What you need to know about programmatic audio advertising
Updated: Nov 29, 2021
Digital audio listening is continuing to reach record levels each year, with now an estimated 192 million in the US alone listening every month. Just for the record – that’s 68% of the total population 12 years old or older. And with so much listening, there is bound to be audio advertising as a way to monetize the thirst for eardrum-oriented content.
And there is: the first half of 2019 saw digital audio advertising revenue reach $1.2 billion, a 30.1% increase over the same period a year before. Audio advertising is having its moment under the spotlight but compared to its automated display and video peers, it’s been relatively slow to catch on in terms of spending. That’s where programmatic audio steps in.
What is programmatic audio?
Programmatic audio advertising is automated selling and insertion of ads in audio content such as podcasts, audio articles, digital radio, and streaming music services. As a result, advertisers get better targeting, measurement and retargeting to execute campaigns with great efficiency.
It’s an umbrella term that covers everything related to buying and selling of digital advertising autonomously in the audio space.
Another way to look at programmatic audio is as a natural extension of the online advertising ecosystem. Having audio inventory in the mix has opened up a new way for brands and publishers to connect with audiences. The use of automated systems for purchasing impressions is the backbone of online advertising, and the automation of virtually any format and channel provides efficient and more effective transactions, streamlining the process and combining all digital advertising efforts into one technology platform.
Only more sophisticated.
Why is programmatic audio a big deal?
With all the innovation that’s happening, constant connection to the Internet, and the proliferation of IoT in our lives, users are ever closer to being online 24/7. In times where audiences are oversaturated with visual advertising, programmatic audio is important as it allows brands to evolve their marketing and advertising strategies in a natural way. It offers the ability to reach a highly targetable and mobile audience in a brand-safe environment where screens are simply not an option.
Screen exhaustion is real: more than half of Gen Z and Millennials – the Holy Grail of advertising demographics – say there is “too much visual stimulation”. 53% of them consider audio as “a nice escape” from all the ocular bombardment and experience the medium as something that completely surrounds their everyday life. Hence, you can leverage an audio channel to increase ad engagement and reach these demographics.
Unlike their visual counterparts, audio ads are served one at a time where an advertiser can command the listener’s complete attention to drive engagement. The power of audio advertising (arguably its greatest one) is that it doesn’t need a screen to make an impact, allowing for personalized audio messaging to reach people where visual advertising simply can’t: when driving to or from work and listening to an audio article, working out at the gym and running to your workout playlist, listening to a podcast while making lunch, and so on.
According to the Midroll Media Report, 60% of podcast listeners made a purchase after listening to a podcast audio ad. A study from Edison Research and the PodcastOne called Super Listeners Study showed 70% of frequent podcast listeners considered buying a new product or service after hearing about it on a podcast. In addition, the listenership is more attentive to ads heard on podcasts as 44% agree that they pay more attention to advertising on podcasts than on other forms of media. Nielsen found out that audio ads are more than 2x as likely to lift purchase intent and information intent than display ads, also driving 24% higher recall.
As for ad receptivity levels, a study by MAGNA and IPG Media Lab in partnership with Pandora found that listeners are generally 35% more open to ads and specifically receptive when relaxed and focused in comparison to viewers, with fairly even results across different scenarios. The study also showed that even Generation X, the ever-elusive demographic, has a 32% higher receptivity to audio ads than video ads.
All of this is great news for advertisers who are considering taking their game to the next level, especially when it comes to reaching a highly engaged audience in a meaningful and impactful way. Audio’s omnipresence offers a unique way to fill otherwise untouchable voids in the user’s buying journey. And, as a bonus – if people are listening on the go, they are far less likely to stop what they’re doing and mute a 15- or 30-second ad, certainly not in the same sense as we use a commercial break on TV for a quick action like grabbing a snack.
