Your Guide to Programmatic Audio Advertising
As a part of the 2020 omnichannel strategy, LiquidM is committed to developing and offering all major advertising channels, formats, and ad units to marketers across the globe. Anticipating the upcoming release of our programmatic audio solution we want to review the rise of the programmatic audio, explore its benefits, and reflect on the reasons why brands should consider including it in their advertising strategy.
The chances are high you are using streaming services to access audio content when, where and however you like. If so, you are not alone. According to Midia’s research, the streaming market accounted for 304.9 million music subscribers globally at the end of June 2019. And that’s just the latest figure we could get our hands-on.
Driven by the spread of the always-on lifestyle, IoT, and mobile device usage, the demand for digital audio content is continuously growing. Based on the eMarketer report, an average US mobile app user spends more time listening to audio content than engaging in any other type of activity.
The increased popularity of podcasts, digital radio, and music streaming services have opened up new opportunities for businesses to reach users in a more efficient and engaging way. The first attempts to monetize digital audio were made as early as 2013. But it was only in 2018 that big players like Google officially launched their audio advertising solutions. With major contenders stepping up their audio game, the channel has finally received the recognition needed to ignite its adoption across the market.
So let’s talk about why programmatic audio is the next big thing on the Ad Tech market and we’ll start from the very basics.
What is the Programmatic Audio?
Programmatic audio is an automated process of buying ad placements and inserting ads within digital audio content such as podcasts, streamed music, and online radio.
While “programmatic” is an umbrella term that refers to the automated nature of the selling/buying process, “audio“ is merely an additional creative format that is now available to digital advertisers. In the on-going fight for users’ attention, advertisers are bound to optimize resources and follow to where their audiences were. And their audiences are increasingly streaming music and listening to podcasts.
A different way to approach programmatic audio is to look at it as a revamped version of the traditional radio ads that comes with all the perks of digital advertising. Features such as precise targeting, real-time reporting, and advanced optimization capabilities may not surprise seasoned programmatic buyers but are in fact revolutionary for traditional broadcast media buyers. But more on it to come below.
How Programmatic Audio Works
The industry’s first attempt to standardize the audio advertising ecosystem was the IAB’s Digital Audio Ad Serving Template (DAAST) developed in 2014. DAAST provided guidelines for audio ad delivery, execution, and reporting up until 2018 when it was merged into VAST 4.1. Despite fundamental sensory differences, video and audio shared enough similarities to be merged into a single spec. Since the deprecation of DAAST, VAST 4.1 is the primary framework overlooking programmatic audio advertising.
In addition to providing common standards and governing principles, IAB has also outlined a number of the most widely used formats for audio advertising:
- Recorded Spots (sometimes referred to as Linear Ads) – prerecorded standard 15, 30, or 60 second-long tracks that run before (pre-roll), during (mid-roll), or after (post-roll) a featured audio content. The spots can run by themselves or with other units back-to-back (Ad Pods).
- Companion Ads – a clickable visual element that can accompany audio ads.
- Native Ads – the ads are typically recited by the podcast’s host and may contain endorsements. These irregularly-timed units can be inserted dynamically or integrated into the content permanently. Similar to the Recorded Spots, Native Ads can run in pre-, mid-, or post-roll positions.
- Rewarded Audio – identical to Rewarded Video, these are 5-15 second-long in-game audio ads that provide a bonus or unlock an achievement upon the audio completion.
- Branded Channels/Playlists – customized channels and playlists that can be branded by the advertisers on the streaming platform.
- Branded Podcasts – podcast segments, episodes, series, or individual shows produced by the creators on behalf of a brand. created on be.
- Voice Activation Ads – an interactive voice-enabled audio ad that prompts users to engage directly with the ad using their own voice. A few companies have already implemented Voice Activation Ads in the marketing campaigns. Here’s a real-life case study from Mazda’s Continuous Dialogue Ads that describes the campaign goals, execution, and final results.
Audio Ads can reach audio audiences on a number of devices, including:
- Smart Speakers (Amazon Echo or Google Home-like devices)
- In-car Dashboards (Apple CarPlay or Android Auto)
While mobile and desktop are two mediums programmatic buyers are well aware of, Smart Speakers and devices designed for in-car media consumption are the crucial factors to be reasoned with. Both show tremendous growth in device usage and primarily target audio listeners.
If you want to learn more about all devices that can be used for audio advertising, we suggest you read the IAB article Recommendations for Marketers in a Screenless World. It gives a detailed account of each device as well as lists the particular benefits of using one over the other. Among other things, it is a good educational piece to be added to your audio knowledge base.
Major Benefits of Programmatic Audio
There are numerous reasons why advertisers turn to audio advertising or should consider adding this new format to their marketing plan.
As you might have guessed from our introduction, one of the major benefits of audio advertising is the size of its audience. Only in the US, an estimated 192 million users consume digital audio content monthly.
