Jon Mitchell, the man that launched Spotify in the UK, shares with us his thoughts on “The future of digital audio”
The future of digital audio is very rosy. As technology marches along at its rapid pace it won’t be long until we will be able to target Mercedes drivers who are driving between Bracknell and Maidenhead, listening to podcasts about great innovators with local BMW dealership ads. The creators are going to get financially rewarded, the listener gets to listen to what they want and the advertiser gets the audience at the right time in the right environment. Everybody wins!
This is such a great time to be a creator if you can work out the economics. There are no shortage of distribution options. Web only stations, Pandora style algorithmic radio stations, household brand radio stations, the explosion of podcasts and the pure play streaming services. Choice is not a problem and I think this is a golden age of discovery for audiences. Geographical boundaries are now limited only by language and if the content is good you will be able to monetize globally too. Software and audio equipment are so cheap now that new stars in audio will be born just like the vloggers that we now have thanks to the likes of Youtube.
A couple of thoughts pop up for advertisers too. The sheer scale of audience should be very attractive. I do think we should be starting to ignore the term “radio” personally though. By this I don’t mean ignoring or boycotting traditional radio stations at all. However, we should be thinking about this rapid growth of audio consumption as a sea change. Think of pipes first, not antennas for starters. There are some practical issues too. For example how do you filter good from bad environments for your campaigns, especially when buying through things like Exchanges. Buying 50p CPMs with very little control of where your ads are going will be an option. Is there going to be as much comfort with a more powerful medium doing this than cheap banners? I suspect not.
There is going to be lots of demand for expertise in this area. More than ever before. Mastering 350 UK radio stations will seem laughable in the years ahead. Maybe it already is. For those buying and advising on impressions, they are in a great position, but I do have a couple of concerns. Will these companies invest quickly enough to sharpen up their staffing expertise. Will they be able to take advantage of the rise of programmatic buying for audio for example and sidestep digital media specialists who can in theory buy the same inventory? This is expensive but essential. Secondly, and perhaps more importantly will brands become less important to advertisers as they inevitably chase price and performance? Can audio avoid the downwards spiral of price that happened online? Huge media owners have struggled in the digital age to justify huge premiums and have had to adapt to get volume revenue to keep their operations afloat. Will people pay a premium to sit in a well curated and made Classic FM experience more than a random algorithm web based classical radio station? The answer is I hope so, as there is real value but will performance metrics dominate the conversation? These are questions that need to be answered still.
I have one last musing and it puts a smile on my face having sold radio for many years. With all the technical advancement and where all media will be bought programmatically, the power of audio can finally sit at the same table as everything else. The concept of the 7% medium is about to vanish forever and I believe investment in audio is going to be much, much bigger. If you are adapting into the audio space, now is such an exciting time.