SoundCloud opens up revenue share

Photo: Shutterstock.

This story was delivered to BI Intelligence “Digital Media Briefing” subscribers. To learn more and subscribe, please click here.

SoundCloud has opened the doors for more creators to join its On SoundCloud revenue share program.

The program previously worked on an invite-only basis, with partners selected manually.

This process has now been enhanced by streamlining applications and automating acceptances – enabling SoundCloud to invite more creators, more quickly, as described on the company’s blog.

SoundCloud’s ad offerings span audio, video, promoted content, subscription giveaways and exclusives. The company also offers a native solution that can appear in a number of ways, as playlists, tracks, podcasts, and profiles. A number of top-tier brands across a range of industries – from Pepsi and Red Bull, to 20th Century Fox and Netflix, Amazon, Sonos, and Ford – have partnered with SoundCloud on local and multi-market campaigns.

The expansion of On SoundCloud to share more revenue with more people will benefit SoundCloud creators, advertising partners, and the company itself by creating:

  • More opportunities for creators. Making it easier to join On SoundCloud opens up financial incentives for the more than 12 million creators heard on the platform every month. Everyone from bedroom producers and podcast creators, to superstar artists, large publishers and academic institutions will have a strong reason to step up their SoundCloud game.
  • More choices for advertisers. Having more creators on board On SoundCloud means there’s more content for marketers to run their ads against. This opens up choices for operating more fine-tuned and tailored campaigns, and opens up new ways to reach diverse, segmented audiences.
  • More revenue for SoundCloud. The above points are part of a formula that generates more revenue for SoundCloud. If SoundCloud obtains more quality creators in its On SoundCloud program, it’s better placed to attract more advertising clients. Ultimately, opening up its ad revenue share program is a move that should boost SoundCloud’s bottom line.

SoundCloud is particularly excited about vertical video ads, which recently debuted with HBO as a launch partner. Video ads on SoundCloud widen the opportunities for advertisers to reach a highly engaged and influential audience – many of whom are millennials, according to Peter Diamond, the company’s head of Brand Partnerships. SoundCloud is also well-placed to capitalize on the shift of ad dollars to mobile, where it sees 85% of traffic.

Video is becoming an increasingly important medium for advertisers. Total spend on the format reached $3.9 billion in the first half of 2016, rising 51% year-on-year, according to the IAB. Mobile drove the bulk of this growth. It’s up by a remarkable 178% since the first half of 2015, whereas to desktop video which grew by a more modest 13% year-on-year.

Dollars are increasingly flowing from traditional ads to digital, as strong growth in mobile, video, and social spending continue to change the face of the US media market.

Over the next five years, marketers will especially embrace mobile. Mobile will drive up spending on video, search, display, and social, and propel the migration of ad dollars away from traditional media, including newspapers and magazines.

BI Intelligence, Business Insider’s premium research service, has compiled a detailed report that forecasts spending trends for the major digital ad formats — including search, display, and video — and mobile vs. desktop. It also examines trajectories for social ad spending and programmatic ad buying, which cut across digital formats. Finally, the report looks at how spending on traditional media formats will grow or contract over the next five years, as digital, and particularly mobile, rises.

Here are some of the key takeaways from the report:

  • Mobile will be the fastest-growing advertising channel and buoy spending on each of the digital formats. US mobile ad revenue will rise by a 26.5% CAGR through of 2020.
  • Digital video ad spending is rising faster than search and display. US digital video ad revenue will rise by a CAGR of 21.9% through 2020.
  • Mobile search will overtake desktop search ad revenue by 2019. Mobile search ad spend will rise by a 25.2% CAGR, while desktop search ad revenue will decline during the same period.
  • Mobile display ads, including banners, rich media, and sponsorships, will overtake desktop display-related spending even earlier, in 2017.
  • Social media ads, which cut across display and video, are seeing fast adoption. US social media ad revenue, which includes video and display ads, will grow by a CAGR of 14.9% through 2020.
  • The rapid embrace of programmatic ad-buying tools is fueling a dramatic uptick in the share of digital ad spending coming through programmatic channels. Programmatic transactions will be a majority of total US digital ad spend this year.
  • Unlike digital, traditional ad revenue will remain flat overall through 2020. Total traditional ad revenue will rise by a CAGR of just 0.4% between 2015 and 2020.

In full, the report:

  • Forecasts ad revenue for emerging digital ad channels and formats like mobile, video, social and programmatic over the next five years
  • Explores why ad revenue is flowing from desktop to mobile
  • Examines the stagnation of traditional advertising channels like TV, magazines, and newspapers

To get your copy of this invaluable guide, choose one of these options:

  1. Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> START A MEMBERSHIP
  2. Purchase the report and download it immediately from our research store. >> BUY THE REPORT

    Business Insider Emails & Alerts

    Site highlights each day to your inbox.

    Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.