Nevertheless, with the growing reach and popularity of digital audio such as streaming services, digital radio, and podcast streams; audio advertising is undergoing a transformation. Digital audio advertising, the delivery of advertisements for this newly growing digital audio platform, is gaining rapid traction.
It’s easy to see why. With the growing popularity of streaming platforms like Pandora, Spotify and podcasts, the number of people listening to digital audio content is climbing at a rapid clip. In the United States alone, the digital audio advertising is projected to achieve market volume of $6.66 billion by 2027. Overall, in the Digital Audio Advertising segment, the number of listeners is expected to touch 231.2 million users by 2027.
Empirical evidence shows that precisely targeting audio consumers yields substantial benefits for advertisers and publishers. This is where digital audio advertising comes in. Although it sounds simplistic, it is significantly superior to traditional methods in terms of delivering content to a targeted audience, assessing campaign impact, and providing a greater ROI.
We discuss the advantages of digital audio advertising and how it creates value for advertisers and publishers looking to maximize their marketing dollars.
Why digital audio advertising matters
This means advertisers benefit in a variety of ways, including:
Efficient consumer reach
People listen to digital audio not only while driving, but also during their personal time, like exercising, running, or working remotely. Audio content remains popular because it does not require consumers to pay visual attention, in turn allowing them to do multitasking. What’s more, the growing popularity of smart speaker devices provides instant access to their favorite audio content anywhere, anytime.
Given that consumers choose to listen to content that’s meaningful to them, advertisements or messages delivered as part of such digital audio content has the potential to resonate better. Another plus is that there are fewer chances of digital advertisements being blocked by ad blockers.
Programmatic audio advertising allows you to place ads in the context of an individual consumer. This means you can reach the target audience based on the context of the role your product plays in the consumer’s life and their demographic information, behavior, geo-location, and even device type. Let’s say a consumer is listening to workout songs. Imagine the impact of placing an ad for a healthcare product app in between the songs. Such strategic placement could be a gamechanger.
Programmatic audio advertising also allows you to gather real time insights into user response to the advertisements. Today, smart devices empower consumers to act on an advertised product – explore it in detail, find similar products, and more. This translates into a deeper understanding of the campaign impact – how the campaign is faring in terms of engaging consumers based on the location, demographics, and the like. It also helps you better understand your consumer base and evolve new targeting strategies.
Optimized advertisement costs
Audio advertisements score over video-based advertising significantly where cost is concerned, benefiting advertisers immensely. Thanks to the advanced adtech available today, the delivery time of the ads has shrunk considerably. These enhanced capabilities are already reducing the cost for forward-thinking marketers and advertisers and helping them quickly drive down the cost of their campaigns.
How programmatic audio advertising creates value
The adtech ecosystem comprises eight fundamental components (see Figure 1).
Figure 1: Typical adtech ecosystem
The ad inventory is bought and sold using various tools, without the need for face-to-face deals. The targeted advertisements can be placed in banners, album art, or pre-roll (before the content) or mid-roll (in-content).
Advertisers and publishers can easily complete these ad-related negotiations and transactions online, in one of the two ways, with the help of automation.
The changing landscape of the adtech space
The industry is getting increasingly consolidated with big media organizations buying smaller players to provide a range of offerings and control the advertising space. This could potentially lead to industry dominance by a few players. The good news is that even though Facebook and Google dominate the space now, new players are emerging to offer more targeted solutions specific to businesses.
Privacy concerns are yet another challenge to contend with. Introduction of regulations like General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA), will limit the capability of DMPs to target their end audience. This requires the digital advertising industry as a whole to figure out better ways to anonymize user information to ensure data safety and privacy while continuing to offer targeted services.
The future is digital
As digital audio adoption skyrockets, the reach of programmatic advertising is also expected to increase proportionately. With the advancement of AI, machine learning, and big data, adtech platforms are poised to accurately analyze and categorize user behavior, allowing advertisers to better target their audiences and publishers to control their inventory.
As publishers and advertisers look for ways to increase their penetration of mobile and smart home devices, adtech companies are ramping up innovation to target audiences with greater precision and provide transparent platforms for content delivery.
Thanks to the wearable smart devices and the ability to leverage big data, AI, machine learning, and IoT, delivering hyper personalized ads is fast becoming a reality. Innovation around smart stream-capable devices will also continue to grow, potentially ushering in an era of interactive audio ads that will allow listeners to respond to ad content through smart speakers.
Clearly, the future of digital audio will see game changing innovation, creating valuable opportunities in the adtech space. Brands that invest wisely in this space will be best positioned to capture the attention of consumers and optimize their marketing dollars.