The Clubhouse Effect: What’s in it for brands?

If 2020 was the year for audio and voice, 2021 is about ‘social audio’, thanks to the popularity of Clubhouse, especially among entrepreneurs, investors and tech aficionados, globally.

Clubhouse, a year-old invite-only audio chat app, that hit the 10 million active users mark this February, is valued at $4 billion. Recent high-profile guest appearances of Tesla’s Elon Musk and Facebook’s Mark Zuckerberg amplified its popularity. Clubhouse has raised $110 million till date.

Essentially, on Clubhouse, users can listen in on interviews and interactions between people; topics vary - from tech, food and politics to mental health and films, among others. The virtual conversation rooms resemble conference calls; when conversation ends, the room is closed.

The popularity of Clubhouse appears to have spawned a slew of similar products. Platforms like Facebook and Reddit have announced the launch of their audio based chat room rooms, or ‘Clubhouse clones’ as some experts call them, recently. The former also plans to roll out a new tool for creating audio clips and listening to podcasts on the app. Among platforms that are investing in their social audio features are Slack, Discord, LinkedIn and Spotify. Twitter is expanding its audio chat room feature Spaces for Android. Speaking of which, Clubhouse is now beta testing its Android version, as per reports.

Closer to home, India has Bakstage and Leher - local alternatives to Clubhouse. The latter supports both audio and video; the live conversation feature was launched last year.

Leher, which was launched in 2018, is popular among young start-up professionals, a trend that surged over the last six months. The app has been downloaded over 2,00,000 times, across Android and iOS, so far.

"A user spends 20 minutes on an average on the platform and 45 minutes on an average on sessions," claims Leher’s founder Vikas Malpani. The team is seeing huge interest from individual creators, knowledge-driven brands in the cryptocurrency space, as well as education, mental health and direct-to-consumer brands.

Meanwhile, Bakstage, that came onto the circuit last month, belongs to Flyx, a streaming social network platform.

Why the sudden rush towards social audio?

Its unscripted real-time nature allows listeners to actively participate in the dialogue, unlike the one-way podcast experience. For audio creators, the low production value and ease of use make it easy to build their personal brands. Social audio also provides a depth of contextual understanding that isn't supported by text. Moreover, during the pandemic, the intimacy of voice makes audio social media more appealing as it fills the void left by social distancing and isolation.

Varun Duggirala, co-founder and content chief, The Glitch (GroupM), who is also a podcaster, has experimented with both Clubhouse and Twitter Spaces and is excited about the category.

"Like YouTube and Instagram, tomorrow an audio-first creator can use Clubhouse, Twitter Spaces and Facebook (whenever it rolls out). It will give audio creators more scale. But it will require some changes in the way we create. The podcast format has been very one-sided. But here, the audience is right there. So how do you build interactivity into it? How do you make them stay longer?" he says.

Other issues include those around content format, moderation and stickiness.

What’s in it for brands?

Social audio presents a big opportunity for brands to participate and use these apps, to engage with their customers. But given the intimate nature of this medium, it's important that brands enter this category organically and authentically. Of course, it's still early days in India, which is an Android-first market.

For Gautam Mehra, chief data and product officer, Dentsu Asia Pacific (APAC) and CEO, Dentsu Programmatic (South Asia), brand marketers have to figure out where social audio can fit in a consumer's life.

"I don't think marketers will spend a lot of their budget on this at the moment. An experimental budget will go into this medium. Is it at a place where both users and spends can grow 5X? It's not clear,” he states.

Arun Iyer, founding partner of Spring Marketing Capital, sees live audio as an evolving space. "If there is a large room with influencers, it might be relevant for brands to be present there,” he says, “Brands can sponsor rooms meaningful to them. At present, it's focused on users and what they find interesting."

Clubhouse in India, Iyer believes, has carved an interesting space in its own niche way as it's restricted to iOS. "As a Clubhouse user, I find some of the conversations useful. If you are listening, there is a lot to learn. If you are talking, there is a lot to share. It depends on where you are in your clubhouse journey,” he adds.

