SoundCloud is an audio streaming platform that is very different from other audio streaming platforms. While SoundCloud does stream licensed music tracks, it’s also a go-to platform for user-generated content. Any user can create a profile and upload audio content to SoundCloud, making it similar to how YouTube functions in the video space. It also offers a social aspect – users can comment on one another’s tracks, and share the tracks or playlists on their own pages, a la a ‘retweet’ on Twitter. SoundCloud players can easily be embedded on a webpage, so it’s become a preferred way for many music sites and bloggers to put tracks or albums in front of their readers. Ultimately, it’s the ease with which users can share and interact with audio content that has allowed SoundCloud to carve out its own niche in the streaming space and become so popular for DJs, independent artists, podcasters, and listeners since its inception in 2007.
SoundCloud’s popularity is impressive. According to comScore, SoundCloud reaches 13.6% of Adults 18+ per month through the property’s desktop and mobile sites (browser and app). Including all the content that is embedded in other sites on the internet, SoundCloud’s monthly reach skyrockets to 32.5%. This is higher than competitors iHeart and Spotify, and only a few percentage points below Pandora, which has long dominated the audio streaming space. SoundCloud’s unique strength is with younger audiences. According to comScore, the service achieved a 52.7% monthly reach with Adults 18-34, indicating more than half of all Millennials were users of the platform (inclusive of embedded content; 25% reach on SoundCloud-owned properties). Millennials, who are beginning to make choices about brands that could last a lifetime, are a particularly coveted segment for many marketers – and they can also be a challenging audience to reach via traditional channels as their media habits become increasingly fragmented and complex. SoundCloud is poised to capitalize on the opportunity their position affords. The platform has been expanding its advertising offerings significantly since it first introduced ads in 2014.
This model does mean, however, that much of the content is not insertable for advertising. Pandora and Spotify pay royalties to labels and artists, and it is under this pretense of sharing ad- or subscription-based revenue that the artists provide their licensed audio tracks. On SoundCloud, a user might upload a recording of his baby’s first words to share with grandparents in another state – which they can do by simply sending grandmom a link (again, think YouTube). There is no business opportunity here for SoundCloud, for the proud parent, or for an advertiser. Even serious musical artists who choose to share their music with listeners via an ad-free listening experience will use SoundCloud in this same manner, even though it doesn’t generate any revenue for them. And so, the total reach of the platform (and its position compared to other services) does not necessarily reflect the scale of advertising inventory or the potential reach for an advertiser. Some regular SoundCloud users – depending upon how they use the service – might not even know that the service has ads.
But it does! And there are several interesting ways for advertisers to partner with SoundCloud. There are traditional products such as radio-style audio ads, which for now are only served before or within the audio content of premier partners (this is an “invite-only” status for select artists and content providers which has yet to be expanded to a large scale). But there are also native opportunities for a page to promote its own profile and audio content. Several large brands have done interesting custom sponsorships and contests with the platform. For example, SoundCloud paired Jaguar and Microsoft with emerging artists who created exclusive tracks sponsored by the brands. SoundCloud also ran an open call for artists to submit their music into a competition for Green Label Sound, the in-house record label of Mountain Dew. And several companies, from Hennessy to Goldman Sachs, host and promote branded podcasts on the platform.
SoundCloud has also made recent moves to enhance their targeting capabilities. Just last month, the company announced it would offer programmatic ad buying in the U.S. via a partnership with Triton Digital, enabling advertisers to target users via criteria such as location, demographics, or music listening habits. It’s clear that the company is now placing increased importance on advertising for its long-term sustainability (after posting a loss of $52 million on revenues of just $22 million in 2015). And since SoundCloud has grown into a uniquely strong position with Millennials – and their successors, “Gen Z” (whom SoundCloud boasts make up 75% of their listeners) – there’s no questioning that the iron is hot. Many advertisers might also ask themselves whether it’s time for them to strike, too.
And for any marketers who aren’t yet ready to invest their ad dollars with SoundCloud, there are organic ways to use the platform. Just take a page out of the Hamburger Helper playbook: 1) make a fire mixtape, 2) upload. The General Mills-commissioned EP Watch the Stove went immediately viral, garnering 4 million listens on SoundCloud in less than three days… it’s now up to 13 million plays and counting. Now that’s earned media!