levin spent 12 years at Sony Music Entertainment, where he rose to SVP/Digital Sales. He was also VP/New Media and Senior Director/Online Marketing at Sony. He was Director of Marketing at, a joint venture of Bertelsmann and Universal, and managed market research for BMG.

"The Song Plays On" will be moderated by attorney David Oxenford (more here), widely-regarded as one of the foremost experts on the matter of webcasting royalties. Our other panelists include Brad Prendergast of SoundExchange, Ted Cohen of TAG Strategic, and Rusty Hodge from Soma FM (more info on these three here).

Our RAIN Summit keynote speakers on Sunday will be RAB president and CEO Erica Farber (more in RAIN here) and Rhapsody International president Jon Irwin (more here). More information, including a complete agenda and list of speakers, is available on our RAIN Summit West page.

TargetSpot adds services like Songza and Radionomy to audio ad network

Tuesday, February 12, 2013 - 12:15pm

Online audio ad network TargetSpot has added six new partners to its network, including Songza and Radionomy.

Songza is a webcaster that offers mood- and activity-focused playlists. Radionomy is a free service that allows users to launch their own webcasts.

In addition to those two services, TargetSpot will deliver in-stream audio ads for just hear !t,, Soundtracker, and HulkShare. TargetSpot CEO Eyal Goldwerger said, "Our research shows that Internet radio users switch between streaming sites multiple times a day. Our highly diversified network lets advertisers reach their desired target audiences regardless of the service they listen to or the device they use."

With today's news, the TargetSpot ad network now includes more than 85 radio groups and pureplay online music providers.

Syndicate content