Music advertising has a streaming attribution problem

Music advertising has a streaming attribution problem – and artists are the ones on the hook for it (guest post)

The below is a guest column from Adrian Burger, founder of creative management agency Lafter.
 
Major label marketing budgets are measured in the billions of dollars, and it takes hundreds of thousands of dollars simply to launch an artist. Post-Covid, an increasingly large portion of that budget is spent on digital ads. One of the benefits of digital marketing is measurability. Knowing who clicked what, when they did it, and where they ended up is very not only very useful, it’s the focal point of many hours of hard work by music marketers – especially when they’re persuading people to click through to songs on streaming platforms. 
 
However, here, Burger makes the argument that the streaming of digital products via digital ads has not only proven very difficult to measure – but that there’s also a mistaken assumption that clicks lead to streams. This is a deep-dive into the metrics at the heart of many modern-day music campaigns, questioning – and offering alternative solutions to – some of today’s prevalent thinking. It’s certainly essential reading for anyone involved in – or paying for – the decision-making that determines the success or failure of a campaign, as well the measurement of it. 

Note: Burger previously worked at music marketing agency Wavo, and manages the artist maxime., both cited in this piece.

1The last two years an inflection point for a decades-long trend

Long before the physical world came to a standstill, many record labels, artist-entrepreneurs, promoters, and others in the music industry had been allocating an increasing majority share of their advertising expenditure to digital channels like social-media platforms. So, while the COVID-19 pandemic has certainly had transformational effects on artists’ careers, it hasn’t led to a radical shift in the industry’s overall spending patterns. Instead, the last two years acted only as an inflection point for an irreversible hastening of a decades-long trend.

Per PwC and the Interactive Advertising Bureau (I.A.B.), internet ad revenues in the U.S. totaled $139.8 billion in 2020, up 12% year-over-year (YoY) amidst a global economic recession; in particular — following a COVID-induced 5% YoY decline in Q2 — Q3 and Q4 2020 were up 12% and 29%, respectively, on their counterparts a year prior, recording new all-time highs. 

U.S. internet audio ad revenues alone reached $2.7 billion in 2019, up 21% YoY; by 2024, the I.A.B. and PwC predict U.S. online radio and streaming ad revenues will reach a combined $4.3 billion. By contrast, the I.A.B. predicts “Traditional budgets,” citing Linear (non-interactive) TV as the primary victim, will lose another 6% of U.S. ad share in 2022. One recent I.A.B. survey has the projected share of digital versus traditional U.S. ad spend for 2022 at almost 80/20:

 [Source: IAB Buyer Perspectives on 2022 Media Planning & Budgeting, October 2021]

[Source: IAB Buyer Perspectives on 2022 Media Planning & Budgeting, October 2021]

All this is nothing new: From 2010 to 2019, U.S. internet ad revenues grew at a staggering 19% compound annual rate on average. By 2025, the I.A.B. and PwC predict the U.S. digital ad market will surpass $200 billion in revenues.

Desktop vs mobile full year internet ad revenues 2010 2019 Source: IAB/PwC Internet Ad Revenue Report, FY 2019

Quarterly internet advertising revenue growth trends 1996-2019. Source: IAB/PwC Internet Ad Revenue Report, FY 2019

[Source: IAB/PwC Internet Ad Revenue Report, FY 2019]

Keep in mind, the above are industry-agnostic data. The shift in global music consumption habits from unit sales to streaming certainly mirrors the physical-to-digital advertising trends of the 2010s and now 2020s. But because so much of the music industry has historically revolved around live events, it was uniquely affected by the pandemic in a way that transcended past ad-buying trends alone.

During the pandemic, digital advertising in the music industry has been substituted for not only offline advertising as a means for promotional investment in artists, but at times virtually all forms of in-person marketing, too, as lavish appearances, performances and billboards were traded for TikTok campaigns and livestreams. (Even in the case, e.g., of Drake’s much-discussed 2021 pre-album billboard campaign, one might ask: How many people saw the signs in-person versus in, say, their Twitter feed?)

