Advertising’s next frontier: programmatic audio

Text: Rico Chan, managing director, Verizon Media Hong Kong, Japan and INSEA

In this always-connected, on-the-go age, one type of medium has—until very recently—eluded the grasp of advertisers: programmatic audio.

It’s no secret that an increasing number of people are using digital music streaming services, making digital audio, both as a medium and an advertising opportunity, a trend that is impossible to ignore.

Spotify is, without a doubt, the market leader. According to its April figures, the company now boasts more than 217 million active users, 100 million of which are premium subscribers. The company isn’t alone in this. Its competitor Apple Music has 50 million paid users worldwide while Pandora, a streaming service popular in the US, has 66 million active users worldwide.

If we turn to this part of the world, a Technavio report predicts APAC will be the fastest-growing region in the music streaming market, with an expected growth rate of 21% between 2016 and 2020. Zeroing in on specific markets in the region, digital audio listeners in China hit 661 million people in 2018, representing 82% of the country’s online population, says a report by Nielsen and Chinese radio Qingting FM. Meanwhile, Spotify picked up two million users in India since launching there in February this year. 

Music streaming isn’t the only audio format on the rise. These days, it seems there is a new podcast being launched every other week. According to a survey by Edison Research, the total number of people who have ever listened to a podcast passed 50 per cent for the first time. Similarly, audiences who stream their radio stations over the internet have doubled in size since 2012, growing from one-third to two-thirds of the population today. Time spent listening to online audio also reached a record high this year, with weekly listeners consuming an average of 17 hours of content each week.

All of which translates into huge opportunities for programmatic audio.

Podcast's golden era: a report found the total number of people who have ever listened to a podcast passed 50 per cent for the first time

How audio lets brands speak directly to audiences

The rise of programmatic audio is a long time coming. After all, programmatic has seen success in OTT and video. Audio, on the other hand, has yet to live up to its potential, in part due to the ambivalence of publishers, and the lack of technology and standards.

But just as a decline in traditional TV viewership led to the rise of digital services, and in turn the technology used to support programmatic TV advertising, the same can now be said for audio.

We are increasingly aware of this at Verizon Media. As we boost our inventory across top streaming audio platforms and publishers, we have also leveraged our programmatic expertise to personalise campaigns, and our proprietary fraud guarantee technology to eliminate malicious advertising.

While still in its nascent stage, we find out programmatic audio edges out other forms of advertising in several ways.

First, audio listeners are highly engaged. While ads can get lost amid the sea of marketing messages on many visual platforms, audio advertisers buy time that is theirs alone and do not need to compete with other advertisers.

Second, audio advertising allows brands to tell a story and express their personality more easily than through the written word. With up to 90% of people listening to audio through headphones, an intimate bond can be formed between brand and listener. Advertisers can make use of this opportunity to serve more personalised messages to their target audience. A Million Ads campaign found that listeners exposed to a personalised ad were 2.4 times more likely to convert than listeners who heard a generic ad.

Also noteworthy is the profile of digital audio listeners. According to the Nielsen and Qingting FM report, digital audio listeners in China tends to be relatively educated and affluent. A majority of them are also in their 20 to 29s. All of which make them the ideal demographic for many brands.

The ideal pitch

Obviously, not all ads are made equal, just like how not all marketing messages are suitable for the audio format.

It goes without saying that an advertiser should focus on engaging audiences, not turning them away. Like video ads, longer doesn’t mean it is better. Generally, audio ads lasting between 10 and 30 seconds with a clear call to action are seen as most effective. You wouldn’t want to irritate listeners with a three-minute ad that goes on and on about your product, especially if it is interspersed between their favourite songs.

Marketers should work out the ideal frequency of their slots by assessing their campaign goals. While the rule of thumb is three times a week, those who want to build brand awareness could consider a higher frequency. On the other hand, longer campaigns might prefer less regularity.

Last but not least—and this is really where the power of programmatic lies—multiple versions of the same ad should be created for different audience segments. Marketers should take advantage of the targeting options that programmatic provides, and it’d serve them well to personalise audio copies based on the listener’s gender, age, language and contents of their playlists.

A better narrative format, distraction-free and an affluent audience—programmatic audio offers a wealth of ad opportunities at a brand’s disposal. But audio’s savvy audiences also mean that advertisers would have to work extra hard to ensure that their ads engage and enrich, not annoy.

Rico Chan, managing director, Verizon Media Hong Kong, Japan and INSEA