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A Prelude To Audio Advertising

Klaudia Szulc

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Some Monday mornings you get lucky with your music choices. You open your Discover Weekly Playlist and hear a tune that perfectly matches the moment. It could be that those few notes or bars simply resonate well with your mood or that it’s extremely catchy, but whatever the reason, it sets you up for the day, or at least morning. You are either doing a little dance in your bathroom, still in bed, or rushing to your (home) office, and whether coming from your fancy plugin speaker or straight from your tinny phone, it’s making you feel good.

Chances are that a lot of us are surrounded by music on a daily basis. In 2019, the average American spent 2.5h a day listening to music through a streaming service. Additionally, Pandora reports that music consumption is growing and has increased by 32% this year alone.

These facts show that streaming audio is on the rise and since it is popular among most audiences, your target audience undoubtedly streams audio or online radio in one way or another.

This post will go over essential aspects of audio advertising and why it should be a part of your marketing mix. I will also write about available formats, how you will be able to actually buy it, and whether you should buy it programmatically.

What Actually Is Digital Audio Advertising And How Did It Start?

Digital Audio Advertising is a type of marketing, which focuses on sound as a medium. It covers your Spotify, Deezer, Pandora, Tidal or another streaming service of your choice. It could also be your favourite online radio station, a connected speaker, or even a connected car that delivers the sound of a digital audio experience. The term was coined in the ’70s but it took another 40 years for it to become an actual advertising channel.

“Digital audio” — a Quick tour from 2010–2020

Google was already selling audio ads through Adwords in 2008, however, the ad placements were on traditional media such as regular radio. There were other innovative forms of audio ads appearing at this time. “Commuter Ads” for instance is a company that started in 2010 with ads playing on public buses.

Pandora started with audio ads in 2010 while Spotify 2011. Dax, which is a digital radio exchange owned by Global started with its audio ads in 2014. Bauer Media Group, another radio network, which used to work with Dax also launched their own ad platform called InStream. Lastly, In 2016 Spotify started selling audio ads programmatically, and this year Google introduced their new infrastructure which makes it easier for advertisers to run programmatic audio ads.

Why audio advertising?

There are already so many options when it comes to digital marketing. Social media with approximately 3.6 billion users worldwide gives advertisers a lot more choice and not just with Facebook, Instagram and Twitter. Snapchat’s popularity is rising, as well as TikTok’s with their consumer-friendly and less-disruptive approach.

And there’s YouTube with 1 billion hours of video viewed each day and, according to Kantar, the winner in the battle with Tik Tok as a preferred advertising medium.

You might be wondering why then should you advertise on the audio channels if everyone is often mindlessly scrolling and getting exposed to so many ads already. But bear with me and hear me out before reaching your conclusion.

In the next section, I will describe the “why’s”, such as contextual targeting, “moment marketing”, sequence targeting, the share of voice and lastly, how brand safe audio ads are.

Audio Reaches Users In Non-Screen Moments

“You can’t be truly mobile when you are staring at the screen”

I recently heard during an audio webinar and there is something powerful in those words. Think about the moments when we take a bus or train. When you join a friend on that promised road trip. Think about doing sports, running cycling or being at the gym.

Also a non-screen moment

Chances are that you are not looking at your screen in those moments. Digital audio ads come in handy and they let us reach audiences in non-screen moments. Those screen-less moments are, according to 53% of Gen Z and Millennials “A nice escape” as Ron Jaworski mentioned on the Trinity Audio blog which he based on a Spotify study.

“Moment marketing”

With digital audio, you can reach your audience by contextualizing your ads and identifying the moment you want to focus on. This is possible thanks to data points owned by Spotify, Pandora, and other streaming services.

Imagine being exposed to an ad for a running shoe while you are streaming your running playlist. Think of an ad from a local concert hall, because you have been enjoying classical music so much lately. These elements let you reach your audience and customize a message depending on a moment or a context. They enhance personalisation and relevance but have to be in sync with your strategy, KPI’s, and creative ideas.

Connected devices and sequence targeting

Focusing on the right moment is one thing, but providing your audience with a story can make your messages 22 times more memorable.

Let’s say that you are driving a car and you hear an ad which mentions new speakers or headphones. A few days later you hear a similar ad, from the same advertiser. You hear it while cooking and listening to the music through your connected speaker. In the second scenario, you are exposed to the same ad, but this time with a more call-to-action approach, it could be telling you to go to the website or to click on the companion banner.