In 2016 – before the massive influx of institutional and public-market investment in music companies, and the double-digit annual sector growth recorded music has seen since – the Recording Industry Association of America was already valuing annual marketing budgets for the major labels (UMG, SME, WMG) at $1.7 billion. 

The point is: Digital – and specifically advertising, as its primary vehicle – accounts for a greater proportion of music marketing spend than ever before. 

And from the majors to DIY artists and everything in between, we’re talking about a lot of money.

2The streaming attribution problem

Given all the real-time data at one’s disposal in the digital arena, especially in streaming, one might figure that results-based decision-making emerges as a winner in this new era of music marketing. But while the Internet has opened up countless new, data-driven avenues for music advertising compared to traditional channels, it has also muddied understanding of return on investment in advertising — Return On Ad Spend (ROAS) — by encouraging the conflation of digital ad metrics with the actions that are taken after interacting with one. In the context of artist economics, this becomes a major problem.

Nowhere is this obfuscation of ROAS more apparent than in recorded music. Paradoxically, the sale of physical goods via digital advertising is highly ROAS-trackable: Through Direct-to-Consumer (D2C) storefronts (e.g. a Shopify-powered artist merchandise store), digital ad buyers can optimize for Conversions (sales) by placing so-called pixels – snippets of code – from Facebook, Google, and others on a site which can measure actual dollar amounts of sales generated by ads. Through pixel data, one can see exactly how many times a t-shirt, for example, was purchased, and, based on an item’s price and margin, rather conclusively say that ads returned a profit or not. (Note: Since Apple introduced its iOS 14 conversion-tracking opt-out capabilities to iPhone users, this data has been hampered, but D2C remains an important and relatively objective channel for music advertisers.) 

Yet the streaming of digital products via digital ads has proven very difficult to measure. Simply attributing a Spotify stream to an Instagram ad campaign, for instance, continues to be an imprecise and inferred science at best: For one, many folks, after clicking on an ad, don’t even make it to a streaming service (DSP), exiting (a.k.a. bouncing) instead at the stage of a landing page listing multiple DSPs; and once they do, in the case of Spotify, there is presently no way to definitively attribute any streams to these ad-clicking audiences, since Spotify does not provide this data to ad or link platforms.

Maxime sponsored post infographic

3The streaming attribution problem historically has mostly been one of data-sharing.

When Linkfire, the Nasdaq Nordic-traded link and analytics provider for the music industry, announced in late 2019 its integration of post-link-click streaming data for Apple Music, it marked the first partnership of its kind. There was a catch: This data is available to paid Linkfire subscribers only, and when either directing audiences straight to Apple Music or placing it in the first spot on a landing (a.k.a. pivot) page. (Additionally, there are limitations such as a daily minimum of 10 users streaming a given song to unlock track-level insights which can prove prohibitive with smaller ad budgets.) Still, this was a landmark step towards accountability for the results of music streaming-focused digital ad campaigns.

Apple Music x Linkfire streaming attribution data, visualized:

The Velveteins mobile screens

[Source: Linkfire]

As of this time of writing, YouTube, Deezer and Pandora are also providing some level of data to Linkfire. In no case is such data nearly as complete as that which lives natively in a platform like Meta Ads Manager or Google Ads, though partial data is unquestionably better than none. 

Spotify, the global DSP market leader by some margin as measured by paid subscribers, has yet to announce any such integration, as have, on the other side of the coin, Linkfire’s rivals.

And so, even given recent advances, when ostensibly optimizing a social-media ad campaign for streams – and in recorded music, who isn’t at least some portion of the time, at this point – digital advertisers are reliant on at best a loose approximation of streaming data, and at worst nothing beyond the initial action (e.g. click or video view) from an ad engager. 

With all this said, streaming services themselves offer an attractive route towards streaming attribution data. Indeed, Victoria Needs, VP of International Marketing at AWAL from its London office, calls them the exception to the rule – those rare ad platforms where the user is already in music-listening mode. 

