Clubhouse Is at an Inflection Point

Clubhouse, the social audio app that’s taken the internet by storm, is worth a lot of money. But with concerns mounting over its posterity post pandemic, how much time marketers should invest in it is still a question mark. The company could be valued at $4 billion through an upcoming funding round, according to a new Bloomberg report. For context, that puts the year-old platform at the same value as the creator platform Patreon, which announced a new funding round Wednesday, and only a few billion shy of Reddit and Discord. While the app is drastically changing the social media conversation and spurring industry leaders like Facebook, Spotify, Twitter, LinkedIn and Discord to develop or acquire rival platforms, Clubhouse’s valuation could be more fueled by hype if the recent install numbers and platform awareness is much to go by. According to the app analytics firm Sensor Tower, only about 16 million people have downloaded Clubhouse since its debut a year ago. While it’s still invite-only and excludes Android users, the app had a sluggish March in which new installs fell drastically by some 73%. After surging from 2.4 million downloads in January to 9.6 million in February, Clubhouse had only 2.7 million downloads in March, according to Sensor Tower. Still, the app is expected to grow, especially when it releases its Android app, which is expected within the coming months. And with Discord launching Stage Channels, Twitter Spaces coming out of beta sometime this month, and Spotify acquiring Locker Room, the social audio experience that Clubhouse pioneered will soon reach a significantly larger audience. That growth is necessary for any kind of prolonged advertiser interest. Currently, 79% of U.S. adults have never heard of Clubhouse. “Scale in all of its forms is an issue,” Debra Aho Williamson, the eMarketer analyst, told Adweek in an interview. “Social audio is a fraction of the size of social networking or podcasting.” But the kind of excitement that Clubhouse has generated is fanning the flames for all social audio ad formats, even though the media still a long way off from mass-adoption. eMarketer estimates that, in the U.S. this year, there will be 212 million social media users and 118 million podcast listeners. Older users and post-lockdown living But there are many open questions about whether this type of behavior is here to stay. For one, there’s a demographic question. “For the most part, the types of social media platforms that have really taken off have appealed to a younger audience,” Williamson said, citing Facebook, Snapchat, TikTok and Instagram as examples. “We don’t know a whole lot about the demographics of social audio users right now … but it’s not as if [Clubhouse] is a young person’s medium.” Another reason Clubhouse has found success, Williamson writes in the eMarketer report, is that it “fills the pandemic-driven need for human connection and avoids videoconferencing fatigue.” As the Covid-19 pandemic begins to subside, there’s a looming question about whether social audio can stay in vogue. “It’s really hard to know [about] after the pandemic,” Williamson said in our interview. “If [people] are going outside and—in the business crowd—going to events and conferences … are they going to go, ‘Oh yeah. Remember when we used to do all this on Clubhouse? Wasn’t that quaint? That was a flash in time.’” Credibility through thought leadership Social audio is more of a space for organic conversation and “thought leadership,” particularly in b-to-b environments. “Brands can position themselves as thought leaders in the space and gain some credibility,” Jessica Dooley, social marketing lead at Mindshare said in the eMarketer report. “A consumer packaged goods company that has a lot of organic food products could host a conversation around the value of eating organic, and what foods are most important to buy organic if you have to prioritize based on your budget. They're not talking directly about their products; they're becoming a thought leader in the space.” It can also be a place for branded chats through partnerships with hosts, or other influencer marketing-type opportunities. “Just like a brand has their Twitter handle, Instagram or Facebook page, why not have a branded room?” Media Kitchen’s Barry Lowenthal said in the report. However, just because Clubhouse is the first mover, it doesn't mean it will be the most successful, Williamson added. “You could look at Instagram Stories as an example of the other side of that, where Snapchat popularized Stories and Instagram took it to a new level.”

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Clubhouse Is at an Inflection Point

Can it survive post-pandemic?

Scott Nover

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