In 2014, digital music downloads and subscriptions surpassed CD sales for the first time, according to The Wall Street Journal. It’s no secret that marketers know they can find the elusive, tech-savvy millennial generation on these platforms. Spotify, Pandora and other music aggregates are drawing in millennials across the world, but one question that remains: how impactful is this platform for targeting 18- to 24-year-olds?
According to AdWeek, Spotify recently launched playlist targeting that amasses like-minded listeners for advertisers. Similarly, iHeartMedia launched a programmatic marketplace for advertisers to buy radio spots, while consolidating local radio stations to harness a national reach. Pandora is also offering brands the opportunity to programmatically buy based on specific demographics. These new advances only improve efficiency in brands’ reach.
18- to 24-year-olds are the most predominant age group of Spotify users, according to Statista. That fact alone is compelling for advertisers hoping to reach this demographic. For students of this age group, however, Spotify offers premium listening for a discounted price of more half the regular monthly subscription cost. In addition, other Internet radio sources, such as SoundCloud and 8tracks, offer listening with little to no advertising. Knowing this, it’s hard to ignore that a significant portion of YAYA consumers may not even receive messaging at all.
Currently, the majority of Internet radio users take advantage of sponsored listening rather than ad-free premium subscriptions. Of the free Internet radio users who are between the ages of 18 and 24, 54% had a positive response and 32% can remember at least one of the ads, according to Mintel. When comparing terrestrial radio, 58% had a positive response, but only 28% could remember at least on the ads. With terrestrial radio, they were also less likely to discover new products or services they would like to try.
Coupled with Internet radio’s large user base and sophisticated demographic targeting ability, it’s safe to say that it is a useful vehicle for delivering messaging. Although Internet radio is more effective than terrestrial radio, the amount of 18- to 24-year-olds with ad-free radio subscriptions is concerning to brands. As proven by our State of the YAYA report, YAYA consumers want to be spoken with rather than spoken to. To accommodate this desire, branded playlists and banner ads can create a friendly relationship with 18- to 24-year-olds by allowing them to enjoy their favorite playlist without disturbances.