Webrazzi Digital 2013 The Global Market for Digital Audio
Advertising Karnaval.comAli A. Abhary CEO Spectrum Medya
Copyright 2013 by Spectrum Medya Labs Internte Hizmetleri Tic.
A.S. All rights reserved. No part of this publication may be
reproduced, stored in a retrieval system, or transmitted in any
form or by any means electronic, mechanical, photocopying,
recording or otherwise without the permission of Spectrum Medya
Labs Internet Hizmetleri Tic. A.S. This document provides an
outline of a presentation and is incomplete without the
accompanying oral commentary and discussion. COMPANY
CONFIDENTIAL
Confidential
Contents
The Global Market for Digital Audio Advertising The Context The
Audience The Advertisers The Publishers
Karnaval.com
Confidential
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The 4 Golden Ages of RadioThe past 80 years of radio have been
marked by 4 Golden Ages each of which was the outgrowth of the
introduction of new, disruptive technologies.
Entertainment shows Radio theater News programmingDisrupted by:
TV
Talk Radio on AM Music Radio on FM
Disrupted by: Internet
1930s 1950s
1960s 1970s
1980s 1990s
Today
Disrupted by: FM
Courtesy of: Kurt Hanson
AM radio Music-focusedConfidential
Internet radio streaming Mobile listening3
The 4th Golden Age of Radio Key CharacteristicsThis latest
Golden Age is marked by 4 key characteristics: increase in content
variety; shorter and less obtrusive ad breaks; ubiquity of access;
and personalization.
VarietyHEAD Top 40 AC News / Sports
Shorter Ad Breaks
Unlimited spectrum Increased in variety of content offerings
Tailoring needs of the long tail of consumer taste
3 or 4 spots per hourShorter spots (< 30 seconds) Less
intrusive for listeners; greater impression for advertisers
Popularity
TAIL: 70s Disco, Bluegrass, Latin rap Available Spectrum
Ubiquity Availability wherever there is connectivity Device
agnostic 3-4x more devices today deliver radio than 10 years
ago
PersonalizationSkip songs Ban artists Time-Shift Social music
sharing with friends and likeminded individuals
Courtesy of: Kurt Hanson
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Contents
The Global Market for Digital Audio Advertising The Context The
Audience The Advertisers The Publishers
Karnaval.com
Confidential
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Online Radio Listening US ExampleConsumers throughout the United
States have taken up online radio, with listening expected to reach
over 60% of the total population within the next 3 years.
Number of people that have listened to online radio in the past
month (US population 12+, millions)200 180 160 140 120 100 80 60 40
20 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
2014 2015
18664% of Population (12+ years of age)
Source: Arbitron; Triton Digital
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Online Radio Listening UK ExampleEuropean consumer behaviour is
also following the same trend, with one-third of all British radio
listening coming from a digital platform. Distribution of listening
hours across analog and digital platforms, the 12 months to Q2:
2009-2012100.00% 19.60% 80.00% 12.80% 10.80% 7.90% 7.20% Digital
Unknown Analog 40.00% 67.70% 20.00% 66.60% 66.30% 63.30% 22.70%
25.80%
29.50%
60.00%
0.00%
Q2 2009
Q2 2010
Q2 2011
Q2 2012
Source: Ofcom
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Online Radio Listening German ExampleAnd the German market is
rapidly adding new online radio content sources, with over 3,000
different online radio stations broadcasting nationwide.
Number of online radio stations in Germany (2006 2012)3500 3,064
3000 2,692 2500 1,914 1,600 1500 3,021
2000
1000 450 521
500
0 2006 2007 2008 2009 2010 2011 2012
Source: Goldmedia Webradio Monitor 2012
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Online Radio Listening Pakistani ExampleThe trend is not limited
to developed countries naysayers should look no further than
Pakistan, where 30% of men said that they use their mobile phones
to listen to radio.
Pakistan: Radio listening locations % of people who said they
had listened to radio in the following locations80% 74%70%
60%
57%
50%
40% 30% 30% 20% 20% 8% 5% 0% 0% Home Work Car Elsewhere (caf,
shop) Mobile Phone 4% 3% 4%
Men Women
10%
Source: BBC Pakistan Survey of Adults 15+ (n=1172 weekly radio
listeners)
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Online Radio Listening Turkish ExampleAnd, predictably, the
trend is also seen here in Turkey with almost half of all listeners
accessing radio via a digital device.
