The second screen is a non-interruptive engagement experience.
When Evan Krauss joined Shazam in November 2010, the London-based company was known for its music-recognition mobile app. Now Shazam is positioning itself as a “media discovery company,” building partnerships with television brands and advertisers. Last month, for instance, it signed an exclusive U.K. deal with the broadcaster ITV. With 200 million users in 200 countries. Shazam has a big advantage in the race to link TV with the second screen (laptops, mobile phones, tablets).
We talked to Krauss while researching our May trend report, “10 Ways Marketers Are Using the Second Screen.” He talked about what the company is learning from its foray into television and what to expect next.
How did Shazam evolve from a music recognition tool to become part of the second-screen TV experience?
The company’s older than most people think—it’s 11 years old. Before the whole smartphone craze, Shazam was a short code or a phone number you would dial. The phone would listen and hang up, and it would send you back a text message. When the App Store started, [Shazam] was actually marketed by Apple because they thought it was a great representation of how cool these new phones are.
One of the early parts of the vision of the company was to be discovery, music being the most fundamental perceived broadest need. But the founders had a vision that the mobile device is always with us; there’s lots of things that it can help us discover. As we became more and more successful, the company started thinking, How do you take this huge user base, and what do we do with it?
We did some research and found out a huge percentage of the Shazam activity around music is not what we call “name that tune.” It’s around what people already know, but they almost want to “bookmark” it out of the air because they want to buy it later or look at videos or check out the lyrics. So we were we were learning this and asking the question around TV at the same time, and it became clear, if people use us to explore stuff they already know, it does seem to make sense that TV would work. We’ve done now 30 different TV programs and tests with pretty much all the major networks and most of the major cable folks.
Is this in the U.S. only so far?
We’ve done no network programming outside the U.S. yet. We’ve done a number of advertisements. Of the 76 commercials, about eight of them have been outside the U.S., and it’s been mostly Australia, the U.K. and Ireland.
And that’s because they approached Shazam?
Yeah, it was before I even had teams in place. It was some of the U.S. agencies we were working with linking us off to their counterparts in other markets.
What kind of user behavior have you found?
Something we saw right off the bat that has continued is that once people have Shazamed, the engagement numbers are through the roof. So a viewer is literally raising their hand in their living room, right? It’s a habit people have—they hit the [Shazam app] button and they hold their hand up, and that’s the first action. The real ROI is once I’ve done that, what do I do? Do I take the action that the marketer or the program was hoping to have me take? There are some people who do it and they’re like “Eh,” or “Oh, that’s cool” and don’t really do anything, but for the most part people are engaging in a very deep way, and it’s not just in the moment.
When I Shazam something, it stays in my “tag list,” we call it. So every song I’ve ever Shazamed, any TV show or every commercial I’ve ever Shazamed, is now in that list as almost a bookmark. And we’re seeing people, the next day up to usually about three days after they Shazamed TV, they’re going back to that tag to watch the video for the movie trailer or do a click to call for Progressive Insurance, etc. They’re not necessarily doing it on the couch.
So it’s extending the message over time as well as onto the other screen?
Absolutely. And that’s why I think second screen is powerful, because look at the benefits. It’s a non-interruptive engagement experience. I can decide I’m going to take action, and I can either just put it down because I know it’s on my phone—I’ll go deal with it later—or I can engage now. That’s a huge part of why second screen is more powerful than the remote. The remote is a very disruptive way of getting at the same thing.
What do you know about the demographics of users so far?
An interesting fact about smartphones is they’re getting younger and younger every quarter as more Android devices are going into the market, but also every time Apple puts out a new phone, they make their previous one cheaper. Our general audience follows the smartphone audience. As it relates to Shazam for TV, it tends to be in the sweet spot of 25 to 54. The second biggest category would be 18 to 34.
What about by gender?
