Montreal-based music service provider Stingray is to announce an alliance with Texas-based Mood Media on Tuesday.
The collaboration agreement is expected to help Stingray further penetrate the U.S. in-store audio advertising market.
The two companies are joining forces to create what they call the largest retail media network in the United States. Their in-store digital audio ad delivery platform will allow advertisers to reach consumers in over 25,000 businesses across various industries (groceries, pharmacies, convenience stores, hardware stores, etc.) in the United States.
Stingray’s network already had 16,000 stores in the United States. What is interesting for Stingray is that the agreement with Mood Media will allow it to add major retailers such as the grocer Kroger, underlines Mathieu Péloquin, senior vice-president and head of marketing and communications at Stingray.
The collaboration between Stingray and Mood Media is effectively a sales agreement. Advertisers will be able to purchase a suite of digital audio advertisements for the entire combined network.
“We’re doubling our sales force,” says Mathieu Péloquin. Stingray will sell the Mood Media network, and vice versa. »
This operating segment provided about $40 million of the $324 million in revenue generated in Stingray’s last fiscal year, which ended at the end of March.
Stingray Advertising leverages the music infrastructure already in place in stores to integrate digital audio advertising capabilities to generate advertising revenue for business partners.
Stingray executives say in-store audio advertising investment is on the rise in the United States. They expect spending, estimated at $31 billion in 2021, to top $61 billion by 2024.
Stingray management believes that the agreement with Mood Media will notably enable a more predictable cost per thousand (CPM) and fill rate for retailers.
Similar in size to Stingray, Mood Media is a private company owned by investment firm Vector Capital. If Vector eventually decides to divest itself of Mood Media, this company could become an attractive target for Stingray, especially if the partnership between the two companies delivers the expected results.
Stingray shares closed the first session of the week up 1% at $5.14 on the Toronto Stock Exchange. The stock has been hovering between $4 and $7 for the past year.