Average monthly reach of radio listeners via Internet / MP3
Player / Mobile Device (000s people)10,0009,000 8,000 7,000 6,000
5,000 4,000 3,000 2,000 20% 1,000 0 2004 2005 2006 2007 2008 2009
2010 2011 2012 23% 22% 30% 36% 41%
44%
47%
47%
% of total radio listeners
Source: RIAK / Ipsos
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Online Radio Meets Consumer DemandsConsumers worldwide are
listening to radio via the internet because online radio enhances
the traditional linear listening experience, creating a richer
experience for consumers. It is not simply repurposing the
terrestrial listening experience. The Reasons for Listening to
Online Radio (US Consumers)To listen to audio you cannot get
elsewhere 19%
To control or choose the music being played
18%
More music variety
15%
Fewer commercials
15%
To get a clearer signal than over-the-air radio
13%
Less DJ chatter
6%
Because it's new 0% 2% 4%
5% 6% 8% 10% 12% 14% 16% 18% 20%
Source: Arbitron / Edison Research
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Contents
The Global Market for Digital Audio Advertising The Context The
Audience The Advertisers The Publishers
Karnaval.com
Confidential
12
Global Addressable MarketOnline radio is vying for a global
market of over $55B in annual advertising expenditures composed of
both online and broadcast expenditures. Addressable Global
Advertising Market (F2011) Estimates for online (display / mobile /
rich media / video) and broadcast advertising
Source: Morgan Stanley, IDC 2011
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US Addressable MarketIn the US, ad dollars for online radio are
sourced from a combination of online advertising; broadcast ads;
and mobile ad markets combined markets which are forecasted to grow
12% annually over the next several years.
US Addressable Advertising Market (F2011)$37B Broadcast Radio
Advertising $30B Online Advertising* $26B $24B $33B
$13.4B $9.8BMobile Advertising
$0.9B* Display / mobile / rich media / video
2010
2011 Broadcast Ads
2012 Online Ads
2013 Mobile Ads
2014
Source: Morgan Stanley, IDC 2011
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US Internet Radio Advertising RevenuesThe US has already
established an online advertising market for audio-streaming
publishers worth half a billion dollars annually. The 2nd largest
mobile ad publisher in the US is Pandora. Estimated 2011 US online
ad spending, Directed to streaming audio market (in millions US
dollars) US Net Mobile Ad Revenues By Company, 2011-2012
(millions)2011 Google Pandora FM/AM Radio Broadcasters $131.6
Twitter Millenial Media Newspapers $62.9 $550M Overall Magazines
$45.4 Apple (iAd) Facebook Other* Total $750.0 $120.0 -$40.1 $38.3
-$502.3 $1,450.7 2012 $1,423.1 $226.7 $129.7 $84.1 $75.1 $72.7
$600.2 $2,611.3
Online-only players
$295.0
Note: includes display (banner, rich media, and video) and
search * Includes other ad networks and publishers
Cable / Satellite
$12.9
Other Print
$2.1
Source: Borrell Associates, Wall Street Journal, e-Marketer
(Sept. 2012)
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Broad Advertiser AdoptionAdvertisers across segments and of all
sizes have adopted digital audio advertising as part of their media
buys across the United States. Brands using digital audio
advertisements in past 12 months (US market)
Auto Brands 9 of top 10 marketers
Retailers 9 of top 10 marketers
Restaurants 9 of top 10 marketers
Financial Services 8 of top 10 marketers
Telecom 7 of top 10 marketers
Source: IAB
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Digital Audio Advertising EffectivenessBrands are turning to the
immersive advertising experience aural plus visual with
call-to-action of digital audio because it is delivering measurable
results versus static internet advertising
18% 16%
INTERNET RADIO Listeners10%8% 6% 5% 5% 9% 11%
15%
8%
2.7x4% 3%
INTERNET ONLY Users
3x2% Became a "fan" on social network
5x1% Called for information 1% Sent email / text
Purchased Purchased Clicked on an ad product / service product /
service online at retail
Visited advertiser's website
Searched for more information online
Source: Targetspot / Park Associates Digital Audio Advertising
Impact Study for IAB (2012)
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Key Features of Digital Audio AdsThe unique characteristics of
digital audio merging the best of traditional radio and online ad
properties are the key features driving higher recall and
advertiser performance.
