Guvera, the well-funded Australian music site, quietly introduced a new free ad-supported download service in the U.S. this week, representing another twist on a model once left for dead. The company, backed by AU$30 million ($27.5 million) in venture money, is gambling that its unique targeted ad model will provide a worthwhile opportunity for advertisers seeking to connect with particular audiences by dangling free MP3s in front of consumers.
The model, which CEO Claes Loberg calls “engagement advertising,” allows an advertiser to choose specific songs to sponsor along with target demographic groups. Rather than interrupt the experience with a video ad, he says, advertisers can create branded pages that feature dynamic lists of songs with which the brand wants to be associated. Essentially, the model demands that consumers willfully click on a chosen advertiser’s brand name. The advertiser’s fee covers the retail cost of the song file, plus a little more for Guvera itself.
For consumers, the path between a search and a free song file is one of fairly little resistance. If I search for an artist and choose a song, I have to pick an advertiser and visit a “channel” page populated with a list of songs, one of which is the one I want. Although I don’t pay for my track, I’m required to use up a song credit, which can be earned by telling Guvera what some of my favorite things are -– foods, vacation spots and so forth. So by volunteering a bit of personal information and viewing a list of songs with which a consumer brand wants to be associated, I get a DRM-free MP3 at no charge.
Guvera has drawn comparisons to Atlanta-based FreeAllMusic’s service, which is still in private beta. That site offers an MP3 in exchange for watching a video ad of your choice. I’ve enjoyed FreeAllMusic for a couple of months, especially because I know the artists whose music I download are compensated, although I’ve felt little engagement with most of the ads I’ve seen. In fact I’ve already figured out which one of the available ads is the shortest, and I’ve chosen it repeatedly even though it’s hawking a product I’ll never buy. If advertisers are really paying $2 for each video ad impression they serve up as I fill out my jazz collection, in my case, they’re overpaying.
The same may be true of Guvera’s advertisers, who might sway me occasionally but whose pages I’ll probably click on without much thought. Each has a limit: Guvera allows brands to cap the amount they’ll spend on each consumer, making the service less scalable but also better tailored for grabbing a single song than a whole album, which might require more credits than the advertiser is willing to give. In that sense, Guvera plays to the consumer of hit singles first and foremost: Don’t buy the Lady Gaga song, let the hair product maker buy it for you.
Guvera’s U.S. launch is still incomplete. Although the song catalogs are searchable, the channel pages aren’t yet populated, so there isn’t any free music available just yet. (I was able to preview the Australian version early this week, which Loberg said about 50,000 Antipodeans are using.) Also, Guvera has signed up only two of the four major labels thus far, plus indie aggregators IODA and Ingrooves, although Loberg said a deal with a third major is imminent.