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Bringing “2.0” to the Digital Music / Advertising Relationships

Bringing “2.0” to the Digital Music / Advertising Relationships. Claire Levy Former Head of Business Development, Last.fm May 24 th 2008.

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Bringing “2.0” to the Digital Music / Advertising Relationships

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  1. Bringing “2.0” to the Digital Music / Advertising Relationships Claire Levy Former Head of Business Development, Last.fm May 24th 2008

  2. “Web 2.0 is a term describing the trend in the use of World Wide Web technology and web design that aims to enhance creativity, information sharing, and, most notably, collaboration among users. These concepts have led to the development and evolution of web-based communities and hosted services, such as social-networking sites, wikis, blogs, and folksonomies.” - Wikipedia, May 18 2008 “Web 2.0” websites that we all love

  3. Web 2.0 sites: overview • Very large sites (Myspace 100mm+ unique user / month, Facebook not too far behind and growing quickly, etc) • Strong understanding of who their users are and what they are doing on the site • Emulation: sites / brands that were not designed as online community tools are adapting their approach (eg, Lego, New York Times, etc.)

  4. Web 2.0 sites: how does advertising fit in? • Monetization

  5. Web 2.0 sites: how does advertising fit in? • Need large and active user base in order to: • Generate interesting content • Continue on growing (organically or through partnerships – user base key driver for valuation) • Generate revenue • Monetization …but • Do not want to risk losing: • users (internet users are not a captive audience), • content (UGC content) • and revenues (from future advertising and other revenue streams) • So must be careful about approach: formats, content, brands

  6. Retail remains an important revenue consideration for music websites Sales can be enhanced by promotions Beyond (and ultimately enhancing) monetization: offers a more complete experience to the user Additional Web 2.0 revenue models Example of Last.fm - Ecommerce

  7. One existing subscription model: GBP1.5 / month / user for personalized radio A second one that has been announced for an on-demand service Beyond (and ultimately enhancing) monetization: offers a more complete experience to the user Additional Web 2.0 revenue models Example of Last.fm - Subscriptions

  8. Partnerships span the globe with companies such as CBS, Spiegel, Livejournal, BBC, Bebo, Netlog, etc. Beyond (and ultimately enhancing) monetization: offers a more ubiquitous experience to users of Last.fm and of partners extends the Last.fm brand beyond the site Additional Web 2.0 revenue models Example of Last.fm - Partnerships

  9. Advertising for Web 2.0 sites – Enhancing the user experience • No need to reinvent the wheel, learn from your partner what makes their users tick • An advertising experience seen as relevant added content or functionality is positive • This can be your own content or that of your partner’s • Requires more creative resources and upfront commitment to a publisher

  10. Relevant content for Last.fm users- Using the Last.fm recommendation system

  11. Relevant content for Last.fm users- Using the Last.fm radio player

  12. Web 3.0: Thinking ahead • “If I were to guess what Web 3.0 is, I would tell you that it's a different way of building applications... My prediction would be that Web 3.0 will ultimately be seen as applications which are pieced together. There are a number of characteristics: the applications are relatively small, the data is in the cloud, the applications can run on any device, PC or mobile phone, the applications are very fast and they're very customizable...” - Eric Schmidt, CEO of Google, Seoul Digital Forum, May 2007 (Wikipedia May 18 2008) • Emulation: sites / brands that are not “open” may have to rethink their values (e.g. Apple iPhone)

  13. Back to music: Push towards more integrated campaigns across platforms Worldwide Music Spending by Segment 2006-2011 ($ in billion) Source: eMarketer, 11/07

  14. Review • Publisher and advertisers must keep the best interest of the users in mind in order to deliver high performing campaigns: • Continually enhance the user experience • Leverage the strengths of the website and its core functionalities • Capitalize on the knowledge of user tastes by targeting campaigns, adapting content to local markets, etc. • Continually think about how to tie a campaign to the different platforms where the users are found

  15. Questions? claire@disconoir.com

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