Spotify’s Ad Studio product includes such secondary metrics as “Intent Rate,” essentially a save/playlist add rate, and “New Listeners,” which are folks who’d not heard a song from the advertised artist’s entire catalog in the last month. These are much sought-after music ad metrics that give users meaningful and powerful insights into user behaviours.

Artist results graph

[Source: Spotify Ad Studio]

Spotify is joined by other streaming services offering advertising solutions with streaming attribution data: SoundCloud, with its self-serve “Promote On SoundCloud” advertising platform; Pandora, which has a host of robust audio and visual formats; Audiomack and Deezer “Sponsored Song” audio ads which are available for purchase through Feature.Fm.

An edited version of a “fan-funnel” graphic from Amber Horsburgh’s excellent Hip-Hop Marketing Budgets case study illustrates below where, at present, often-used digital ad formats reside in their ability – or lack thereof – to prove outcomes like sales or streams:

recorded music social ads infographic

4The curse of “cost-per-click”

One need not even look at streaming attribution itself to see an example of data that elucidates some of the challenges in streaming advertising.

Brendan Neal is the VP, Revenue Operations, of the Montreal-headquartered, 150-person-plus, music-only digital marketing and analytics agency Wavo. He recalls experiences looking at campaign data, well before the introduction of any streaming attribution data, that led him, an Ad Operator at the time (the one setting up campaigns directly in Facebook Ads Manager, for example) to question the status quo: “What we saw was that clicking on an ad [by and large an industry-standard practice at the time] wasn’t a strong proxy for streaming, and this was consistent with larger brand studies done by companies like Google, where they have noted that clicks are not a strong signal of purchase intent. In our campaigns, people who viewed videos for longer periods of time or turned their sound on were more likely to reach their streaming platform of choice than those who clicked on the ads at a high rate.”

Click Objective Video Views Objective chart

[Source: Wavo]

There is something to be said for the fact that recorded music is one of the only products that can actually be consumed in an ad itself – watching a social-media ad of a song with sound on can be considered a de facto stream (as measured by recall, if not monetization). Some formats like YouTube TrueView Pre-Roll in fact replicate almost exactly the experience of, in that case, watching a music video organically.

youtube organic paid

Indeed, in discussing music advertising across social-media channels especially, on-platform engagement (e.g., ad audiences actually listening to a song) can be an overlooked priority. 

Cost-per-click (CPC) campaigns – which optimize for exactly that – are, in contrast, the clearest example of recorded music ads gone wrong, given a mistaken assumption that Clicks lead to Streams. My anecdotal experience working with major music companies on advertising solutions demonstrated that Clicks are still held in high regard among many in-house ad teams and major agencies alike. (One understands the internal pressures at labels and otherwise, given a focus on the streaming economy, to report on traffic driven to DSPs in the absence of robust first-party streaming attribution data.)

Anthony Pacheco is a music advertising expert who runs a digital marketing boutique, simpl., that counts the likes of Whethan (Atlantic Records), Luna Li (In Real Life/AWAL), and contradash (Interscope Records) among its clients. He also has a history as an artist, co-founding post-punk band Dwellings whose debut album impacted Billboard (appearing on its New Artist, Alternative, Rock, and Independent Albums charts).

“[Digital] ad platforms do a wonderful job with their campaign objectives. Want video views? Optimize for Video Views. Want DMs? Optimize for Messages. Following suit, one would think Link Clicks are the right objective to generate more website traffic,” says Pacheco. 

“While this is true, the issue lies with advertisers not understanding what optimizing for Clicks really means: You will get link clicks, but you will not get people listening to your music, or rather, converting.” 

The CPC case study is instructive in that it speaks to a phenomenon that is very much not music industry-specific but rather one that plagues digital advertising at large. Blue-chip studies from Nielsen and others have drawn the conclusion that Clicks are by and large not correlated with advertising success. Yet market research consultancy Xaxis, polling nearly 5,000 marketers across dozens of industries globally in 2018, found that Cost Per Click (19%) and Clickthrough Rate (18%) ranked number two and three in the methods most used as a metric to evaluate the success of digital media spend, virtually tied with Cost Per Acquisition (20%) and Cost Per Completed View (19%). The UK’s Internet Advertising Bureau felt strongly enough about the pervasive use of CPC campaigns in early 2019 to declare a “National Anti-Click-Through Rate Day.” (Seriously. Check it out.) 

