XAPPmedia Issues First Apple Music Ad Load Report

RADIO ONLINE | Monday, September 28, 2015

Apple Music will provide an ad-supported service after free trials end next week. According to reports, about half of Apple Music's 15 million users will find this out next week when their free trial expires. The other half will see a $9.99 bill for the first month. Nielsen studies say 95% of Internet radio users have chosen ad-supported listening over becoming subscribers. As such XAPPmedia's first Apple Music Ad Load report has been released.

The surprise to some is that Apple Music is even providing an ad-supported option says the XAPPmedia report. The hype around the Apple Music launch focused exclusively on its subscription service. However, many observers overlooked Apple's first foray into this market. iTunes Radio was ad-supported from the start and didn't provide a subscription option for its first 22 months of operation

XAPPmedia's Internet Radio Ad Load Report is known for tracking the ad-serving practices of several music streaming services. While it hasn't included Apple Music or its iTunes Radio predecessor in those reports to date, they have tracked the ad load on the services since January. That provided six months of data before the Apple Music launch to compare with data from the first two months of the new service. And, we can compare that to industrywide practices revealed in previous ad load reports.

There are five highlights related to Apple Music's current advertising approach:

• Ad load tracks closely to the industry average for Q2 and Q3 2015 but it is almost double the iTunes radio ad load from Q1
• The number of ads per hour also closely tracks to the industry average
• About half of Apple Music's ads are artist album promotions although they do also have plenty of big name advertisers ranging from Pepsi to MasterCard
• The Beats One radio station on Apple Music has advertiser sponsors that include American Express and McDonald's, but rely primarily on hostread sponsor mentions instead of traditional ad spots
• Apple Music serves ads much sooner in a listening session than most of its competitors

Not only did ads continue after the Apple Music launch, but ad load increased slightly from 2 minutes 25 seconds in the second quarter to 2:29 for July and August. Both results are up sharply from a first quarter ad load on iTunes Radio of only 1:17. Apple is tracking very closely with industry peers. Average ad load for the industry in Q2 was 2:32 and it is at near parity for July and August (full Q3 ad load results will be published in October).

When it looked at monthly numbers, a strong ramp up in ad load was seen during the second quarter up to a peak of 2:46 in June and then settling back to 2:33 and 2:24 in July and August respectively. It is not clear if the recent monthly decline is indicative of seasonality or an attempt to limit ad load after the launch of Apple Music.

You can see a lackluster commitment to advertising in the January to April period where the majority of ads were aimed at promoting album downloads on iTunes. After that period, the sharp ramp up was accompanied by a number of big name national advertisers and has exceeded the industry monthly average.

The number of ad units per hour was also on par with industry averages in the Q2 and early Q3 period with 5.31 and 5.39 ads per hour, respectively. These numbers are driven by the ad load and predominance of 30-second ad units. In the current quarter, over 80% are 30-second ad slots up from 74% in Q2. Apple remains close to the industry average for the proportion of ads at 30 seconds in length.

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