Internet radio company Songza has raised $4.7 million in fresh funding that will help grow its advertising business.
The funding will allow Songza to establish its solution to create native advertising — advertising that’s built into the listening experiences. Whereas a typical Internet radio service streams music based on genre, artist or song, Songza allows listeners to select music for activities. This approach to curation allows Songza to integrate brands into what the company calls “life moments” like working out, driving or entertaining.
Native advertising has the potential benefit of creating harmony between the listening and advertising experiences. Advertising — especially audio ads — tends to disrupt the listening experience. And although radio listeners have shown a tolerance for at least some advertisements, Internet radio services could benefit from finding ways to integrate ads in less obtrusive manners.
Songza investors in this round include Amazon, William Morris Endeavor, Lerer Ventures, Deep Fork Capital, Metamorphic Ventures, artist managers Troy Carter and Scooter Braun, and author/tech businessman Gary Vaynerchuk.
Songza is a relatively small webcaster with roughly 35 million listener hours per month, or just 2.6% of the 1.4 billion listener hours Pandora streamed in August. But the New York-based startup’s native advertising has attracted such brands as Nissan, Samsung, Taco Bell, HSN, Victoria’s Secret PINK, vitaminwater, Mr. Clean and Colgate.
Nine of the company’s 27 employees are advertising-focused staff, CEO Elias Roman says. “Our content team is also heavily involved in the native advertising we produce to ensure the content is as excellent as any other content we serve. That’s why the user response to the native advertising has been so positive.”