The audio era has arrived. Marketing spoke with brand leaders and experts to explore the new innovations and connections it brings to life.

This article was sponsored by Spotify to let readers know about its audio guide for marketers, ‘How Streaming is Unlocking New Opportunities for Today’s CMO’ »

In marketing, digital especially, the goalposts are always moving. The time for innovation is always now and a failure to keep pace with rapidly changing consumers is a surefire way to get left behind. In the age of virtual reality, instant communication, photorealistic visual effects and artificial intelligence, pushing the envelope on new media is the humble medium of audio. Or perhaps not so humble.

In May, Marketing partnered with Spotify for the Spotify Espresso Series – a pair of events designed to explore the ever-widening audio landscape, how streaming is changing our relationship with sound, how brands are finding new ways of getting closer to listeners and the complex task of ensuring transparency and privacy are at the front of every decision.

On stage, in the presence of Australia’s sharpest marketing minds, leading CMOs discussed the evolving medium, new opportunities for targeting and understanding consumers, sonic branding, measurement, and the importance of prioritising brand safety.

The forest among the trees

Megan Brownlow (pictured, far right), PWC non-executive director, opened the Espresso events with a heavy consideration: as a nation, we aren’t really getting richer. “We feel our losses more than we feel our gains, that’s just basic human psychology,” Brownlow warned. “It’s useful for marketers to understand that somewhat irrational psychology.”

Though real gross domestic product (GDP) and gross national income (GNI) figures have been increasing steadily over the past decade, not much has changed, Brownlow pointed out, when accounting for population growth. 

“This is the money in our wallets. Guess what? It’s population growth that has been pushing up our GDP and GNI. We are not getting richer. So when you get your research back that your customers are not feeling wealthy, that low wages growth has been having an impact, then that is quite rational.

“For marketers, that is such an important thing to keep in mind because you have to adjust your messaging, comms plans, everything, to keep in mind how wealthy your customers are feeling. And at the moment, the answer is ‘not very’.”

The paradoxical part of this that can be difficult for a marketer to swallow is that while wealth per capita and consumer confidence metrics are low, consumer expectations remain on the rise. In fact, consumers feeling less wealthy actually accentuates their growing expectations from businesses. 

According to Brownlow, “they will not part with their hard earned unless they get these three things:” 

Be there for me

“See those Millennials who won’t book a restaurant unless they can book it online?” Brownlow mused. “These are the requirements, the expectations that consumers have now. All devices, 24/7 availability, it’s just a standard expectation.”

Naysla Edwards, VP brand, charge cards and member experience at American Express Australia very much agreed. “I’m a firm believer that if you bring utility to consumers, and if you use their data to provide a service or benefit to them, everyone will sign up for it,” she said. 

“Think of some of the benefits we offer when Card Members arrive at the airport. If we could send them a notification that says ‘don’t forget that there’s an Amex lounge here’, I’m sure that the consumer will think, ‘this is amazing’. When we know that a person just purchased a home or they’re renovating, we can send them offers to go to Ikea and use their Amex card to leverage an offer we have there at that moment.

“For me, the personalisation, utility and benefit that we provide the consumer will make that data exchange relevant and build trust.”

Know me

If you haven’t noticed, consumers are starting to wise up about data. They’ve figured out that “the data they’ve voluntarily – or sometimes involuntarily – shared with you has value,” said Brownlow. Therefore, the onus on marketers is now heavier than ever to ensure a proper exchange of value between consumer and business. As Brownlow puts it, “they want something for that value – they want to be known.”

Not only do consumers expect an excellent experience in exchange for their data, they expect it to be seamless and comprehensive also. Whether it be an issue raised through a call centre or a query resolved through online chat; when a customer has a conversation with your brand, they expect you to remember the last time you spoke, no matter where that was. Particularly in 2019, lacking connected customer data infrastructure is painfully obvious.

Regarding the relatively explosive growth in smart home speakers in Australia, APAC marketing director at Sonos, Jacqui Moore (pictured, second from left), told the panel it appears Australians are aware of how their data is used and are reasonably comfortable with that tradeoff between privacy and utility. “You choose whether or not you buy a product that has voice-assistant capability and you choose whether to turn that microphone on or off. If you enable that voice assistant, you are giving [Sonos] permission to use certain data, including audio data.

