DIGITAL MEDIA DIGEST: JAN ‘17
A monthly look at the world of digital from NORTH’s point of view
“The Alexa Effect” On Streaming Radio
By Caroline Desmond, Director of Media Strategy
Amazon’s voice activated artificial intelligence bot Alexa is all over this year’s Consumer Electronics Show (CES) in the form of new integrations within appliances and gadgets. In fact, according to The Verge, Alexa has gone from 1,000 integrations (skills) in June in 2016 to around 7,000 now.
In addition, MediaPost reports Amazon has likely sold four to five million devices equipped with Alexa this year to date. As noted above, Alexa has many skills, but one of the most often used by consumers is to play music. For this reason, the proliferation of Alexa enabled devices could have a significant effect on increased listening hours for music services that Alexa connects to including top streaming companies like Spotify and Pandora. This in turn could continue to shift the balance between consumer time spent listening to radio via AM/FM and consumers listening to radio via streaming services.
To be sure, streaming has been on the rise for some time now. Pandora for example has seen continued year on year growth for the last five years.
As early as 2013, Pandora became THE top station in across 14 out of 15 top local markets.
That said, streaming radio overall still has room to grow. While it’s been on the rise, it only accounted for 17% of time spent with music as of October of last year behind AM/FM radio and owned music.
That could change soon however with what Mediapost has dubbed “The Alexa Effect” in it’s predictions for 2017. Essentially Alexa enabled devices will make it even easier for consumers to connect to streaming music channels which could cause a rebirth in audio as a channel, and particularly connected audio. Like other traditional channels turned digital, this means better targeting, better measurement and more efficient planning and buying processes that in turn lead to greater savings for clients. Less overhead → more budget available for actual media.
Going forward, where radio makes an appear on a plan, streaming radio must be part of the mix or brands risk losing out on a significant and ever-growing portion of the listening population. It’s also likely we’ll see streaming radio take over a larger piece of the pie relative to AM/FM as a source of music entertainment in 2017; a trend we’ll be keeping an eye on as the Alexa Effect takes hold.
Pandora’s Mobile First Impression
By Nathan Johnson, Media Planner
Speaking of Pandora, the company announced that this month they will be releasing updates to their core display product for a more “visual ad experience.” The goal is for a more qualified impression that feels like a native ad experience, creates purposeful interactions/intent, and is attention and engagement based.
We are at a point in history where mobile accounts for the majority of digitally consumed media, which has birthed the mantra “mobile first.” However, it seems that in many cases “mobile first” has simply meant taking pre-existing desktop assets and formatting to fit on mobile without much thought on how to adjust the experience for the new device. Pandora seeks to remedy this.
Visual Ad Experience updates include:
- Native creative placement: The ad will no longer cover up user’s content, but instead appear in the same container that houses the album cover art.
- Swipe to dismiss feature: To replace the “X” close button, Pandora introduced a new swipe-to-dismiss function that is similar to that of other popular mobile apps.
- In-app landing pages: Advertisers can take advantage of a native landing page within the Pandora app that keeps users within the platform.
- Responsive design: A new responsive design and a 1:1 aspect ratio, so the ad will automatically adjust to the size of the listener’s phone.
- Muted video: A new ad product that plays a muted video in the responsive display unit.
According to Pandora, the results from their beta tests have proven successful. Partners saw up to a 50% increase in time spent with the new display units and higher click quality as demonstrated by lower bounce rates and increased conversions. Pandora also revealed that they saw double digit lifts in brand favorability, awareness, and message resonance.
With the stats above, Pandora seems to have found a solution to make their ads more mobile friendly. In my opinion the streaming radio company did three specific things right in their update.
Creating a swipe-to-dismiss feature: As someone who has had multiple cases of fat finger syndrome and unintentionally clicked an ad that I was trying to close, this solution is perfect. This functionality has already been used in popular apps such as Tinder where a user can dismiss a match/ad by simply swiping left. Since the motion is specifically designed for mobile interactions, we would expect there to be a substantial decrease in invalid clicks/taps and thus a more qualified overall CTR.
