Connected living and an ever-increasing reliance on smartphones has pushed digital audio – including digital radio, music streaming, and podcasts – into the mainstream.
And while the advertising industry has been busy speculating on whether last year, this year, or next year will be the year of programmatic TV, programmatic audio has been quietly and unobtrusively establishing itself as the next step on the path towards true omnichannel programmatic advertising.
So what is driving the growth of programmatic audio and why is it taking off more quickly than programmatic TV?
Audience and reach of programmatic audio
While it may not yet have reached the dizzy heights of TV, there is a large and growing audience for digital audio – expected to include 52% of the UK population this year. While it appeals to virtually all demographics it is particularly favoured by the valuable millennial age group, which increases its appeal to advertisers.
What’s more audiences can be targeted using contextual, demographic, or behavioural data in the same way as other forms of digital advertising such as display or video. There are no viewability issues with programmatic audio as users do not have to be looking at the screen or device for it to make an impact, audio ads can’t be skipped, and audiences can still listen to ads played around audio content whilst otherwise occupied.
Simplicity of programmatic audio execution
Unlike TV, digital audio is already part of the IAB’s open RTB protocol, introduced in March 2016 as part of version 2.4. These open industry standards enable buyers and sellers to transact RTB at scale across a wide range of platforms, devices, and advertising solutions, allowing standardisation across multiple touchpoints.
Because digital audio is largely consumed via mobile devices, programmatic audio is often simply an extension of an advertiser’s existing mobile strategy, making it a less complex and costly undertaking than programmatic TV. Performance can be measured in a similar way to programmatic video using established metrics such as completion rate, which can be verified by third party providers.
Programmatic audio inventory availability
Like TV, the availability of inventory for programmatic audio is limited, but it is continually growing, particularly among music-streaming services. Last year Spotify launched programmatic buying across its global inventory, allowing advertisers to use its demographic and playlist data to target the users of its ad supported service with 15 or 30 second audio spots. In February, Soundcloud announced it would also be rolling out programmatic audio with content-level targeting across the eight countries in which it operates – including the US and UK. Finally Pandora – which already uses programmatic display advertising – is set to adopt programmatic audio later this year.
While radio has been slower to embrace programmatic than music-streaming services, US-based iHeartMedia recently unveiled SmartAudio, a data-centric programmatic advertising product that will allow advertisers to target approximately 700 distinct audience segments across its 850 broadcast radio stations. The addition of digital audio to the open RTB protocol has also allowed Global’s Digital Audio Exchange (DAX) – Europe’s largest programmatic audio platform – to offer programmatic advertising across popular radio stations such as Capital FM, Classic FM, Radio X, and Heart. The recent announcement that DAX will partner with Dennis Publishing to share audience data, paves the way for more advanced radio audience targeting.
Although programmatic audio is still in its early stages, significant growth is expected over the coming months and years as both demand and inventory supply increase. According to MediaMath’s CMO Joanna O’Connell, “The true programmatic future is taking all forms of media and making them addressable and connected at a consumer level,” and programmatic audio is just one more piece of the puzzle, driving the industry in the direction of that omnichannel future.
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