Benefits of programmatic audio
Obviously, the major benefit is having real-time insights about your audience based on which you can better understand it, segment accordingly, and optimize your campaigns as you go about your business. In that regard, audio doesn’t differ much from video as you can track the effectiveness of campaigns in much the same way.
The same goes for targeting and serving ads only to people who are within the specific area, have a specific interest, belong to targeted demographic, and so on. In addition, there are some audio-specific things like genre type or playlists. The ability to target a user in the right place at the right time and within the right context is vital for a brand looking to connect with its audience in an authentic, immersive, and contextually relevant way. In doing so, it’s also filling a gap in the customer journey.
All of the above leads to arguably the main benefit of programmatic audio: having a multi-channel marketing and advertising platform to reach customers whenever and wherever they are. There are already accompanying display ads (banners) paired with audio, tagged to provide information as to who listens to what or when. Beyond those, programmatic audio insights offer a greater level of understanding of your target audience’s behavior, as well as how your campaign is performing simply because there is more data to work with, which means better targeting.
Listening also creates lesser dependence on cookies which is very important when it comes to regulation such as GDPR and CCPA. In essence, it’s a win-win situation for both advertisers and publishers.
One more thing: it’s a lot harder to block audio ads than their display counterpart (not to mention audio advertising is mostly linear and not overwhelming which makes it less skippable). Sure, there are some audio blockers but the technology is in its infancy and so far poses little threat to a medium where skipping an ad is already as easy as clicking or tapping a button. Plus, developing ad-blocking tools in the audio sphere is a tough gig as there is a wide range of formats (which we’ll touch upon in a couple of minutes) like native ads read by podcast hosts and dynamically-inserted ads to detect and successfully “neutralize”.
Quick look at programmatic audio during the coronavirus
As far as programmatic audio advertising trends, there is even an argument to be made that audio advertising is durable. Even in extraordinary times such as the COVID-19 pandemic, it is faring relatively unscathed. The disappearing commute hasn’t affected podcast ad revenues with brand advertising on the format remaining healthy. Audio advertising is much easier and more efficient to adjust, which is why many advertisers have been able to pivot their messaging more quickly than is possible for other digital media formats and make sure it’s up to par with the current cultural climate.
With consumer behavior changed as more people now tune in at different parts of the day rather than the usual commute hours (the time most associated with audio consumption), there’s more listening happening in homes. It has prompted a 100% surge in use of Amazon Alexa and Google Assistant, followed by a smart speaker and display market increase of 6% in North America in the first quarter of 2020 compared to the year before.
There is also an increase in other types of devices people are using for audio streaming such as gaming consoles and smart TVs. All of them together make audio advertising an attractive option for brands and businesses looking to keep in touch with users “trapped” at home, especially with some forms of advertising such as TV and event sponsorships declining or being outright cancelled.
As a bonus, it doesn’t take much to rework and reuse existing creative if brands turn their focus to audio and its programmatic instance. This is important as an audio format could help alleviate advertisers’ concerns that marketing messages may come across as insensitive during the pandemic.
Formats and applicable use
For brands advertising directly, it’s not hard to introduce programmatic audio next to other digital advertising methods because audio is a largely distraction-free medium. For advertisers, it’s equally easy as it’s largely the same programmatic principle video ads work on. Various formats and how they are used is what makes the difference. There are:
Recorded audio ads – available in standard lengths such as 15, 30, and 60 seconds, come with three basic placings: pre-roll (before audio content), mid-roll (during a section), and post-roll (after), and can be dynamically inserted.
Companion display ads – static banners that are paired with the audio ad track and displayed in the audio unit while the content is playing.
Native ads – most associated with podcasts as they are often read by its host. There is no set length and these ads can be permanently integrated into the program (not programmatic) dynamically inserted in the aforementioned three placings.
Audio ad pods – a one-by-one set of two or more ads within the same content.
Rewarded audio – specific to video games, these are identical to its video counterpart where a5 to 15 seconds long in-game audio ad track offers in-game bonus to the user upon completion.
