Targetspot Enters The Next Phase Of Its Life
I've written about our investment in Targetspot here and on the USV blog before so many readers know how I feel about the potential of online audio advertising.
Of all the major offline advertising categories, audio is the least developed online. But that is changing very quickly. Earlier this week Pandora announced that they have partnered with Katz, a Clear Channel subsidiary, to sell their online ad inventory. Since Pandora is a leader in "pure play" online radio (as opposed to terrestrial radio delivered over the internet), this is likely to be a watershed moment that will lead most other "pure play" online radio companies into audio advertising.
And that's where Targetspot comes into play. Targetspot is the first and the largest advertising platform and network for online audio. Many of the leading terrestrial radio stations and some of the pure play online radio providers already use Targetspot to monetize their online streams.
For the first two years of its life, Targetspot toiled almost alone in the audio advertising business, building its market leading technology platform, network of radio station and online audio partners, and growing its sales capability. Now stage two begins, the development of a large online audio market. This year online audio will maybe be $250mm worldwide. I believe it will be north of $1bn in a couple years. This is a market just about to take off.
And so it is fitting that Targetspot is announcing today that it has added a new CEO, Eyal Goldwerger, to lead it through this next phase. Eyal is a veteran of startups and online advertising and brings the perfect blend of growth management skills, tech savvy, and business development capabilities to the company. I am very excited to work with him.
Targetspot is also in debt to its founding CEO, Doug Perlson, who guided it from an idea and a prototype, to the leader in an emerging new online ad market. Doug is already busy launching a new company which I expect he will announce shortly.
If you have a business that involves online audio content, you should be talking to Targetspot. If you want an introduction to Eyal, contact me and I'll put you in touch.
Music is unlike most other forms of entertainment. It complements one’s life without requiring exclusive immersion (like movies, etc.). It makes walking, talking, drinking, and eating better.People can be very vulnerable and open when listening to music so advertising without intruding is an artform.
True but its also true that radio has been monetizing (and over monetizing recently) with audio ads for a long time and listeners understand the model
So some of the expectations for audio ads are already in place for older generations. I just see trends going in the opposite direction, against intrusive ads – i.e. Tivo, other DVRs, iTunes, etc.Forcing old models on new media channels might be painful. I’d rather pay a penny per song than listen to a few minutes of ads every half an hour.
I agree about the need for new models and this is an old oneBut I think you are in the minority in prefering paid listening to free. Satellite radio learned that the hard way
I’m not totally sure. It is the moments that I care about the music that I will pay dearly for it. There are just too few moments and not enough music like that.
It feels like a less obvious play for USV but I’m sure you’ve thought about it much more than I have. It’s probably impossible to make non-intrusive audio ads but I still believe the model will need to be augmented in some way to fully succeed.
Doug Perlson is a good guy, sorry to see that he will not be with the company if/when they cross the goal line. There’s nothing more exciting for a founder than that feeling.
This is another part of the addressable media toolkit for advertisers – online audio broadcasts. Exciting to see these companies move along.
Congrats to Doug on getting the company to this stage as the leader in this market and good luck to the new team at TargetSpot.I’m excited for his next gig and glad that he and his team are getting the recognition for the pioneering work they’ve done.
Any chance you pitched Targetspot to Spotify while you were in Stockholm 😉
I did not but I should have
Here’s a little story I would have liked to read today:”Union Square Ventures and Fred Wilson announced today that they participated in Spotify’s latest financing round. After visiting the team in their Stockholm offices last week to negotiate the final terms of the agreement, Fred also announced a partnership deal between Spotify and Targetspot and added “All is set for a US roll-out”. Asked why he decided to invest in one of Europe’s hottest startups, he replied: “Are you serious? Go have a look at fredwilson.fm and look for the content posted there, that’s why.”:)
Spotify is well beyond my sweet spot in terms of scale of the business and valuation. Daniel and his colleagues have done a terrific job all around
Agreed. Really looking forward how they’ll manage the US launch and the reaction in terms of pro sign-ups.
The keys for the success are their growing catalog and the rather fast client.Response times are very good compared with Pandora and last.fm even if they have similar catalogs.Lets hope it is built for upscaling both catalog and new countries. I have seen one system built for handling modest catalog but when the catalog grow with a factor 200 it couldnt handle it. They are out of business now.One streamer that failed with the catalog would be Joost. Now we just wait what Woddler can do.
So what’s Google doing?
What you’d expect them to do. Working on a self serve performance oriented marketplace model
I’ve loved following this industry – with mixed feelings. I’m a recovering 2nd generation broadcasters (having sold the family stations early 2000.) While my timing in selling was almost perfect, I still miss broadcasting.The secret ingredient will be the creativity of the ads. I personally believe that poor quality commercials helped lead to the downfall of radio… (And, perhaps the current decline of network television – the Daily Show with John Stewert has a bright, upscale audience – why, oh why does Comedy Central insult us with cheesy Male Enhancement ads?)Make the ads great – entertaining and informative – never satisfy for less than fantastic – and you’ll succeed. Play monotone, hard sell crap copy, and you’ll drive away people in droves.There are still some fantastic people working in radio copy writing and production – find ’em, pay them and empower them.
Good point. I love good radio ads and hate the bad ones
I love your comment! Sometimes good ads make you want to hear them again. Actually the same can be said about ads across all media….
Call me old school. Although I am used to listening to radio without ads, I would prefer not to have them in! Especially if they are repetitive. Hope fully you will discover another model to pay for this service.
There are many models out there. Surely there’s one without ads for you
I’m sure Target Spot looked at this deal. http://www.techcrunch.com/2…
Nope. Those are terrestrial radio assets
Worth noting that VoodooVox is seeing a similar inflection point with audio advertising inventory in the telephonic space, in which they’re the market leader. Their model allows telephone services (calling cards, VOIP) to reduce cost to user by adding a short audio ad while the call is connecting, which the user can respond to via their phone. Given the advertising industry’s increasing focus on demonstrable ROI, this direct response approach has been quite successful. (full disclosure: Village Ventures is an investor)
Yup. Neat company
It’s great to see that the audio advertising business is gaining momentum like this via support from you and others. And kudos to Doug and team at TargetSpot! I’ve been an audio advertising publisher for the past 3-years and was introduced to Doug when he was first starting TargetSpot. It’s taken a while to get advertisers to embrace our audio content/format (a real advertising paradigm shift), but RH Brands’ success is another example of the potency of audio (in-call) advertising — and more importantly, the future of the category. We’re on track for more than 80-million inbound calls this year and we serve a LOT of audio offers in our content. I welcome feedback from you or any of your readers and look forward to continued growth and success together. Thanks. Bryan