SoundCloud Starts Pushing Its Own Native Ads Out of a New York Outpost
There is an increasingly long list of digital outlets pushing their own version of “native advertising” — ads that want to convince people that they’re just like “real” content.
Now add another one to the list: SoundCloud, the digital audio platform, is trying to court brands with its own specialized ad unit. This one lets a marketer stick what amounts to a moving billboard behind the startup’s signature “waveform” audio units.
Here’s what one of those looks like, from Blue Bottle Coffee:
SoundCloud officially rolled these out in March, but the concept is so new that CEO Alex Ljung said the company hasn’t figured what to charge for it, or how the mechanics will work. That’s one of the reasons he has hired Dan Gerber, a sales vet from Pandora, to open up a New York office next month; SoundCloud started out in Berlin and also has an operation in San Francisco.
“There’s a lot of interest from other brands that want this, and we’re taking it out step by step. We want to build this out,” Ljung said.
Up until now, SoundCloud has only made money with a “freemium” model, where most of its users pay nothing to upload and play audio files, and a small minority pay a monthly fee for extra features.
But just like lots of other Web services that started out ignoring ads, SoundCloud figures its future will involve them, after all. See: Facebook, Twitter, Tumblr, etc. SoundCloud has raised more than $60 million in the last few years, so it’s not surprising to see them start playing with ads themselves.
One of the challenges for all these platforms is that every one of them requires advertisers to experiment with a new format, which reduces the chance that any of them will truly scale. (See Felix Salmon’s excellent BuzzFeed analysis for more on this.)
Ljung argues that his audio files reach an audience of 200 million people a month (SoundCloud used to provide “registered user” numbers, which told you how many people could conceivably upload an audio file, it but doesn’t anymore), so presumably that will entice some brands.
On the other hand, audio advertising on the Web is still in its embryonic stage, as a Pandora vet like Gerber knows very well.