By station audience
Registered users by demographicsGeographic targeting Device /
time of day Real-time measurement Cost-per-listen pricing models
Accountability in audio
Targetability
Measurability
Call-to-Action
Audio ads synchronized with banners, rich media Pageskins /
videos Context-based (user click, action, song change, station
change)
Immersive Ad Experiences
Audio calls to action reinforce banners Increased immediacy of
response to audio prompts
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The Connected Car A New Venue for Digital Advertising?Pandora,
iHeartRadio and other streaming publishers have integrated to
connected cars providing consumers access to online radio in their
cars, and digital advertisers the opportunity to reach consumers
via the dashboard / soundsystem of automobiles for the first time.
Pandora is now fully integrated into Over 50 models of automobiles
across all major makes Usage of Pandora In-Car (% Used in Past
Month by Age Group)19%
1 in 5 18-24 year-olds are using Pandora in their cars.
7% 6%
3% 2% 1%
18-24Source: Arbitron
25-34
35-44
45-54
55-64
65+
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Contents
The Global Market for Digital Audio Advertising The Context The
Audience The Advertisers The Publishers
Karnaval.com
Confidential
20
Music Lockers vs. RadioIt is important to distinguish between
music locker services (how we keep our music collections) and radio
(how we connect to the world around us) Music Lockers Radio
Definition How we keep our music collections
Definition How we discover new music, connect with the world
Technology Disrupted by frequent new technologies Each new
technology is substitutive
Technology Slow technological change Each new technology is
additive
Role of Brand Brand neutrality
Role of Brand Brand loyalty
Listening Experience Walled-off from the rest of the world
Solitary Proprietary closed-loop
Consumers unwilling to accept advertising in this context
Listening Experience Connected to the rest of the world Social
Discovery of new music Relationships with personalities News and
local information
Consumer license / willingness to accept advertising
45 years
110 years
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The Models of StreamingBroadly-speaking, there are 5 key
categories of music streaming publishers operating globally
today.
STREAMING MODEL Music Lockers
SUB-SET On-Demand Services
DESCRIPTION Broad selection of tracks Significant royalty costs
Freemium models Little consumer acceptance for advertising Little /
no non-music content Un-curated Repurposing of terrestrial stream
Simple listening experience Not unlike car stereo
Radio
Basic Broadcasters
Aggregators
Thousands of station choices, across country / world Simple
listening experience (interoperability problem) Ideal for world
travellers keeping in touch Paradox of Choice problem Targeting
music selection based on consumer preference Limited non-music
content Arguable not radio
Personalized Radio
Rich Radio
Reinforces curated and mediated nature of radio Across multiple
genres to capture broadest audience Augmented experience beyond
simple listening (personalization, timeshifting, artist
information)
Confidential
Global Examples of Streaming Music ModelsFrom large
publicly-traded companies, to small start-ups, to divisions of
businesses in other industries a number of different approaches
exist towards streaming music around the world.INTERNATIONAL
TURKISH
Spotify
Last.fm
MOG
TTNet Muzik
Turkcell Muzik
Fizy
MUSIC LOCKERS
Rhapsody
Rdio
BASIC BROADCASTERS
AGGREGATORS
PERSONALIZED
RICH RADIO
CBS Radio
Kral FM
Pandora iHeartRadio Tune In
Accuradio
NPR Music Absolute Radio
RADIO
iHeartRadio iPower
Karnaval
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Apple Market Entry?Reports have circulated that Apple is
planning to launch an advertiser-supported internet radio service
in 2013 to compete with Pandora, iHeartRadio and others.
Likely launch in Q1 2013 Digital audio advertisingsupported,
personalized radio service Likely to raise the bar for user
experience Positive long-term impact on growing demand for digital
audio advertising
Confidential
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Contents
The Global Market for Digital Audio Advertising The Context The
Audience The Advertisers The Publishers
Karnaval.com
Confidential
25
The Market Opportunity in TurkeyDigital audio advertising in
Turkey addresses a combined market worth over 400 million TL
annually, but which is currently dominated by players that are
unfriendly environments for advertisers owned by brands
themselves.
