Shazam Hints at 2014 IPO

Speaking to Shazam executive director Andrew Fisher, it’s easy to believe that the British-based company has the silver bullet for linking TV, radio, outdoor and in store, and is therefore well-placed to reap the rewards from this trillion-dollar market.

So far, the company has focused on using audio recognition for TV ads, bringing users additional branded content within the Shazam app, which turns 30-second TV slots into three minutes of engagement.

“If someone is engaged immediately, to go straight through to a call centre for example, the conversion rate and ROI is going to be far greater,” Fisher said. “So Shazam is helping traditional media budgets perform better.”

Fisher said the company is actively engaging with brands and agency partners around whether image recognition will become part of the Shazam experience, but he said to date, demand hasnt been high enough. Through its audio campaigns alone, the platform has driven more than 500,000 users a year to buy $300m of goods and services.

Further growth

But Fisher points out that even with a user base of 350m – and growing by 2m every week – Shazam has only captured around five per cent of the potential global audience. “95 per cent of the opportunity is still in front of us,” he said.

Shazam went to market knowing the facts about smartphone penetration – growing, but not the majority of the world, yet – so has always offered support for feature phones in the 200 countries it is present in. The company’s relationship with Latin American telco América Móvil, from which it received $40m of investment back in July, was a key strategic play to help the company reach its next milestones of 500m and then 1bn users.

“What we now have the ability to do, in partnership with brands, is to give value-add offers to users who have already Shazammed a product, delivered when they are actually in a retail store. There is $1 trillion in total spend between global TV, radio and in store promotions – no other companies today are positioned to build and deliver on that experience for brands and advertisers.”

Partnerships and offerings

As well as creating more than 300 campaigns for 150 top-tier advertisers like Pepsi and Barclays, Shazam has a partnership with Nielsen to use its general viewing data, along with Shazam numbers, to work out campaign engagement figures. The likes of Twitter and Facebook are going further than this, securing deals direct with TV channels to create new ad revenue streams around second-screen social chatter.

Asked if any more data deals were on the way for Shazam, Fisher said: “Lots of people want to access our data because we have both the user’s preferences and their location. Although there will be scope to build more of these kinds of relationships, ultimately we have to protect our relationships with users.

“An IPO is a stated ambition for Shazam and it is my role to work with investors and prepare for that event as and when it would be appropriate to do that. We’re very focused on monetisation and revenue growth – being able to capture part of digital spend and traditional media spend enables us to grow revenue much faster. We will not be at a point to do our IPO this year, or at least in the first half of 2014.”

When asked how this IPO will compare to the likes of Facebook or Twitter, Fisher dismissed the comparison. “We believe we have created a new digital advertising category around media engagement. It gives brands the opportunity to extend engagement with target audiences.”