Voice-activated ads – interactive ads with specific calls-to-action that elicit a response from the listener just by speaking and help establish a closer connection between the advertiser and the listener.
In order for an audio ad to function, there needs to be a demand-side platform present that supports the desired format. It’s important to note that not every programmatic platform is designed the same and that most have a different amount of supply-side platforms where the ads can be delivered.
Now that you know what formats you can use and how, the next step is to know where to place these ads. Here is a quick list of where listeners could enjoy your audio ads:
Voice-enabled content such as voice skills and actions, courtesy of voice assistants such as Amazon Alexa and Google Assistant
If you want to delve deeper into technical details, I recommend checking out Digital Audio Ad Serving Template (DAAST) by IAB. It’s a common set of specifications for audio ad delivery, execution, and reporting across a wide variety of devices and platforms, and it’ll basically tell you everything you need to know about the background processes of programmatic audio.
Ad opportunities beyond podcasts
While audio has always been a part of our daily life, we are only now starting to realize just how influential it can be both from a consumer and brand standpoint. Just as on-demand video is transforming how people watch TV, so is audio changing the ways people consume content.
Podcasts are an obvious and much lauded example but one other form of audio content silently sweeping the media landscape is audio articles. Leading publications across the globe are providing a listening experience to boost reach and retention through native audio solutions such as the Trinity Player because that is what’s expected now. This is a loyal and very active listener base that knows high-quality and trustworthy digital content when it hears one.
Audio articles in particular are a potentially lucrative programmatic advertising avenue that literally didn’t exist just a couple of years ago. Plus, it’s very effective. In these audio-first environments, 70% of listeners say that because they are attentive to audio streaming while commuting, they remember the ads they hear. Unlike other digital advertising types (and media in general), programmatic audio allows buying of audiences, not content or screens as most advertisers are used to, and to connect with in an emotional and contextually relevant way.
In other words, it’s access to unique media that offers laser focused segmentation and contextual targeting of ads based on the content people are listening to. Thanks to advances in AI such as specifically synthesized voices for specific content types (e.g. news) that increase naturalness and expressiveness (two main factors in getting closer to human voices) or audio analysis that delivers personalized distribution at scale, the audio market will not only grow but yield entirely new opportunities for revenue (e.g. more options to create, track, optimize, and monetize audio inventory). For advertisers and their fellow publishers looking for sustainable monetization of audiences, this is arguably the answer they are looking for.
Tuning into future
What should make any advertiser weak at the knees about digital audio advertising and programmatic audio is a simple fact that people really like audio. From the hugely popular podcasts to growing audio articles and streaming audio, there is more listening happening than ever before. With a fairly cheap cost of entry and a steady listening interest, numerous brands and publishers are shifting to the audio landscape to get a footing in the medium that can not only engage their readers but also build a new revenue stream. As you know, that means more opportunities for advertisers.
Today’s lifestyle is conducive to audio consumption. In times when people are doing things on the go, it’s only natural that both sides synchronize and reach their audiences wherever they are. And, sure thing, keep their ads relevant. Programmatic audio advertising can be that progressive source of monetization, especially in situations where visual channels fall short. It’s a cost-effective tool that should be a mainstay in every advertising and marketing strategy.
We are already at a point where audiences are spending more time in screenless media, absorbing information through their earballs. Programmatic audio enables more touch points with people in ways brands can’t get with visual media, thus helping fill the gap between websites and devices and improving user experience along the way.
Thanks to the use of contextual targeting through contech (content technology), audio as a medium is on par with the rest of the peers in the digital advertising industry. It’s about the audience reach (especially the young(er) segment) as much it is about engagement and understanding the finer parts of their behavior. Programmatic audio is an exquisite opportunity to capitalize on a highly positive sentiment on audio (even in difficult times like the COVID-19 crisis) and develop a stronger relationship with the target audience.
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