Music Tech Company The Echo Nest Expands Into Ad Targeting

The Echo Nest, a “music intelligence” company whose technology powers recommendations in services like Rdio and Clear Channel’s iHeartRadio, is now looking to help partners make money from advertising as well.

CEO Jim Lucchese argued that while music apps can become much more personalized, the ads running in those apps remains stuck in the broadcast model, targeting audiences at the most general level.

“Now that music is personalized and online, versus broadcast, we can move from a dozen radio formats … to basically packaging audiences and targeting them,” he said. “We see ourselves becoming the engine to enable that.”

Apparently the company has been developing its “Music Audience Understanding” product for nearly two years. Lucchese said The Echo Nest is taking the machine learning technology that it uses in music and applying it to other areas. To simplify things, it’s not just able to say, “If you like Song X you’ll probably like Song Y,” but also, “If you like song X you’re likely to be Y kind of person, and therefore maybe interested in Z kind of product.”

Lucchese said that in order to make those kinds of connections, the company has pulled a lot of data from the web and social media (where people often express preferences and interests, musical and otherwise), as well as from the third-party data providers – the targeting is all anonymized.

The company says it can currently predict audiences’ age, gender, and affinity for 20 lifestyle categories (foodies, gamers, etc.). Ultimately, the goal is to allow music services and networks to charge more for ads by giving advertisers more audience data and better targeting. Lucchese said this could also power new approaches to advertising – as examples, he pointed to the branded music apps that The Echo Nest has already helped create, like Microsoft’s MixShape.

The Echo Nest is also announcing its first partner for the new technology, audio ad network TargetSpot.

As this effort expands, Lucchese said, “I wouldn’t say we’re locked into any one specific channel partner.” At the same time, you probably won’t see The Echo Nest working directly with advertisers: “We’re a data company. I don’t think you’re going to see us getting into the ad sales business anytime soon.”