Wonder what exactly are all those people listening to? Thanks to the Statista report, we can provide you with a list of most popular music streaming services in the United States and their MAUs (monthly active users) in September 2019:
Apple Music: 49.5 M
Spotify: 47.7 M
Pandora: 36.8 M
SoundCloud: 34.2 M
Google Play Music: 21.9 M
iHeartRadio: 19.9 M
Amazon Music: 12.7 M
Shazam: 10.6 M
SiriusXM: 7.6 M
TuneIn Radio: 6.6 M
The success of the audio advertising lies not only in the size and continuous growth of its audience but also in the kind of the audience itself. While showing the positive results across all age groups, audio is particularly popular among the tech-savvy millennials and gen Z (12-34 y.o.). This presents a wonderful opportunity for marketers to reach a younger audience and form long-lasting relationships that will bring a higher lifetime value over time.
Premium Brand-Safe Advertising Environment
Similar to CTV, audio ads are served in the premium low-risk environments guaranteed by server-side ad insertion and traffic filtering. In addition to supply-side security measures, advertisers are in full control of their inventory selection and can easily black and white-list the targeted traffic down to specific ad placement to avoid any unwanted supply.
Besides, it is important to remember that a lot of programmatic audio advertising occurs in the Private Marketplace. The use of Deal IDs or deal packages guarantees you have absolute control over where your ads eventually appear.
Screen Off, Audio On
Audio ads have the power to reach the audiences when no other formats and channels can. When we commute, take care of the household chores, or are otherwise involved in the activity that keeps us off the device screen, audio is the only way for the brand to connect to the user and deliver the message. And the screen doesn’t have to be on for this experience to happen.
Unlike display or video ads, that are delivered alongside the publisher’s content, audios are served one at a time making it less possible to divert the user’s attention. Additionally, there is no need to worry about the ad blockers, oversaturated pages, pop-ups, or a myriad of other stimuli that may otherwise distract the user.
In general, audio ads are perceived as a better and less intrusive alternative to other types of creatives. In cases, such as podcast sponsorship, as many as 78% of listeners approve of the audio advertising given it supports the content creators.
No Cookies, No Cry
Delivered mostly in-app, audio advertising depends less on cookies which comes important for Data Privacy & GDPR topics.
With programmatic audio, advertisers can leverage the flexibility and efficiency of their favorite programmatic features, including numerous first and third-party targeting solutions. Similarly to video and display inventory, they can target audio reach by GEOs and locations (countries, cities, regions, postal codes, and streets), demographics (gender, age, language), device types, audiences, and 3-rd party data.
Since most of the premium audio publishers provide access to their top-notch inventory on a PMP basis, advertisers get a unique opportunity to use audience insights. They can leverage available audience data to reach relevant prospects and improve the performance of their audio campaigns.
The list of audio benefits wouldn’t be complete if we didn’t mention any of the performance metrics. We’ll let the numbers talk for themselves. According to Nielsen’s 2017 report, audio ads achieve a 24% higher recall rate than their display counterparts and are twice as likely to boost the user’s purchase intent. Furthermore, the audio format appears to be more memorable than TV, with a 9% higher ad recall when delivered in a contextually relevant environment.
When it comes to podcasts, the format has shown equally tremendous results. Midroll makes a case of podcasts scoring two to three times more engagement as opposed to radio. And what’s even better, it’s not all about branding KPIs as another one of the companies studies claims that 60% of podcast listeners made a purchase from a podcast ad. With podcast advertising revenues believed to surpass $1 billion in 2021, it’s high time to consider how to integrate audio advertising within your programmatic strategy.
Outlook & Limitations
Incompatible technology as well as lack of demand have been commonly cited as the major challenges of programmatic audio. Let’s break these issues down and review them in detail:
- A need to improve current industry standards. Audio is a relatively new channel on the market and, naturally, it will take some time to perfect programmatic guidelines and align market players. Having said that, the IAB Consent Framework is of particular concern for programmatic audio adoption in EMEA as most audio publishers don’t have clear procedures for consent collection.
- Lack of standardized measurement. Unlike video or display, audio ads don’t rely on visuals to appeal to the audience. This major difference, however, hasn’t yet been reflected in the adtech vocabulary. Faced with a lack of audio-specific KPIs, advertisers resort to measuring their campaign performance with completions, impressions, clicks (when Companion Ads are employed), and other common metrics.
- Educating advertisers is crucial. Programmatic audio may be spreading like a wildfire among publishers, content creators, and technology providers, but that has not been the case for media buyers. Thus it is important to educate advertisers on the value that programmatic audio can bring to their brands.
In addition to these, lack of transparency, finite supply, and limits of the PMP marketplace are among other issues that prevent larger adoption of the programmatic audio. Despite the significance of all of the mentioned topics, they are all subject to time and are highly to be resolved with the timely development of the channel.
Programmatic audio is a new exciting step in the development of the digital ecosystem. Growing affluent audiences, premium environment, and engaging creatives are just a few of the advantages the new channel brings to the online advertising table.
Undoubtedly, there is still some work to be done to improve the current ad serving standards, match the existing audio supply and demand, as well as develop audio-specific measurement metrics for programmatic advertising. Nevertheless, we are sure that with time, proper guidance, and collaborative market-wide effort, advertisers will be able to leverage the power of programmatic audio to its full extent in the nearest future.
Stay tuned for more updates about the LiquidM audio solution! More to come soon!
Want to Know More?
Do you have any questions about the programmatic audio advertising or our upcoming audio solution? Drop a line and our experts will get back to you with best possible insights and actionable advice.
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