LinkedIn’s Peter Weinberg – Global Lead, Market Development at the time, in 2019 – has gone on record saying it’s not just that Clicks are uncorrelated to ad performance: In his view, “Click-Through Rate (CTR) is a negative indicator. In other words, if you have a very high CTR, it may be a sign that your marketing isn’t working.” While this is a blanket statement, the rationale is simple and compelling – the folks who are clicking on ads are not necessarily those interested in engaging more meaningfully with the content, something the Linkfire pivot page drop-off rate case study exemplifies. 

London-based music marketing consultancy Motive Unknown – which counts The Spice Girls and Run The Jewels among its diverse client base – is operated by its founder Darren Hemmings, who writes a must-read weekly music and tech industry newsletter, “The Digest.” Specializing in a full-suite digital approach, its operations cover audience development, ecommerce, strategy, data management, social-media planning and more. In 2018, Motive Unknown released a thorough, colorful and informative public-facing slide deck explaining why, in their view, “There is no ROAS that can make optimising for link clicks to streaming services worthwhile,” also contending that to seek “an immediate ‘see ad, click ad, listen’ response is myopic and misunderstands audience response.”

Our Assertions

[Source: Motive Unknown Ad Strategy Presentation 2019 (Public Distribution)]

Says Darren, “It’s sort of patronizing to expect someone to be handheld to Spotify as though they can’t find the music themselves.” He is a firm believer that a just-aware audience – let alone a brand new one – should not be seeing ads asking them to stream a product now. He notes the exception where streaming calls-to-action could work would be with existing fans: If someone already likes your music, asking them to listen to a new release could be justified, though it shouldn’t be expected of ad audiences to uniformly take immediate action.

Nowadays, he argues, “It’s all about awareness and fan connection. It’s necessary for the music business to understand the grounds are shifting beneath them and audiences are tiring of played-out ad formats. Even now, I see so many single one, single two, album campaigns, each run for a week or two, and people give up pushing things by week four from project release – this runs totally contrary to the way brands operate in an always-on fashion.”

There is more in common between, say, record labels and globally-recognized consumer brands, explains Darren; he thinks the music industry at large could greatly benefit from a rethinking of its ad strategy such that it becomes more aligned with the so-called evergreen (uninterrupted ads) brand ad approach (in a music context, running ads whether an artist is on-cycle or off-). This is explored below in the example of Adidas, whose digital ad reorientation sparked a larger conversion on campaign objectives.

5Goals, goals, goals

Perhaps poor campaign strategies are only symptomatic of a more deep-rooted problem: The lack of a clear goal-setting culture in recorded music advertising.

For Neal and his team of marketers at Wavo, the first and most important step in assessing ad performance is the identification and measurement of two distinct sets of goals: media objectives – e.g., 1 million YouTube views via TrueView In-Stream – and business goals – e.g., 100,000 US, first-week album-equivalent units. 

He says, “At Wavo, we frame our media planning within the context of a goal that is ultimately driving revenue for the artist – whether streams, tickets, or merchandise – to ensure that our campaigns aren’t being planned and executed in silo. Yes, impressions, views, and clicks are all important indicators of engagement and performance but if we can’t align those KPIs with the actual output of the artists we work with, we can’t understand the true impact our investments are making. There are of course technical limitations to true attribution, but the performance of a song, concert, or merchandise line have to guide our decisions in continuing and expanding a campaign vs. pulling back and focusing elsewhere.” 

In 2019, Adidas’ global media director, Simon Peel, told MarketingWeek “[The industry has] become overly obsessed with shiny things and digital has been a representation of that… We mistake media strategy with campaign strategy.” Over the last few years, Adidas has totally reoriented itself from a focus on short-term ad metrics to considerations of ad strategy, holistically. For instance, it has stopped focusing so heavily on metrics like Conversions, balancing these with metrics like Ad Recall. The idea is that for a brand like Adidas, one needs to focus not only on instant ad results but also on staying top-of-mind – Facebook has estimated that a 10-second view can drive 72% of a campaign’s impact on purchase intent. (This is mirrored in Wavo’s findings on Views versus Clicks campaigns.)