Turkish Addressable Advertising Market (F2011)
Existing Streaming Music PlayersPlayer Description
287M TL
Online Advertising*
414M TL Overall
Search engine Owned by Turkcell On-demand platform GSM operator
On-demand platform Owned by TTNet ISP On-demand platform GSM
operator
Broadcast Radio Advertising
121M TLMobile Advertising
On-demand platform GSM operator On-demand platform Beer
company
6M TL* Display / mobile / rich media / video
Were not selling mobile phones, internet service, or beer. We
are about the listening experience in and of itself. We are radio,
not a music locker.Source: Reklamcilar Dernegi, 2011
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Karnaval.com Radyodan Sonraki En Byk cat
Confidential
Ubiquity of Access Karnaval 24Karnaval has been designed with
ubiquity of access in mind across internet-enabled telephones,
computers, and consumer appliances. The access coincides with
all-day coverage be where the user is.
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Karnavals Two Complementary Listening Experiences
Lean Back
Lean Forward
Curated music streams Non-interactive Personalities and DJs to
help navigate Real radio experience News, weather, sports and
related content
Social radio experience Quasi-interactive Gives impression of
interactivity
Participation in determining music choices Gamification
elements
radio network
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Curated Stations Just Enough Choice
radio network
Karnaval aims to have no more than 20 curated radio stations
covering the broadest range of musical tastes both the head and a
substantial part of the tail of consumer tastes. Just enough
choice, no confusion.Super FM Top 40 Turkish Pop Tarkan, Ajda
Pekkan, Mustafa Ceceli, Halil Sezai
Zeplin Turkish / Foreign Independent Music Vera, Motto, Melis
Danismend, Supergrass
Metro FM Top 40 Foreign CHR Rihanna, David Guetta, Beyonce
Kantin Teen Music Carly Rae Jepsen, Jessie J, Carrie
Underwood
Joy Turk Turkish Slow Sila, Seksendort, Ferhat Gocer
Retroturk Turkish retro music (60s-70s-80s) Nesrin Sipahi, Sibel
Egemen, Baris Manco, Ayla Dikmen
Joy FM Adult Contemporary Zaz, Elvis Costello, Charles
Azanavour
Jeton Gamers radio Fuat, Manga, Tyga, Jay Sean, T-Pain,
Ne-Yo
Radio Mydonose Dance / Electronic Flo Rida, Inna, Guru Josh
Project
Borusan Klasik Classical Fazil Say, London Philharmonic, Sir
Neville Mariner
Joy Turk Akustik Turkish Exclusive Acoustic Model, Seksendort,
Hande Yener
Joy Jazz Jazz Kerem Gorsev, Dizzie Gillespie, Dave Brubeck,
Miles Davis
Efkar (March 2013) Arabesque Mslm Grses, Orhan Gencebay, brahim
Tatlses Confidential
Joy Marine (April 2013)
Lounge
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Curated Stations Rich Radio ExperienceKarnavals listening
experience has been designed to offer a rich array of audio and non
-audio content and functionality aimed at increasing user
engagement and providing a richer experience than standard
audio.
radio network
DJ Personalities, Radio-Feel
Biographies, Photos, Videos
Updated news, gossip
Pause live radio, rewind
Real Radio
Rich Artist Content
Music News
Time Shifting
News, Weather, Sports, Traffic
Giveaways, Sweepstakes
Real time Biletix integration
On Demand News
Contests
Concert Tickets
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Digital Sometimes Exclusive Jelli. Social 100% User Radio and
Partner Controlled FM-Broadcast. you Experience. want in Turkey. to
Radio. lean forward. Adding 30,000 registered users / month.
Confidential
Massive Listener Growth
Daily Unique Users
315827
54106
MAR12
APR12
MAY12
JUN12
JUL12
AUG12
SEP12
OCT12
NOV12
DEC12
JAN13
FEB13
Confidential
14th Largest Stream InternationallyStream 1 2 3 4 5 Clear
Channel Radio Digitally Imported Inc. CBS Radio Inc. Prisa Radio
Cumulus Streaming Network Average Active Sessions 284,151 102,302
75,256 73,485 70,694 Session Starts 128,174,622 * 24,399,260
37,211,655 20,485,048 Avg. Time Spent Listening 0.70 * 0.97 0.61
1.08
67 8 9
Slacker, Inc.EMF Corporate NPR Member Stations Cox Radio
Inc.
