Posted By: Heather Prather on November 15, 2016
Music, no matter the genre, culture, location or avenue, reigns supreme as the single most consumed entertainment medium in the world. Since radio’s infancy, music, news and all things broadcast have had a lifelong companion: Advertising.
Since the first radio ad hit the airwaves in 1922, the American Telephone & Telegraph Co. established WEAF in New York as a "toll station" for people to pay broadcast commercials. Much to ATT&T’s dismay, for the first six months, advertisers had no interest in paying said, “toll”. That is, until August 24, 1922. Queensboro Corporation paid $50 for a ten-minute message promoting the sale of apartments in Queens, New York. The commercial first aired on WEAF from 5:00-5:30 PM and aired a total of five times, thus the golden age of radio advertising was born.
Fast forward to today’s massive shift in consumer content consumption and the demand for better experiences. This shift requires advertisers to be savvy enough to accurately and positively reach consumers through channels that are highly important to their current demographic. In short, knowing precisely who you’re talking to, what they want to see, where their eyes spend the most time and when, is invaluable.
Enter Programmatic Audio Advertising!
While video is the mainstay for programmatic advertising currently, growing interest has over 55.1% of marketers in agreement that audio may be the tipping point for the adoption of programmatic across channels. The payoff? Over half of marketers polled (68.9%) also feel that with programmatic targeting and attribution, advertisers are able to trace audio’s impact like never before.
What It Is
Today, the majority of audio advertising media buys is conducted via that somewhat inefficient manual RFP. This is one area where programmatic is a standout option. By eliminating manual RFP through technology that automates the selling, buying, placement and optimization of media inventory, marketers and advertisers are able to deliver customized and personalized messages to audience based on real-time data not available with RFP.
According to IDC, programmatic radio advertising is growing rapidly:
- $7.5 million in 2014
- $37.5 million in 2015
- $187.5 million is expected in 2016
- $663.1 million is expected in 2017
Where They Listen
Broadcast Radio (AM/FM)
Broadcast radio remains the #1 powerhouse media channel with 86% of drivers preferring old school radio as their primary source of front seat entertainment. With a dedicated listener base in place, broadcast radio’s reach is massive, especially during morning programming.
Though programmatic for broadcast radio is not broadly available worldwide at present, Jelli's SpotPlan currently offers advertisers programmatic with a massive reach in the U.S.
In April 2016, SpotPlan for Advertisers launched its demand-side platform (DSP) for broadcast radio advertising in partnership with iHeartMedia and Katz Media Group. With iHeartMedia's inventory of 858 stations with a reach of a quarter of a billion monthly listeners in the U.S. - the platform comprises the largest conglomeration of radio stations in the U.S.
Music services platforms like Pandora, Spotify, iHeartRadio, leverage logins, profile information and user data to enable advertisers to reach and deliver relevant, contextual messages and content to their target audience/consumers based on age, gender, preferences, listening habits, etc.
- An impressive 89-91% of one-billion streaming listeners globally, choose ad-supported channels.
- In April 2015, 53% of Americans 12 years or older had listened to online radio the past month and 73% had listened via smartphones in the last week, vs. 61% who listened via desktops and laptops.
Programmatic audio shares many of the same benefits as programmatic display and video, with some distinct differences.
Mobile drives audio since 75.8% of U.S. digital audio listening occurs on mobile vs. 24.2% on desktop. In a recent survey, 35% of U.S. adult cellphone owners say that they listen to online radio in the car via Bluetooth.
The timespan from sale to reaching the consumer via programmatic is faster for both the media selling/buying process. By removing people, publishers and advertisers can begin the buying and selling process immediately upon inception by simply setting their requirements – everything else happens automatically, with ads served to consumers in mere minutes.
It’s an easy in, when it comes to programmatic audio. The barrier to entry is much lower for companies wanting to add media buying to their marketing offering and anyone can sign up with a DSP and start serving ads.
The data is real. Programmatic offers granular targeting data like music-based psychographic groups, weather and traffic patterns, purchase behavior and other environmental, population and consumer trends.
Image via D&AD
Also important to take into consideration is RAB’s latest research project, Audio Now, that grouped consumers into categories of “need-states” that their music choices satisfy:
- Help Me Escape
- Amplify the Moment
- Lift My Mood
- Broaden My Horizons
- Provide Social Currency
- Keep Me in the Loop
The varying moods and motivations that drive these need-states drive how listeners choose and consume audio types at any given point. Clearly, if you understand consumer/audience mood and reason for listening, you as an advertiser can best deliver more personalized, relevant messaging.
Since programmatic delivers advertisement at scale in real time, advertisers can target listeners in different locations listening to different stations, on multiple devices, etc., which can ultimately improve budget allocation and reduce wasted spend. Bonus!
Unlike traditional television where consumers pay astronomical fees for content and are still watching advertisements, free music for ads is seen as a better deal. This is likely because steaming services offer the ultimate in customizable listening. Choose and create your own stations; skip, like, dislike and favorite songs. All of these perks make listening to a few quick ads in-between songs, seem like fair trade and when consumers are more receptive to hearing ads, this creates a more positive association.
The proof is in the numbers:
- 80% of weekly AM/FM radio listeners are OK with ads
- 75% of weekly online radio listeners are OK with ads
Image via Spotify
By nature, audio is passive engagement. Whether listening in the car, on mobile, on desktop, etc., unlike video or display advertisement, all consumers have to do is simply listen. No glancing at a screen required.
It’s clear that there’s so much exploration yet be done on this highly effective, rapidly growing medium. We for one, can’t wait to see what’s next.
Have you explored your company’s options for reaching your target audience and lead generation with programmatic audio? Have questions? We’d love to hear from you!
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