By Claire Russell, Head of Media, Fitzco
Nothing foreshadows success for a new digital technology better than when Facebook decides to purchase it outright (Instagram) or makes its own version.
Clubhouse, a new invite-only “drop-in audio chat” app available on iOS, is gaining momentum. Launched in March 2020, Clubhouse is the latest platform making brand marketers take notice of the power of audio as a communication channel.
Radio (and more broadly, audio) has been around since the late 1800s and continues to evolve with the emergence of Bluetooth-enabled cars, smart speakers, growing and ubiquitous mobile-device usage, and investments from players like Apple, Spotify and many others. The emergence of these digital formats has given audio another day in the sun.
It has a few distinct advantages. According to Nielsen, radio has a high audience reach at 88.6% and relatively high time spent at 13.1 hours per week, even with declines over the past decade. The creative opportunity is unique, the lead time is manageable, and production costs are low. Some may call audio channels limited because many lack accompanying visuals. But many top brands and agencies are taking the “theater of the mind” challenge head-on and finding ways to articulate their creative ideas through audio-only. And with digital formats growing, addressability and measurement are better as well.
One notable distinction is that radio is known for its organically local element. Ads are often voiced by trusted local announcers and appear in local segments, which is appealing for advertisers with brick-and-mortar locations or other local-market priorities. You can still find that a bit as stations work to transition these shows to digital on-demand formats. However, the growth of audio options like podcasts dilute the local advantages; you can scale but you sacrifice some of the community feel.
Challenges aside, growing listenership is pushing advertisers and partners to develop this space at warp speed. You see that with iHeartMedia Inc., which is in the process of acquiring Triton Digital in an effort to expand its audio-streaming and broadcast-radio advertising capabilities and reach.
YouTube launched audio-only ads last year. Netflix has been testing an opt-in “video off” feature so users can simply listen to their favorite shows on mobile devices.
Italian pasta brand Barilla teamed with Spotify to create music playlists that play for up to 11 minutes and enable listeners to boil different types of pasta for the exact amount of time to achieve the perfect mouthfeel. TuneIn, another music-streaming platform, partnered with dating app OKCupid to launch custom streaming stations based on stages of the dating process.
With these shifts in audio, the opportunity for advertisers is changing and growing. I’d argue that on-demand audio consumption has higher attention than in-car, background-noise type listening because of the small but powerful behavior of searching for and choosing something to listen to.
And now we have Clubhouse, a platform so “exclusive” that some folks are selling their invites on eBay.
Clubhouse is essentially an interactive set of audio-only chat rooms that has turned heads with appearances from Elon Musk, Tiffany Haddish, Mark Zuckerberg, and Kevin Hart. You can navigate and join various ongoing conversations – topics range from adulting to cricket to geopolitics. It’s built to feel more human than other social platforms.
Right now, Clubhouse lacks paid-advertising placements, but brands can certainly be part of the chat rooms by participating in existing rooms or starting and “sponsoring” their own. Brands can also consider collaborating on moderator-read product mentions in these rooms. It’s meant to test the waters and create authentic engagement with their target audience.
There are some considerations for brands trying to participate, though. Clubhouse is significantly more open and interactive than a podcast recording, and while you have to raise your hand and be granted access to speak, you still can’t control what people say. Such an environment can leave room for hate speech or otherwise controversial topics that might not align with brand-safety parameters.
Another consideration is that the “live” nature of Clubhouse makes it a little clunky. Live streaming platforms struggled in the same way, and people started to realize how difficult it was to curate something interesting and engaging in a fully live broadcast.
Clubhouse allows up to 5,000 listeners per room, which means brands would need to arrange a number of activations to reach any meaningful scale.
The user base of Clubhouse is growing hand over fist with about six million registered users to date. For most brands, this is a “wait and see” period, but some have and will continue to leverage Clubhouse seamlessly and will win with customers for their authentic involvement.