XAPPmedia today published the first Internet radio ad load report that includes data on Apple Music. Surprise! Apple Music continues to provide an ad-supported listening option. A couple of key findings include:
- A sharp increase in ad load starting in May and continuing through August
- An ad load for Q2 and Q3 2015 that tracks closely with the industry average
- A reliance on recording artists for about half of all advertising slots
Why Focus an Entire Report On Apple Music
Since there is so much interest in Apple Music as we approach the conclusion of its 90-day free trial period, this report focuses exclusively on the new service. Many people are familiar with XAPPmedia’s quarterly Internet Radio Ad Load Reports, but those have not included Apple Music or iTunes Radio data. However, we began tracking iTunes Radio ad load in January 2015 and continued that through the transition to Apple Music. That provides us with six months of data before the Apple Music launch and two months afterward.
Beyond market interest, the report can also help put to rest the persistent myth that Apple Music is a subscription-only service. Just this week I saw another prominent industry publication refer to Apple Music as not providing a freemium tier. That is clearly incorrect. From day one Apple Music has provided an ad-supported option for consumers not interested in the free subscription service trial. Apple never talked about this but some publications such as Adexchanger pointed out the inconsistency months ago.
Next week about 50% of the 15 million trial subscribers to Apple Music will either be charged $9.99 for their first monthly payment or start hearing ads again. Apple Music ad load is relevant to advertisers, other publishers and consumers.
Apple Music Does Have a Different Advertiser Strategy
The most striking difference between Apple Music and its peers is the advertiser composition. Just about half of advertisers identified were recording artists promoting album downloads on iTunes.
The next closest services topped out at 7.7% and 0.9% recording artists respectively. This focus on artists as advertises is a clear difference between the services. A full analysis is included in the report along with a list of national advertisers identified.
Committed to an Ad-Supported Future
There is promotion, conjecture and data. The promotion of Apple Music avoided any mention of advertising and focused solely on the new subscription service. Based on this focus, the conjecture of many observers was that Apple was abandoning the ad-supported model it had cultivated for nearly two years with iTunes Radio. The data show that Apple continued with ad-supported listening even after the launch of the Apple Music subscription service and actually increased its historical quarterly ad load.
Apple Music has adopted an ad load strategy that is about one-fifth of broadcast radio and in line with practices of other streaming services. The key difference is that Apple relies much more heavily on advertisements by artists promoting album sales than its competitors.
It is not surprising that Apple Music has retained an ad-supported model to complement its subscription service. Nielsen revealed earlier this year that 95% of consumers have chosen ad-supported listening over subscription for streaming services. There is little doubt that Apple would like the opportunity to capture the attention of the 95% in addition to the subscription dollars of the 5%.
Other data in the report includes:
- Ad load by quarter and month compared to industry average
- Average ads per session
- Percent of ads segmented by ad length by quarter
- Time to first ad (TTFA) by session
- TTFA compared to industry average
- Advertisers identified on Apple Music
- Beats 1 advertiser sponsorship strategy
- Advertisers identified on Beats 1
To learn more about Internet Radio advertising practices, join iHeartMedia, Slacker, Triton Digital and XAPPmedia at Advertising Week Monday September 28th at Lucille’s in B.B. King Times Square. New York City. The panel discussion starts at 11:00am. Hope to see you there.