While the adtech industry was out chasing eyeballs, ear drums perked up for digital content. Approximately 68 million people are streaming music subscribers worldwide. Audiobooks are exploding, with sales surpassing their print and ebook counterparts. Podcasts have become one of the hottest new trends in content. Streaming music giants such as Spotify and Pandora are continually evolving, improving and expanding their offering. Whether you’ve realized it yet or not, we’ve been living in an audio golden age.
Before programmatic audio ads ever surfaced as a real opportunity, the state of the market for audio advertising was mainly traditional buying on radio and in podcasts. You may have been listening to your local car dealership’s radio ad on repeat for the past few weeks or heard the latest This American Life podcast with the same pre-recorded, host-read ad from MailChimp or Blue Apron. Given that audio can go where video can’t due to its independence from sight and motion and compatibility with multi-tasking, it makes sense that online audio is being considered as the next big opportunity for programmatic advertising. According to a Forrester study, 28% of adults in the US and 17% of European adults stream music on their desktop or mobile phones. The majority of these users opt for a freemium or ad-supported model, meaning that hearing ads is not only inevitable, but also unopposed.
Although prominent players in the audio industry like Spotify and Pandora have already invested in transacting audio ads programmatically, most audio publishers are transacting either directly or in a private marketplace. The biggest challenge the audio advertising industry is facing today is that most audio publishers are unwilling to put their inventory in an open marketplace. Therefore, there’s a gap in the perception of audio inventory. On one hand, audio publishers view their inventory as premium, but conversely, advertisers are not prioritizing audio as much as video in their budgets. According to Statista, digital audio and radio inventory are only bought programmatically by 23% and 16% of media buyers respectively, indicating that for advertisers, programmatic audio advertising is still in its infancy stage. The adtech industry is impatiently awaiting audio demand partners to gain more interest to properly fuel the true potential of programmatic audio advertising.
With the ubiquity of audio, there is no denying that digital audio is an effective way to scale an advertising campaign. We’ve always wanted to reach engaged target audiences with personalized messages across devices with fully measurable outcomes and now we can. Buyers, it’s never been a better time to get in on the audio advertising game.
Lucy Xia, Product Marketing Manager