The ramifications of ineffective advertising campaigns are major. The IFPI estimates total marketing spend for any given new priority signing to a major label totals between $200,000-700,000. In the case of record labels both major and indie,

digital advertising expenses are in many cases recoupable in whole or in part from artists.

Even in cases where they are not, thousands of dollars spent optimizing for the wrong goal can lead to huge wastage, and losses to artists’ potential social and streaming growth.

Labels typical investment in major new signing

[Source: IFPI Investing In Music Report, 2016]

In another paradox, it is actually the deals generally seen as being more artist-friendly (e.g., net profit-sharing ones, like a 50/50 royalty split once expenses and advances are paid back or recouped) that suboptimal ad campaigns are most likely to adversely affect artists. 

This is because for net profit label deals, or distribution deals (generally a stripped-back offering that can offer post-recoupment splits as favourable as 90% to the artist), ad expenses are most likely to be 100% recoupable: If they weren’t, it would be hard to justify spending substantial money upfront only to give such a preferable rate on royalties later on. 

And so a campaign that for example drives tons of clicks but no streams will significantly increase time-to-recoupment, meaning an artist sees no royalties until they’ve paid back the potentially tens of thousands of dollars’ worth of ineffective ads by way of their streaming, sales (and sometimes sync or other) royalties. In traditional label deals, the extent to which ad expenses are recoupable varies, but one way or another, advertising money being misspent cannot possibly be a good thing for artists. (Certainly in the case of artists and/or managers buying ads themselves, ad results are inextricably tied to an artist’s bottom line.) 

All this is said recognizing that record label employees are too often spread thin, with dozens of acts per employee, particularly in the Digital Marketing department (whose separation at most labels from Marketing some suggest is an outdated one). Many industry professionals I’ve spoken with wish they could dedicate more time to developing bespoke ad campaigns but bandwidth makes personalization difficult if not impossible. 

Yet even opening a critical discussion around streaming attribution is a crucial first step in helping to root out what Pacheco calls the “heartbreaking” CPC state-of-affairs – one he says is wasting “conservatively, millions of dollars” among major and indie labels as well as self-contained artists and managers.

Both labels and artists investing their own resources ought to be empowered with greater data from streaming services and otherwise to make calculated decisions about ad spend.

6Dealing with lacking music streaming attribution data

For all this talk about money-wasting, there is equally a conversation to be had about the benefits successful recorded music ad campaigns can have. Pacheco says “There may not always be a positive ROAS to ads right away (e.g. spend $1 and make back more) but returns compound over time when building a fanbase, and advertising is one of the best and most reliable tools for achieving this.” He adds, “The biggest focus for any music promotion strategy in 2022 should be on fan acquisition.”

7Getting closer to measuring streams via social-media campaigns by leveraging a Conversions goal

Tactically, Pacheco’s agency simpl. categorically avoids CPC campaigns, instead focusing on either Video Views, which are highly effective for building warm audiences (that have, say, watched at least 10 seconds of an ad) for future retargeting; or Conversions, which are in his view the most effective way to send fans from social-media to streaming services: “Optimizing for conversions (actions taken on your streaming smart links) is an absolute game changer.” This is an example of thinking about business objectives – in this case, driving streams – and aligning them with media objectives (e.g. Conversions) that will actually drive the desired result rather than ones (Clicks) that may look good on paper but do little to achieve the end goal.

Advice on the website of music marketing agency simpl. leaves little to the imagination, in speaking to CPC (a.k.a. traffic) campaigns…

Facebook Ads Campaigns

[Source: simpl.]

