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40 Million Reasons Why Shazam Should be in Your Marketing Plan

Music-identifier Shazam has received $40 million to grow the app’s user-base from 350 million to 500 million. The funding comes from América Móvil, one of the world’s largest wireless communications firms and is owned by Mexican billionaire Carlos Slim. Shazam’s newest investor wants most of the app’s growth to come from South America, and the app will be pre-installed on phones that América Móvil sells, reports the Wall Street Journal.

Most of the money that Shazam makes comes from song purchases. After users tag a song, they are directed to iTunes where they can buy what they just heard. Shazam then gets commission on the sale. According to the Los Angeles Times, Shazam tags have led to $300 million in sales in the past 12 months.

Shazam has grown in America as the easiest way to identify songs and marketers have started playing with Shazam as a way to engage TV viewers during ads. By using Shazam during an ad, viewers are brought to microsites, exclusive music videos, or coupons for various products. Shazam is partly responsible for saving the jingle as advertisers are turning to catchy tunes that viewers will want to learn more about.

image (12)Anyone can design an app these days, it’s what you do with it once it becomes popular that really matters. Investments like the $40 million showered on Shazam prove that the app is expected to grow both in global fan-base and uses. The app will find ways to increase revenue through advertisements and continue to develop partnerships with music vendors like iTunes and Amazon. The product may be successful now, but it’s only a hybrid compared to what it’s going to grow into.

Shazam isn’t the only app sitting in “what’s next?” purgatory. Foursquare also received a serious chunk of change to further evolve and develop its fan base and Google is banking on Waze to be the next best thing in traffic apps.

Creating an app or product that either receives millions of dollars in funding or goes public may seem like a dream come true, but it puts further pressure on developers to create a successful business. Foursquare has tried to stay popular by piggy-backing off of Yelp and stealing some of its users. When Facebook introduced video to Instagram, the news received a lukewarm response from investors and their stocks plateaued. When there are suddenly dollar signs in the millions or billions at stake, the pressure to perform escalates dramatically.

image (13)Shazam seems to have a clear path to grow in the future. In addition to pre-installing the app into América Móvil smartphones, they’re paying attention to current events. Bloomberg pointed out that the timing for this investment couldn’t be better, as the world turns to South America – particularly Brazil – for the 2014 World Cup and the 2016 Olympics. They reported that 1 million people used Shazam during the closing ceremonies at the London Olympics last summer, so imagine how many users will be using it in the next three years. As the economy in South America grows, so will the popularity of Shazam. Is it in your marketing plan?

About the author

Amanda Dodge