Sowmya Iyer, founder and CEO of DViO Digital, an integrated agency, who has carried out multiple campaigns led by voice search for her clients, feels the novelty factor and snob value has worked for Clubhouse with the ‘invite-only’ criteria. “Clubhouse came along at a time when the pandemic hit us and people started to work from home. As a result, they became committed to learning and development. They wanted to be a part of a community to feel motivated," she says.

According to app analytics firm Sensor Tower, Clubhouse in India was downloaded 12,000 times (till February 2021) by celebrities, bloggers, angel investors and founders, including actor Sonam Kapoor, Snapdeal’s Kunal Bahl and Cred's Kunal Shah, among others.

The intersection between consumer and community…

Community is at the heart of social audio apps like Clubhouse and Leher. People can jump into voice chat rooms, basis similar interest, and build connections. A brand will have a better chance to win if it's community-driven, feels Leher’s Malpani.

"Audio and video are intense and direct ways of participating in and building the community. Today audio is a new avenue, and it is a natural way to reach out to the consumer," he says.

Facebook plans to test its live audio room feature, with Facebook Groups. This will make it available to the 1.8 billion people using Groups per month as well as millions of active communities on the platform.

About this, DViO’s Iyer says, “We have been toying with Facebook Groups, for brands. Audio will add more meaning to it as it will open a new channel of communication with the base Facebook already has for brands. Earlier from a social sharing and organic growth perspective, Facebook was offering little. But now, with audio coming to Facebook, it's likely to get a new lease of life. Overall, audio, social sharing and voice will blend nicely for Facebook and marketers."

Brands, she feels, should start exploring this medium, with a clear strategy in place. “It depends on the purpose of your product - niche and luxury advertisers who want a premium audience will go with Clubhouse if it sticks to the invite-only format. For consumer marketing brands, it's Facebook, any day,” she adds.

Facebook also offers the option of cross-selling with dynamic ads, something Arun Iyer feels will lead to more brands “sampling the platform".

Of course, first brands and their agencies must work out how exactly they can create and use engaging audio assets. "Companion banners can be taken advantage of. With Facebook driven by native content, audio posts have to be boosted," says Dentsu’s Mehra.

What do brand marketers make of Clubhouse?

Few brands in India have been quick enough to play around with Clubhouse. For instance, Dunzo experimented with private audio rooms called Marketing Graveyard with around 70-80 participants per session, including other brands like Titan, Licious, Big Basket and Razor Pay.

"As a brand, it helps to be one of the early players on the platform as it brings in quick organic growth," says Sai Ganesh, marketing head, Dunzo, who will continue to put in time and effort into the social audio category, as it helps build user engagement.

He concedes these are early days. "Stickiness is the key factor. Retention is worrying. Social audio has a limited ‘use case’ for brands. One has to see how it shapes up and then monetise it. The biggest hack is to get celebrities and food bloggers. The audience will follow. For instance, a music channel can bring in Prateek Kuhad and have a private session. That will work well."

For CEAT Tyres, a brand that has experimented with audio through its partnership with IVM Podcasts, through the cricket show Edges and Sledges, social audio offers the scope to engage with a niche audience.

"However, for brands to join this bandwagon, it is important to evaluate what role the intended audio format plays in the brand's messaging to its TG," says Amit Tolani, chief marketing officer, CEAT Tyres.

Experts, however caution that going forward, platforms like Clubhouse will have to invest in fixing issues related to privacy, misinformation, inappropriate behaviour on the platform, and content moderation.

Presently, hosts of the rooms are given the authority to control and moderate things. And users can report problems. According to a report on Reuters, Clubhouse is investing in tools to detect and prevent abuse.

Duggirala of The Glitch cautions, "Content moderation is a point of worry as this scales up. Right now, it's more about the host setting rules for a room and removing anyone who's not following those rules. Most platforms maintain recordings of the chat. But it’s still very early days for those in the space trying to understand the best way to do it.”