Laurie Lee Boutet, a Toronto-based artist manager whose clients include GRAE, Ralph, and Alex Porat, has seen the Conversions versus Clicks narrative play out firsthand: In one recent campaign, a Conversions goal drove 7x fewer clicks yet 5x more conversions – the difference between someone clicking on an ad and actually making it into Spotify after that (let alone streaming once they get there). Sure, a fan sent to Spotify does not preclude a stream, but in the absence of actual attribution data, this at least gets one a step closer.

Interestingly, a recent study in a Facebook group of artist managers – mostly ones who run ads themselves – showed 84% of them prefer Conversions ads to any other campaign objective type, many citing leading educators in the industry like Pacheco as their reason for having made the switch from Clicks (one can surmise that when one’s own money is on the line, the impetus for ensuring the highest possible ROAS becomes even greater).

John Muirhead, a Canadian folk/indie recording artist who also runs his own ads, says he, too, discovered the Conversions-optimized approach recently (through a series YouTube tutorials) and has seen increases of as many as several hundred followers on both Instagram and Spotify – an artist-made catalog playlist specifically – via Conversions ads. “Learning my way around digital ads has been one of the most impactful things I’ve done for my career,” he says. “Through these ads, I’ve established genuine relationships with real fans around the globe, and have seen show opportunities and merchandise sales arise as a direct result of the people I’ve reached.”

John’s advice for artists and marketers? “What I’ve learned is that it’s essential to have a solid top-of-funnel video creative that’s authentic to your music, your story, and your brand.”  He specifically advocates for using a DIY, TikTok-inspired format (e.g., ‘do you listen to these acts? If so, stop scrolling – I’m an artist from Canada’… you get the gist). 

Indeed, to label marketers like Needs, measuring music advertising success in 2021 means refining ad efforts to achieve one basic aim – reaching new and existing audiences, and reengaging the ones that react with intent (e.g. watching an ad to completion), in a way that isn’t sales-y: “Just look at artists like Girl In Red who have deeply engaged audiences,” she says. “Relationships are [most] often born via organic content and direct-to fan dialogue, so why not harness that energy for digital ads?”

“Also, test, test, test,” says John – “the more creatives at your disposal, the better. Platforms like TikTok [where John counts 50,000 followers] and IG Reels are great places to test your videos, because if they perform well algorithmically/organically, they’ll likely do well as an ad, too.”

While this runs contrary to some of the conventional wisdom, he is even convinced that brand-new audiences can sometimes connect with this kind of video in a way the vast majority of ads could not – certainly his IG comments section on a recent ad seems to bear that out:

John Muirhead Hey if you like these things

(On a more technical level, John notes that iOS 14 opt-outs mean his campaigns appear much more expensive in Facebook/Meta Ads Manager on a Cost Per Conversion level but that his Spotify and Instagram growth as of late appears to be appreciably similar to past results.)

8Measuring streams directly via on-platform audio ads

For Maxime Trippenbach, who records as maxime., Spotify Audio Ads – which allow songs to play for up to 30 seconds – have provided an effective alternative to social-media ads; one that can actually provide a direct Stream result. But these ads have also returned results that transcend calculable ROAS: “On my last Instagram live stream, probably a dozen people told me they had discovered me through Spotify ads, and dozens of people have left comments on my YouTube videos saying the same thing,” he says.

maxime youtube comment

[Source: maxime.]

In total, maxime. estimates he has added several thousand Spotify profile followers via Spotify Ad Studio and directly-attributable streams in the hundreds of thousands. (In fact, using back-of-the envelope math, between streams in Ad Studio and seemingly resultant increases in algorithmic playlists like Discover Weekly, certain maxime. Spotify ad campaigns seem to have even produced a positive ROAS, something more or less unheard of in the context of social-to-streaming campaigns.) 

maxime daily spotify follower delta

[Source: maxime.]

9Using machine learning to infer streaming attribution data

Elsewhere, folks are trying to bridge the gap between streaming and advertising data by using predictive modelling. Wavo’s Monika Sharma, who has a Master’s Degree in Machine Learning, is part of a team working on an R&D project called the Lift Model. “Machine learning is a specific branch of artificial intelligence, which is a broad science that deals with making machines smarter. Specifically, machine learning is the ability to learn from and improve through data representing past experiences,” she says. 