Our overall app is about 50/50. Shazam for TV is 55/45 women—more women are Shazaming TV than men, which shocks the hell out of us. Our most successful campaigns have been retail campaigns by factors of 10 compared to the other campaigns. They were humongous. Movies, and entertainment in general, have been very successful as well—that’s where we’re seeing potentially more men engaging. They see the Underworld trailer, and they want to go see more Kate Beckinsale or to see the three-minute trailer or engage in content in another way. Shazam pulls them into the Underworld experience in a different way.
Have you seen any differences between markets?
The engagement story’s been pretty consistent, but more people Shazam in Australia as a ratio to the reach than anywhere else in the world so far for TV. On a one-to-one basis—same campaign in the U.S., same campaign in Australia—Australia had a significantly higher Shazam rate. It’s not a market we have any higher penetration in. We have no idea what it is.
What are some of the more innovative partnerships Shazam has had with advertisers and brands?
Our first major campaign we launched in the States was with Old Navy [in February 2011]. That was a really interesting one. One of the most exciting things was that close to 30 percent went shopping: We created a microsite for the clothing that was featured in the commercial—there were actually six different commercials—and 30 percent of the folks went exploring Old Navy’s new [styles].
That was over a year ago. When did you see the interest really picking up from marketers?
So we did [the Old Navy campaign], and then we backed off advertisers and focused on the networks because we wanted to make sure there was more to Shazam on TV than just commercials. We believe for people to want to Shazam TV programming, we need a really compelling experience.
It went something like two campaigns Q1 of last year, four campaigns Q2, nine campaigns the next quarter, and then it went like 12, 16. And then Q1 this year with the Super Bowl—we had 26 campaigns that were Shazamable on the day of the Super Bowl, let alone the quarter.
What are the various ideas that brands are coming up with? Are they mostly basic promotions?
The way I explain our evolution is, we’ve been in a 2D world. A lot of the inspiration or the excitement’s been coming from clients, and then it’s been going to the digital teams. I’m a digital guy, so I can say it—we think in 2D; we think Internet. What we’re starting to see now in some of the more exciting conversations is more 3D, where the TV folks are getting involved, and the folks creating the TV campaigns are starting to think about how Shazam can play an active role in the campaign itself earlier in the process.
There’s nothing more compelling than TV commercials. No banner ad made you cry or made you laugh. You can really change somebody’s perception in 30 seconds, but at the end of 30 seconds it’s over. I’ve always believed the opportunity is to have that experience jump into consumers’ hands, and we have the technology. And so now that we’re starting to talk to the creative people, that vision is starting to come through.
Can you give us an example of this “3D” vision coming to fruition?
We’re working with one of the studios on a movie that’s coming out—when you Shazam their trailer, the experience you get within Shazam is a scene in the movie. And as you move your phone around, the phone is like a peephole into the room, and as you walk to the right and move your phone to the right, you move to the right in the room, and you can look up at the ceiling, you can look down on the floor. You can interact with the experience.
Of course we have the utility functions—you can go find out when it’s playing and buy the tickets on Fandango—but how do you pull [consumers] into the story? So not only are they definitely going, but they’re telling 10 other people to go—that’s the opportunity here, and that idea’s being used in different ways. There’s other ways to take the whole idea of what we call the interactive panorama experience. It works great for retail: I could walk through a retail experience and see different clothes on mannequins.
I’d say we’re in Version 1 right now after. Version 2 is what I’ve been dreaming of since I joined the company, which is this more elaborate experience. We’ll start seeing some of those next quarter and a lot more the quarter after. One of the things we had to learn the hard way in this process is, TV takes a hell of a lot longer than digital.
What are the metrics you’re seeing for the campaigns so far?
If you take all our campaigns, we’re looking at about a 47 percent engagement rate. We had millions of Shazams [for the Super Bowl]. The halftime alone was about 40 percent of that, and that was a partnership with Bud Light and Madonna, which had huge success. So we promoted the Super Bowl like mad, plus a lot of our advertisers who had Shazamable commercials were advertising it, and we got a couple million [users]. A week later the Grammys got a half a million, and we didn’t even tell people it was Shazamable.