Since streaming services own the first-party data, they are capable of providing a personalized message based on the previous interaction with an ad. Such sequencing enhances storytelling and engagement and adds variety to your ad messaging. It is important to mention that a user must be using the same streaming app among all the platforms for this to work.

Share of voice

According to IAB A share of voice is “The percentage of total advertising weight per brand in a competitive set”

Looking at the audio environments, such placements offers an “intimate’ and one on one conversation between a brand and a user as only one ad is displayed at the same time. This is beneficial, considering the clutter we often experience while browsing web pages or our social media account.

Brand safety

Since most of the buys happen via a PMP buy (see below for more info), we do know where our ads will run which ensures brand safety. Whether it’s streaming services or online radio, that content has to be pre-approved before it’s published. If you, however, have other categories that you don’t want your ads to run against, this can always be discussed with your salesperson (i.e. online radio and their news stations for instance).

How addressable is my audience?

You may think that this all great, but who exactly is my audience if many people pay for premium streaming services. Globally, Spotify has the highest music subscriber market share of 32%. They have 399 million users out of which 138m are subscribers. That means that more than 50% of users are free.

Pandora in the US only has for has 60.9m users and 6.2m subscribers. It is almost 90% of those users choose for the ad-supported plan.

Soundcloud is also worth mentioning. Their websites state that through advertising each month, we can reach more than 175 million users globally.

In Europe, there is also Deezer with 14 million monthly active users, and 7 million subscribers as of January 2019. Amazon music with its 55 million users globally (no data on how many are free) has been growing 50% year-over-year and let’s not forget that they are said to be a leader on the smart speakers market.

We also have numerous online radio stations such as DAX, Bauer, TuneIn, Iheart which have a significant amount of users and are worth exploring.

Apple does not offer any ad-supported plans, so we will skip them for now.

Type of digital audio ads and content

There is a lot of choice regarding buying audio ads. Certain ad formats can only be bought directly from publishers as a managed service, where they run the campaigns. Other ads can be bought programmatically (there is a section below about that), and are often bought through a deal in a DSP of your choice. The choice is up to an advertiser and is influenced by KPI’s and overall campaign strategy.

Below I have listed the audio formats and their descriptions:

  • In-stream ads

In-Stream Audio Ads are those that you hear while streaming online radio or streaming service of your choice. You are probably familiar with them if you are a free user of any online radio platform, Spotify, Pandora, Tidal, or Deezer. You can run them on mobile, desktop and connected devices such as car and home speakers.

(Image credit — Advertise Mint)
  • Sponsored playlists / stations

Such ads allow your brand to increase awareness by sponsoring a playlist for the duration of time. Handy for raising awareness of a brand as it is possible to a sponsor playlist such as “Discover Weekly” which has a total of over 2.3 billion streams.

(Image credit — Adweek)
  • Reward audio / sponsored listening

Reward audio ads let you listen uninterrupted to the music after viewing an ad from an advertiser of at least 15 seconds (depending on a publisher’s specs). Pandora mentions that during the beta testing, sponsored listening contributed to a 12% lift in brand awareness and a 30% lift in purchase intent.

(Image credit — Business Wire)
  • Host-read ads

Host read ads are the ones you hear during podcast. They flow naturally as they are a part of a show. A Nielsen study found that podcasts advertising can contribute to higher awareness, ad recall, affinity, recommendation, and purchase intent. Additionally one of the latest Spotify studies mentions that 81% podcasts listeners in the US took an action after listening to a podcast episode. This includes looking up the product or a connecting with a brand on social media.

(Image credit — Adweek)
  • Voice-activated ads

Voice-activated ads encourage users to speak back to them upon hearing an ad. Adobe’s study shows that they drive engagement by 39% more than other formats and are less intrusive than other formats. Additionally, with the growth of connected speakers and the interaction opportunities that the voice technology gives, Spotify and Pandora platforms are slowly rolling out opportunities in this area.

(Image Credit — Voicebot)
  • Dynamic audio ads

Dynamic Audio Ads, similar to Dynamic Display Ads, use DCO solution to make the ads personalized and produce a unique experience for advertisers. It uses a multivariate feed to connect different data points such as devices, audiences segments, location, time of day (and many more) in automated ways to produce different ads. All of this happens dynamically instead of producing each single creative on its own. AdsWizz and A Million Ads are examples of companies which offer such solutions

Here is an example of a dynamic audio ad sequencing :

(image credit — Martech)

Audio creatives should resemble a similar message to your other channels. It should carry a similar message like your video, audio or social campaigns but be specific for audio and its intimate nature. You have to remember that sound drives emotions and emotions drive actions. That’s why your creatives have to be crafted in a user-friendly way, remembering that listeners can’t really tune out from them. Avoid loud voices, too many effects, be clear, and use a CTA, depending on your KPI’s.