Designing a more native landing page: There are already platforms using this functionality such as Facebook and Instagram, because it creates a clean, non-interruptive user experience where the user can quickly go back to consuming the previous media. I believe that users will be more open to clicking on ads once they have discovered that doing so will not redirect them.
Muted video to grab attention: What better way to grab a user’s attention than to serve a video? What I think is great about this new ad solution is that the advertiser is able to associate their brand with the user’s music as it continues to play over the muted video, which could in turn lead to increased favorability.
Ultimately, Pandora’s new core display products will give advertisers multiple options to help reach their campaign objectives. What feature is used will be dependent on budget, assets and campaign KPI’s, however no matter what solution is chosen, it is important to set up clear measures for success. Pandora’s new Visual Ad Experience will be available to all advertisers starting January 19.
Cable Got Your Goat? Try Screaming, I Mean Streaming.
Flynn Andrew Robertson, Assistant Media Planner
There are a few topics in life that I am quite passionate about. The list includes environmental conservation, montage videos of goats screaming like humans, wondering whether or not Dom Toretto will actually betray his family in the new Fast & Furious, and cord-cutting. For the unfamiliar, cord-cutting is when you cancel whichever probably-overpriced cable service you subscribe to and make the wallet-friendly move to an online streaming service.
Beyond the personal financial implications of cord cutting, it also puts advertisers in an interesting situation, particularly when it comes to reaching Generation Z and Millennial viewers. According to a 2016 Nielsen study, 31% of Gen Z and Millennials pay for online content. In addition, 38% of Millennial respondents and 40% of Gen Z state “they have plans to cancel their [cable service] in favor of an online-only option”.
This raises the question, how do we adapt to reaching these audiences in the online-streaming universe, especially if the previous numbers continue to grow? Personally, I think the ability to hyper-target audiences, which will pave the way for strong creative that feels almost personalized to the viewer, is a huge advantage that isn’t as available on traditional TV. Although, the difficulty that comes with adapting varies based on which streaming service we are discussing.
On the one hand, you have some platforms, like Netflix, that limit their advertising to self-promotion. This simultaneously excludes traditional advertisers while creating a pool of untapped advertising resources. On the other hand, there are services like SlingTV that essentially package channels and provide the shows online.
Services similar to Sling provide a more traditional advertising opportunity and guarantee a way for brands to communicate with their audience if they are to be found streaming online video. But for those consumers who are trying to escape the clutter of the more traditional television offerings, do SlingTV (and the like) provide the answer they are looking for? Or is it just cable television — albeit with a smaller price tag — repackaged as online video?
As a Netflix devotee, I (with just a hint of profession-related irony) selfishly say to the thought of commercials: stay away and leave me and the rest of the binge-watching population alone to watch our shows. However, the advertising professional in me sees a unique opportunity, and is curious to see the brilliant, yet noninvasive, creative work that would need to be produced to keep those seeking refuge amongst the vast libraries of the commercial-free platforms from immediately canceling their subscriptions.
In addition to strong creative, the nature of online video allows for a more targeted advertisement. The more accurately we can target an ad, the more relevant the ad should be to the viewer. As a result, the viewer should be less annoyed, or not annoyed at all, with the ad that was served. In a perfect world, they will even be receptive of the advertising work they are presented with. However, it’s going to be a tough crowd to crack. One study suggests that 74% of Netflix users would cancel their account if advertisements were introduced. And that’s not good for anybody.
However, no matter how it shakes out further on down the road, I believe that services like Netflix and Amazon Prime Video will remain commercial-free for the foreseeable future. Like sponsorships on NFL jerseys, I’d imagine it’s only a matter of time before advertising comes to some of these services, but we’ll cross that bridge when we come to it. Until then, advertisers can continue to reach audiences — even Gen Z and Millennials, for now — the traditional way and through ad-friendly online streaming services. OK, that’s it for this month, it’s about time I checked if Netflix finally uploaded any screaming goat compilations.
