Creative & Tech Media Planning & Buying

Online Radio and Music Streaming: Untapped Potential for Marketers

July 28, 2014

After weeks of speculation surrounding a potential buyout, Google has finally acquired music streaming service Songza, which uses information about both the user and context to determine the most appropriate playlists.

This news comes as the latest in a long line of updates and corporate buyouts within the industry: Apple acquired Beats Music & Beats Electronics for $3 billion in May, while iHeartRadio recently announced some much buzzed-about updates to its personalized music algorithm.

Today, one third of Americans regularly listen to online radio, and this number continues to climb: iHeartRadio alone has amassed 50 million users in just over two years. Not surprisingly, there is a plethora of advertising options available across the various music streaming platforms, but we’re still only really scratching the surface of what can be done. This post outlines some of the current – and impending – opportunities for brands when it comes to online radio.

Leverage Data to Fuel Creativity
The rise of music algorithms marks the most influential development in music discovery since the debut of the mix-tape. Services like Spotify, Pandora, Songza and even YouTube are running numbers to build custom playlists, suggesting music to fit listeners’ moods and tastes in real-time. Beyond the clear-cut user perks, API data is available to brands open to crafting innovative programs around this data: from creating bespoke algorithms for tailored content, to using data to inform branded experiences based on users’ music preferences.

Hyper-Target Based on Consumer Listening Habits
Most streaming services already enable marketers to target consumers on a number of metrics such as location and genre. But now, third-party “music intelligence” companies are beginning to extract more sophisticated insights to understand what else a consumer’s musical tastes might say about their lifestyle. For example, The Echo Nest recently launched a Music Audience Understanding program capable of predicting a swathe of valuable intel including age, gender and affinity for over 20 lifestyle categories (i.e. gamers, fashionistas, concertgoers, etc.) based on users’ listening habits alone.

Break Through the Clutter with Custom, Branded Experiences
Last year, iHeartRadio partnered with Macy’s to launch Mstyleradio, a new digital station that captures the spirit and fusion of culture for Millennial audiences: music is interspersed with talk content on fashion, sports, pop culture and gossip, while the occasional ad slots tout upcoming Macy’s deals. A step beyond the playIist, branded channels like this make it possible for brands to reach a particular subculture with an immersive (yet relevant) experience.

And these experiences aren’t necessarily restricted to music: talk radio makes up 16 percent of terrestrial radio content, and it doesn’t face the same licensing fees as streaming music does. There is an immense opportunity to engage an already-attentive consumer with on-theme talk radio content; for example, a toy brand curating a series of audio bedtime stories that might resonate with parents, or a job search engine hosting a confidence building series that would reach anxious job-hunters. The challenge in this space is ensuring that branded content feels native and complementary to the listening experience, as opposed to disruptive.


When it comes to online radio, the really good news for marketers is that there is room to experiment – often times within smaller budgets. Streaming services need advertisers to help sustain their growth. The current “freemium” business model adopted by most platforms is precarious at best: with rising licensing costs haemorrhaging money and few users willing to jump to premium memberships – they depend heavily on advertising revenue.

Furthermore, as more of these services enter the market, companies remain focused on building subscribers in order to demonstrate their own unique value. The marketing muscle brought by creative partnerships or technological innovations could just be the thing to set one service apart from another.

Cover photo via ThisIsMoney