Tuning into programmatic audio advertising

Programmatic audio advertising is where advertisements are sold and inserted in real-time into audio content including podcasts, digital radio and audio streaming services.

Programmatic audio advertising allows advertisers to improve targeting, which ultimately leads to greater campaign success. It works in the same way as display programmatic advertising, which uses AI algorithms to strategically distribute ads based on user behaviour and interests.
 

Why might a brand consider an audio advertising campaign?

The audio space saw massive growth during the pandemic, with many of us increasing our engagement with audio entertainment. This continues to rise as we continue with our always-connected and always-consuming ways. The main advantages of audio advertising for brands are:

1. Cost-effective: Within podcasts alone, ad revenue grew 28.6% in 2022. Given the economic pressures ahead in 2023, brands are even more focused on increasing engagement. Programmatic audio advertising provides a cheaper alternative to display programmatic advertising, meaning brands are likely to increase their audio advertising spend
2. Targeted audiences: Audio ads can be targeted to specific audiences based on factors such as location, demographics, interests and behaviour, which tends to result in a higher rate of conversion
3. Brand awareness: By using unique and distinctive sounds, brands can create memorable and lasting impressions with listeners
4. High engagement: Audio ads create a more immersive and engaging experience for listeners thanks to their seamless integration. Additionally, as the audio space grows, so too does the ability to broadcast audio advertising, which is attracting the attention of brands due to the potential for distraction-free engagement with audio consumers. This also allows listeners to multitask, giving brands the ability to reach consumers while they eat, cook, commute, exercise, drive etc
    

What are the issues from a data protection perspective?

The broad range of devices and players that audio ads can be served on means that there is a varying scale of ‘addressability’ (or the ability to obtain consent from the listener).

This ranges from players controlled by the media owner, that can implement consent mechanisms, to screenless devices such as smart speakers where there is no way of implementing consent mechanisms.

Aside from the players controller by the media owners, there isn’t a huge amount of first-party data available. However, where first-party data is collected - such as location, listening habits, and demographic information - it must be handled in compliance with privacy regulations, such as GDPR. As part of these obligations, the listeners’ data must be stored securely and protected against unauthorised access.

The audio players have considered how they can create contextual categories (e.g. podcast subject, music genre, radio channel) which, without requiring personal data of the listener, can infer certain behaviours or interests that can then be used to make assumptions about the listener’s interests and inform advertiser’s targeting strategies.

These contextual categories are more important now than ever in light of the demise of third-party cookies. Large tech companies such as Apple, have recently invoked ‘App Tracking Transparency’ which has been a catalyst for accelerating this change. Similarly, Google are discontinuing cookie tracking from 2024. This means brands will need to focus their advertising spend by other means than direct data gathering and consumer targeting.

Audio advertising’s contextual categories allow a good level of targeting that does not rely on the hyper-specific data collection the industry has been so reliant upon.
 

Is audio advertising as effective as display advertising?

This is hard to say as measurement is a key challenge for the audio advertising industry.

Due to the nature of audio consumption, it’s difficult to measure the levels of engagement (traditionally captured through ‘clicks’ in display advertising) and the success of campaigns. Although, arguably, audio ads could be considered more premium by advertisers given they don’t compete with the listener’s attention in comparison to display adverts, which undoubtedly increases engagement. Combine this with the fact that podcast audiences tend to be incredibly niche, which enables meaningful engagement with brands’ target demographics.

Brands are having to rethink their strategies for collecting and sorting consumer data and so, if brands can accept a less meaningful means of demonstrating impressions, audio advertising is likely to be of increasing interest.
 

Who benefits from audio advertising?

Publishers, brands, and consumers are set to benefit from the growth and innovations in the programmatic audio advertising space. The last year has seen many new audio advertising publishers enter the market, offering more specific, curated marketplaces. For example, Google has created its audio ad space and a former director from Spotify has launched a one-stop-shop intermediary between brands and agencies called Audacia. This allows greater control for both buyers and sellers in the supply chain, which in turn will ensure adverts are deployed in the correct environments and allow more efficient focus on target audiences.

Audio advertising is providing a fresh outlet for brands to connect with target audiences, giving brands a new, more personal and engaging means of connecting with consumers. In light of this, it is perhaps unsurprising that a recent study revealed that podcast advertising commands the highest levels of attention across media formats.