“What we know is that Australians are really adopting these voice assistants. More and more consumers are choosing to have these devices in their homes and appear to be comfortable with the sort of data that businesses are collecting as a result of that.”

Protect me

Brownlow breaks down the business-consumer trust relationship into four parts:

• Advocacy: are you acting in my best interest?
• Consistency: have you proved credible before?
• Transparency: do I really understand what you’re doing?
• Success: do you have what it takes to help me achieve my goals?

“It’s on you,” Brownlow warned. “If I’m giving you my money, you protect me. That’s not just my data, it’s needles in strawberries. It’s everything.”

And if that’s not enough to convince you, Brownlow also explained that her research with behavioural economists has found that real trust between the business and consumer also motivates strong consumption behaviour.

“One of the challenges that we run into is a real variability in expectation,” remarked Lachlan Davidson (pictured, second from right), head of media personalisation at NAB. “There is this expectation that we know them so deeply… But then at the same time, there is this concept around the data that a bank holds on an individual that is intensely private. If you think about the difference between data that a person might share with Spotify and the data that a bank holds on a customer – [consumers] have quite different attitudes to those things.”

Davidson explained one instance where this variance came to light, “we had a great email program that went out to customers to give them insights around ‘what have you been doing? What have you been spending on? What could you do next?’ Etc. which is really valuable. 

“But some customers hated it. They said, ‘how could you put my data into an email and send it to me? it’s insecure, you can’t do that.’

“This is the trap between personalisation at scale and really deep micro-personalisation – trying to get that balance right. Where you can spend a whole heap of time, a lot of money and resources to try and make a fantastic experience for a customer. You’ve got to ask how much value that delivers back to your customer and back to the business as well.”

Brian Benedik (pictured, far left), VP, global head of advertising sales at Spotify, admitted the past couple years have been tough as digital media owners, given the uprise in data compromises. “We’ve been painted with this broad brush with trust and brand safety. We all know there’s been a lot of bumps along the way with a couple of our friends at the top here in terms of data leakage and data privacy. This has been tough and it’s continuing.

“We’re a Swedish company at heart. Those of you that know Swedish culture know it’s all about transparency – we benefit from that. Trusting people with data, trusting people with their information has always been at the core of Spotify, since day one 10 years ago.

“We offer protections for our marketing partners so if they don’t want to be near certain content we can keep them away from that.

“We actually took a big step last year with the GDPR process in Europe. It took us a year to prepare for compliance with GDPR. We said, ‘We know this regulation is just for Europe, but how about we do it for the globe?’ How about we do it for consumers in Australia, in South East Asia, in the US, even though it’s not required. Let’s give them the same type of data protections, the same type of options as Europe. So our GDPR policy is global.”

So what?

The resurgence of audio – whether it be music, podcasts or anything else – is largely responsible for driving the conversation around these issues that plague marketers’ minds. The new generation of streaming audio offers a never-before-seen granularity in customer perspective, access to the customer on their terms and a new precision for brands to choose moments of contact based on high-fidelity behavioural understanding. True personalisation at scale. “This is the real nirvana for marketers,” asserted Brownlow.

Marketers aren’t the only ones who’ve been making moves. In Australia particularly, consumers are warming up to the idea of paying for media content. “We were never a pay TV market, we didn’t have satellite radio here, we were not used to paying for content,” noted Brownlow. Take a look at the music subscription industry today – around four million Australians are willing to fork out for an ad-free listening experience. Around a quarter of Australians have a Netflix subscription, “and that was within about five minutes of it landing here,” quipped Brownlow.

“I actually see that as a fantastic thing because Australians are finally learning that content is valuable and you should pay for it.”

In addition, according to eMarketer, in 2019 around 30% of all internet users deploy some form of ad blocker. And according to Social Media Today, the three primary reasons people use ad blockers are because they see too many ads, they feel ads are annoying or irrelevant or they feel ads are intrusive. 

