iTunes Radio launched in September with heavy sponsorship including multiple brand agreements of $10 million or more. Such commitment is a response to both Apple's many strengths and the potential reach of iTunes Radio. In its first month iTunes Radio had 20 million listeners but that figure hasn't yet been updated. However advertisers are weighing in on their initial campaigns with a positive response to date, an important early milestone for the new ad-supported web radio service.
iTunes Radio clearly has a lot going for it from the iTunes brand and audience to the reach of Apple devices. But the battle between music services may be won by ad divisions as ad-supported services become a larger part of the mix.
Numerous big brands committed millions to iTunes Radio ads for the launch.
As PepsiCo's CMO for global consumer engagement Frank Cooper noted:
"We've worked with all of them [i.e., music services]...We looked at the devices Apple has and the number of subscribers that they have overall on iTunes. Just in terms of infrastructure, we think they have the chance to be the biggest."
Since then Apple has shifted the focus of its iAds team to advertising sales for iTunes Radio.
Advertiser Response Is Positive To Date
So far marketers seem satisfied though their "wish lists" include such items as "more granular ad-targeting options than the standard parameters like age, gender and zip code."
Chief digital officer Ben Winkler shared the response to OMD campaigns for such advertisers as Pepsi and Nissan who were surprised by the mobile response:
"The results so far are right on target...We thought it would be a good chunk from mobile. When we first put [campaigns] together, I don't think we expected two-thirds [of users] from mobile. By the time this thing rolled out, two-thirds felt right."
Phil O'Connor, Nissan Director and Chief Marketing Manager, stated:
"We were able to reach the impression loads that we had targeted to reach, and that's with protections like not overloading any individual with too many ads...which would suggest that their growth was good."
Most advertiser agreements run only through 2013. At this point Apple not only needs continued audience growth but as Adam Shlachter, Senior VP-Media at DigitasLBi, put it:
"Everyone is waiting to see what their impact is against the competition, whether or not Apple can establish or take share from any other platform. Based on that you will see people migrate budget."
- Apple's iAds Team Switches Focus From Apps To iTunes Radio
- iTunes Radio: 2 Billion Songs, 20 Million Users Since September Launch
Hypebot Senior Contributor Clyde Smith (Twitter/Facebook) is building a writing hub at Flux Research. To suggest topics about music tech, DIY music biz or music marketing for Hypebot, contact: clyde(at)fluxresearch(dot)com.