63,09232,866 32,546 31,925
33,466,4925,403,632 10,067,368 9,424,073
0.601.91 0.97 1.07
1011 12 13 14 15 16 17 18
ESPN Radio Corporate977Music.com Corporate Entercom
Communications Corp. Sky Radio B.V. Karnaval.com AccuRadio Idobi
Radio Univision Greater Media Corporate
28,58025,143 24,481 19,771 18,402 14,758 13,488 13,016
11,729
12,230,771* 9,953,316 2,930,540 7,061,648 2,304,510 1,665,776
7,821,902 2,941,415
0.74* 0.78 1.69 0.75 1.94 2.30 0.53 1.26
1920
COPEEmmis Communications
10,0119,973
4,105,2134,772,340
0.690.66
JANUARY ALL STREAMS RANKER (based on AAS) DAYPART 6:00am to
8:00pm, Monday through Friday Confidential
Total Listening HoursThe total number of hours streamed monthly
has grown over 232% since our launch.
Karnaval Total Listening Hours*
13,611,034 13,632,930 13,101,503 12,531,797
10,332,164
10,674,496
8,060,216 6,779,658
7,871,775
8,040,264
8,277,623
4,111,733
4,428,208
Feb.12
Mar.12
Apr.12
May.12
Jun.12
Jul.12
Aug.12
Sep.12
Oct.12
Nov.12
Dec.12
Jan.13
Feb.13
* Total number of hours of streaming to listeners that were
connected for a minimum of 60 seconds during a given time period.
Source: Karnaval Streaming Statistics
Confidential
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Mobile App Adoption RatesAt Karnaval we believe that mobile is
the future for online radio and our listeners rapid take-up of our
iPhone and other apps have proven us right. Today, we have over
200,000 iPhone apps downloaded representing 10% of all active iOS
devices in Turkey. Cumulative Downloads of Karnaval iPhone App
(Against Days Since Launch)160,000
140,000
120,000 Number of App Downloads 100,000Number of Days to 100,000
downloads: 29 days Karnaval.com
Number of Days to 100,000 downloads: 60 days - Hepsiburada
80,000
60,000
40,000
20,000
01 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45
47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81
Number of Days After Launch
Source: iTunes; Webrazzi 27 February 2012; Pozitron
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Karnaval Mobile Functionality and ReviewsOur success in mobile
is driven by our focus on functionality, user experience and is
proven by our users ratings and reviews.Functionality Multiple
Stations HD Sound Artist Biography Karnaval iPower Kral FM SlowTurk
Radyo App Fenomen Best FM NR 1 FM Fizy TTNet Mzik Turkcell Mzik
-
Time ShiftingOn Demand Music On Demand News, Weather Next Up
Song Song History Music News
-
-
-
-
-
-
-
Iphone AppNumber of Ratings Number of Stars 2.678 4,5 83 3,5 204
4 12 3,5 4.000 4,5 43 3 366 4,5 6 5 1551 3 1954 3 960 3
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10000000
12000000
14000000
16000000
2000000
4000000
6000000
8000000
0
* Within Turkey only Source: Topsy
Social Buzz
Total Cumulative Gross Impressions on Twitter Mentions of
Karnaval versus Competitors (2012)*
Delivering buzz in the social media is also a key measure of
Karnavals success and by this measure, the newly formed brand has
outdone established competitors over the past year.
Confidential 38
Jan 01, 2012 Jan 08, 2012 Jan 15, 2012 Jan 22, 2012 Jan 29, 2012
Feb 05, 2012 Feb 12, 2012 Feb 19, 2012 Feb 26, 2012 Mar 04, 2012
Mar 11, 2012 Mar 18, 2012 Mar 25, 2012 Apr 01, 2012 Apr 08, 2012
Apr 15, 2012 Apr 22, 2012 Apr 29, 2012 May 06, 2012 May 13, 2012
May 20, 2012 May 27, 2012 Jun 03, 2012 Jun 10, 2012 Jun 17, 2012
Jun 24, 2012 Jul 01, 2012 Jul 08, 2012 Jul 15, 2012 Jul 22, 2012
Jul 29, 2012 Aug 05, 2012 Aug 12, 2012 Aug 19, 2012 Aug 26, 2012
Sep 02, 2012 Sep 09, 2012 Sep 16, 2012 Sep 23, 2012
fizy
karnaval
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2012-2013 All Rights Reserved
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