Wavo’s website explains the Lift Model in this way: “Global artists have multiple marketing campaigns active at all times. But without the ability to isolate paid marketing lift from external influences like fan-generated content, it’s hard to know whether ad spend truly moves the needle. A lift analysis provides a powerful way to quantify the value of music advertising on an artist’s business, independent of all other activity. Using a mix of historical data sources, a lift analysis works by forecasting two possible outcomes—the change in key business metrics over time, both with and without ad spend—then calculating the difference in performance between them, which represents lift.”

Wavo lift model

[Source: Wavo]

10Digital advertising best practices for music

Needs has worked with and around digital ads for close to two decades, having held several major label roles. She says she has for years held the belief “ad strategy doesn’t have to be complicated.” She suggests that music marketers “build a retargeting base [using] high-performing organic content.” 

Doing this across multiple content pieces (e.g. a single or music video release) with a long-term plan towards a larger event down the road (e.g. an album or ticket sale) is key, she says.

“​​Fans [generally] don’t want to be served ads on socials to click out to a streaming platform.

They want to engage with great content, be reminded or introduced as to why they love the artist and then find their way back to the music at the right time and place in their lives. Consumers might be looking at their socials on the bus, in the bathroom, on the sofa with their parents – there’s a hundred reasons why it’s not the right time to listen to music. Engage them and remind them multiple times in interesting ways and they will find their own way back to the artist in their lives.”

Beyond thinking critically about the link between digital ads and streaming, speaking for a moment from the perspective of an erstwhile full-time music advertiser for three and a half years, there are a few other straightforward best practices that allow music to shine in digital ads and tend to improve performance across the board:

  1. Creative: The number one driver of advertising effectiveness, according to Nielsen. In particular, compelling, artist-led content wins the day (e.g. Spotify Audio voiceover from artist themselves); HQ video footage like official music video clips featuring artist’s face or DIY talking-to-camera-style (e.g. TikTok-esque storytelling or Behind The Scenes) videos beat out a static image every time.
  2. Benchmarking: If using and marrying media goals with business goals to set and measure campaign results is step one, benchmarking is step two – understanding how results actually compare to other campaigns by geography, genre, artist and so on. Benchmarking allows marketers to identify commonalities (e.g. creative formats) among top- and under-performing campaigns and adjust tactics accordingly.
  3. Targeting: Focusing on audience reengagement and super-serving existing fans is another way to increase cost-efficiency – a core idea being that fan retention (to the extent there are fans to retain, of course) can be up to 5x cheaper than fan acquisition, per Nielsen.
Percent sales contribution by advertising element pie chart

[Source: Nielsen]

11Takeaways

The lack of streaming attribution data is a longstanding problem within the recorded music sector that has been compounded by poor, or at least misaligned, digital ad campaign strategies. 

Perversely, pressures to report on secondary metrics (like clicks) in the absence of this streaming data have led many an unwitting music advertiser to focus on approaches that in fact drive fewer streams than their at-a-glance less attractive alternatives (like a focus on ad viewership or conversions campaigns that drive fewer but better quality clicks). 

But there are at least three approaches to digital advertising that the recorded music sector can leverage to increase its yield, and therefore meet its duty to artists : (1) avoiding CPC objectives when utilising social-media ads; (2) leveraging on-platform DSP ad formats with streaming data; and/or (3) building or making use of models to infer streams from ads.

As the ethical discussion around record contracts progresses towards its climax and increasingly reaches public consciousness (rightly so), the advertising money that is spent on artists – and especially unrecouped artists – should be put under the microscope to ensure accountability. In doing so, the music industry can start to turn ads into, and think of them as, a revenue-generating business line instead of a cost centre.

Will the tentative resumption of public life change anything with respect to the importance of digital advertising? Jeff Green, CEO of the publicly-traded ad tech firm The Trade Desk, raises a good point in a CNBC article, noting “Everybody becomes more data-driven and more agile during a recovery, because every dollar has to count.” 

For the sake of artists, let’s all hope the recorded music sector endeavours to follow that advice.

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