Buying audio ads programmatically

What exactly is programmatic?

Programmatic advertising means the selling and insertion of ads in audio content like podcasts, digital radio, and streaming music services by leveraging programmatic audio-specific publishers and exchanges to buyers.

Think of it as a big auction house where there are goods to be sold (ads), an auctioneer or a middle person (publishers and exchanges) and bidders and buyers (Advertisers). The only “minor” difference is that the programmatic auction happens in a blink of an eye — 100 milliseconds.

Programmatic means efficiency, transparency and buying in real-time with a decreased amount of human negotiating. If you want to read more about programmatic, this Match20ne post goes over the most important aspects.

Who should use programmatic for audio

With audio, however, things are a bit different. You know where your ads will be shown. If you buy from Pandora then it will be on Pandora app, whether it’s a mobile, desktop or connected device. The same goes for Spotify and others. This means that you know where your ads will be shown, with no bot traffic and in a brand-safe environment. Whether you buy it directly or programmatically it is based on the preferences and needs

Advertisers who want to have all of their channels in one place…

The advancement of the programmatic technology does make it easier for advertisers to control delivery and costs of various channels in just one DSP instead of working with silos. Rather than working with different insertion orders and software, you have most of your display, video and audio campaigns in one place.

…and those who want to have a good comparable overview of the campaigns

With programmatic you have real-time control over your campaigns, which includes bid adjustments, targeting and dashboards. Additionally, a DSP is doing most of the execution in bulk, which decreases the possibility of a human error. Rather than emailing publishers and partners you can optimise and troubleshoot the campaigns by yourself.

The section below touches on the possibilities in terms of audio buys

How do we buy it?

Since programmatic audio was quite late to the party it was not that accessible until a while back. At first, it was possible to buy inventory via an Insertion directly from publishers. However, when Google made it available programmatically (for DV360 users out there) it changed the approach and possibilities in terms of measurement, targeting, and the holistic media mix approach.

DSPs such as MediaMath, Verizon, Trade Desk, and others offer programmatic audio as well, and therefore it is up to advertisers to decide which DSP they would use for running audio ads.

Buying audio ads is possible in a couple of different ways and it depends on the preferences and needs as I mentioned in the section above. One of them is to buy it directly from a publisher either by managed service or a deal. The choice depends, whether you buy your ads programmatically or directly on a format and a budget.

This section will be quite technical and might be daunting to read at times, however, is very important for the most effective choices in terms of buying audio ads (so bear with me and try not to yawn). I have listed the three I have the most experience with:

Direct Deal (Non-programmatic)

Those types of deals include pre-negotiated and fixed prices, instead of an auction. The Insertion Order is signed by both parties, where they agree on the volumes, amount of time the campaign will run for, and at what price. Direct deals are managed by partners and publishers.

Programmatic Guaranteed

This type of buy is similar to Direct Deal, however, everything happens in a DSP of your choice. There is still an agreement on the number of impressions purchased, how long a campaign would run, and a CPM price.

PMP deals (Programmatic)

Those types of deals give an advertiser the most control in terms of optimizing. The floor price (starting auction price) is agreed between an advertiser and a publisher. Campaign set up is almost the same as a regular programmatic campaign, whether it’s display or video.

And who should buy audio ads directly from publishers?

Programmatic takes a bit of investment in terms of budget and time. You need to run your campaign for a certain amount of time to answer the questions your business has. Whether it’s finding the right audience, adjusting creative messaging, seeing benchmarks or setting goals. If you are just starting, or still figuring out the “big” channels such as video, display and social, it is better to simplify things and start with Insertion order deals or use a managed service option from a publisher.

What’s next?

Once you decide that you want to run audio ads, there is a question of how do you want to run them. If you do have a range of different channels and already buy display and video in one place, then buying audio can be done similarly. If you are just starting out or only using social, and have no DSP plan it is better to reach out to the partners and publishers directly.

Thanks for reading. Drop me a message /comment or feedback in case of anything!

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