Jelli, makers of an ad platform for radio broadcasters to digitise how they fill space on their airwaves — think “AdWords for audio” — has raised a $21 million round of funding to grow its business as it prepares to expand to other kinds of audio services — specifically streamed music. The Series B round comes from a mix of strategic backers and top shelf VCs that includes iHeartMedia and Universal Music Group, Relay Ventures, Intel Capital and First Round Capital.
Of course this is not the first time that someone has tried to tackle the radio market with a bit of modern ad technology. Google famously (and expensively) tried its hand at bringing radio broadcasters on to its platform but pulled the plug on is project in 2009.
Mike Dougherty, CEO of Jelli, believes Google may have been a bit too ahead of its time.
“It was an initiative that they were a little early with and it didn’t get the global scale they wanted,” he says. “Then they bought YouTube and Doubleclick, and if you had to pick one, well I think they decided, ‘let’s get the areas with most scale.’ It did leave a gap in the industry about how to think about audio advertising.”
Jelli is raising its game at an interesting time for audio-based services. Today, the shift to digital music has given rise to a huge proliferation of music streaming startups and digital music businesses — with some of them now commanding multi-billion valuations — and these sit alongside initiatives from the world’s biggest tech companies. All of this continues to co-exist with a lot of analogue services in the form of radio, physical music sales and live performances.
Jelli hopes to position itself somewhere in the middle of all of this. The investment from iHeartRadio comes at the same time that the company, which owns 858 radio stations, is working with Jelli on building an ad buying platform for its properties.
And Katz Media Group — which works on selling radio ads for iHeartMedia, Cumulus, Entercom, Cox Media Group and others — will also be using Jelli to power Expressway, a programmatic ad exchange to work with multiple broadcast radio stations from different owners — the first of its kind, the company claims.
While revenues from analogue recorded and radio ain’t what they used to be, they are not insignificant. In 2014, audio advertising was worth $17.5 billion market in the U.S. alone, working out to 1 in 10 of all advertising dollars.
While radio is the focus today, the plan is to widen this out in the future to other media and platforms.
“We are not yet working with Spotify or Apple,” Dougherty says, explaining the company’s decision to tackle radio first. “Our strategy has been to work with the parts of the market with the most scale and that means with the most marketers or advertisers.”
Longer term, the idea will be to make radio a part of the multiplatform mix that has come to charactertise a lot of advertising today, where brands and media buyers like to buy campaigns across web and mobile, display and video, social and primary content, and then measure how effective they are across the mix of them all, partly in an effort to make ads more natural to where users may see them best, or want to see them most.
“The holy grail of advertising is to make it feel more aligned,” Dougherty says. “If you can make it feel more aligned it’s more acceptable.”
“We want to put audio into that chain,” he adds. “If you are running ads on video you can easily with the same platform execute audio ads to get better performance. We want to enable that.”
The company has raised $37.6 million to date.