“All the data points together show a really compelling consumer behaviour – if they can, [consumers] will avoid ads. That means relevant advertising, personalisation at scale becomes even more important than ever before.”

But it gets trickier than that, as explained Benedik, “We have video ad unit called a ‘sponsored session’, and very simply… we ask the user, ‘if you watch this 15-second video, we’ll give you 30 minutes of an ad-free session on Spotify.’ It’s a reward-based offer – 90% of our users say yes.” 

That adds some substance to our understanding of ad aversion – customers will routinely seek out ad-free means to accessing their entertainment unless the value in the advertising is clearly conveyed. It’s the value exchange Brownlow was talking about earlier. If you acknowledge customers’ disdain for advertising and appropriately lay out the rules for an exchange in benefit, they may just be more than eager to take you up on it.

Know me right now

Spotify now has eight primary ‘buckets’ of data, as Brownlow called them, that it provides – perhaps the most exciting of which is ‘moments’. “It’s not just gender, it’s not just age,” specified Benedik. “The more we understand who you are in the moments that you’re in, the activities that you’re in – that’s what marketers crave.”

These moments account for not only the kinds of moods listeners are in when they seek out a particular genre or artist, but how that music, podcast, audio book and so on can affect their psychology. Music, in particular, is an incredibly powerful catalyst for mood and mindset – as demonstrated by recent research performed in Australia by Sonos. Moore explained that the study found that music can encourage intimacy, get us to say ‘I love you’ more often, cook better tasting food, study more efficiently and even get kids (slightly) more keen on doing their chores. And according to Moore, these effects aren’t isolated only to plugging yourself in; music can have the same impact when played out loud in the home. In fact, the same study found that playing music through higher-quality speakers can actually increase the destressing rate of certain music’s calming effects when compared to music played through less-than-high-quality speakers.

According to Benedik, some of the most fun he has working with marketers is when they come to the table with their own high-fidelity CRM data. “It’s very exciting if a marketer can bring their own first-party data. Responsibly, we can do the match and that will inform the strategy.”

“Let’s see what your audience is doing with Spotify. Let’s see what playlists they’re listening to, what artists they like, what devices are they on, what time of day they are using the service”

Third-party data can of course be layered onto this audio segmentation too, Benedik explained, “we all use [third-party segments], we all know the flaws, so that’s not perfect. Using those two [first- and third-party data] together typically gives us a lot of results.”

Let’s step back to understand the power of moments-based targeting Benedik spoke about. Personalisation in business has been around for longer than the idea of one-to-one marketing. But it was organic, it came from a place of human understanding. It was the owner of the fish and chip shop knowing you don’t like too much salt on your flake fillet, the hairdresser knowing your scheduling availabilities, the taxi driver finding a dry drop-off spot in the rain. If that fish and chip shop today were to have become a multinational corporation servicing thousands of people, one owner’s memory would no longer be sufficient to maintain that personal connection with customers. In other words, the human touch just doesn’t scale on its own. Technology was employed as an extension to juggle those thousands of people’s preferences, habits and circumstances. Thus, in the brave new world of internet infancy, digital personalisation took hold – but it only focused on two vectors: who are you and where are you? Marketers could figure out a profile of their customer, what they were interested in, the environment they prefer to communicate in, even what they were saying about your brand. But as those customer understandings evolved and became more complex, they still weren’t able to venture out of the ‘who’ and ‘where’. What an understanding of instantaneous behaviour enables is: what are you doing now and how are you feeling? It’s real-time and involves the real emotions of your individual customer, coupled with the power of big-number crunching, always-learning algorithms. This is what true personalisation looks like; being able to not only weigh up the history of a customer with your brand and how they would typically behave, but meld that data with an understanding of how they’re feeling in the moment.

In many ways, the moments-based marketing Benedik describes is the kind of personalisation we’re trying to get back to. The kind we always had, but couldn’t do at scale.

 

Spotify has created a new guide to help marketers take advantage of the audio opportunity. Download Spotify’s ‘How streaming is unlocking new opportunities for today’s CMO’ white paper »

FIND OUT MORE