Thanks to the momentum that the Super Bowl brought, we’re seeing up to 100,000 Shazams for programs that we’re making Shazamable but not really publicizing, because we’re still testing them out.
What exactly is the viewer seeing when he or she is Shazaming a TV program?
As of right now, you can Shazam American Idol, and it’s a very utilitarian experience, but it’s a fairly good one, which is “I want to buy the music that’s being performed” or “I want to go to the site,” which has the details about all the contestants and that kind of stuff. A lot of us wouldn’t necessarily explore it sitting on their couch, but the next day on their train ride into work, they might just click around, right? I call it snack moments.
We’re seeing that if you Shazam a TV show, you have this utility, but then you go back and you kind of snack through it. With the Super Bowl it was really about “How do I get really simple, quick access to all those stats?” You’re taking polls—who do I think is going to win, who do I think the MVP should be, what’s my favorite commercial? The Grammys was really artist-specific as well. With some of the programming, we’re giving people behind-the-scenes.
The coolest one we’ve done so far was with Red Bull and NBC. Red Bull had this series, it was basically a hardcore snowboarding show that they aired this weekend. If you were watching any one of the athletes going down the hill, you Shazamed it to watch a video from his point of view. The numbers are through the roof. It’s one of our most compelling and most successful experiences by far. The percentage of people watching the show that Shazamed were in single digit percentage points versus decimal places percentage points of the percentage of people watching the program. And on average, there was a 130 percent viewership of the videos, so people watched more than one.
With Shazamable ads, what are some lessons learned so far as to what works with viewers and what doesn’t?
Consumers need to know that the commercial’s Shazamable, We found that on average, the best time to start the call to action is five seconds in, not right away, because it gets lost in that moment where the viewer’s just figuring out what’s going on. Leave it on-screen for at least 10 seconds, and there should be some call-out of what I get: “Shazam for a free sample.” Axe did a hilarious one—it was this “Premature Perspiration” campaign; there was a “Shazam for the unrated commercial.” You can imagine how that played out.
So you have to tell people what to do and what they get, and that leads to the second part, which is the value proposition and the experience. So the first one leads to volume. The second leads to engagement. The simpler campaigns that had a more focused user journey had much higher engagement than ones that offered 20 different things for consumers to do.
The ones that did well, the call to action made sense, offered value, and boom, I connect with that value right away. Offers do get people to jump. Content and humor also seem to be engaging for folks. This isn’t rocket science stuff. Shazam is, at the end of the day, a platform of 200 million users kind of waiting there to raise their hand. The same tried-and-true marketing rules apply.
The most interesting thing for me has been collaborating between digital and TV folks, who think of things so differently. Trying to get them to even sit at the same table is fun.
What’s the split between tablets and phones?
It’s mostly phone right now, like 90 percent. Tablets are starting to increase. I don’t think that’s a penetration thing, by the way. Tablets are going to be a different use case, and we’re developing toward that.
Tablets are more about a watch-along experience: I want a really rich experience and I’m going to stay with it, versus the smartphone model, which is, I’m going to engage for a period of time and then come back to it later, or not.
Jumping ahead to the next Super Bowl, what kind of new things do you think we’ll be seeing?
I wish I had my crystal ball, but I think the most interesting thing is, every quarter we’re going to start seeing more innovation on the platform. We’re going to keep pushing the platform technology-wise as far as we can, but it’s really about great ideas and getting the creative shops and all the different folks. It’s like, how do we get those minds involved? Because if you think about what you can do—there is really no limitation to the device. We can create ridiculously interesting experiences.
Can we expect any interesting campaigns around the Olympics this summer?
All I can say is that the Olympics for us will make the Super Bowl look like an elementary school football game. We’re taking the Olympics very seriously—the Olympics are about the sport, but it’s really about the athletes and the stories around those athletes, and so we’re trying to bring that to life for our advertisers in a really cool way.