“Audio is a great advertising tool because it is an additional channel where advertisers can inform people about their brand. What is also useful is that audio is very nuanced and we can take it in multiple directions when advertising, whether that be by personally working out deals with companies like Spotify and Pandora, or utilizing it programmatically.” - Joe Fairchild, Sr. Campaign Analyst, Pathlabs

Curious about programmatic audio? Let's explore what it is, how it is used, and how you can start taking advantage of it.

What is Programmatic Audio?

Programmatic audio advertising is the automated selling and placement of audio ads into content such as podcasts, digital radio, and music streaming services. As a result, advertisers have access to better targeting, measurement, and retargeting to execute campaigns efficiently.

Over the last few decades, humans have developed a daily routine of digital audio consumption. We have our playlists for road trips and working out, we listen to podcasts on our way to work, and some tune into digital radio apps to hear our daily horoscope. It seems we are always listening to something. Pew Research found that 72% of Americans ages 12 and older listened to online audio on a monthly basis.

Due to this massive amount of daily audio consumption, marketers are delegating more of their budgets to advertise within this audio content as a part of their media strategy.  In fact, we can expect digital audio ad spending to hit $6.76 billion by 2023 and $7.89 billion by 2025. The most common technique for placing these audio ads is called programmatic audio. 

The nuances of programmatic audio are quite complex. Programmatic audio is automated selling and insertion of ads into audio content like podcasts, digital radio, and music streaming platforms. Due to the nature of programmatic advertising, marketers have access to better targeting, measurement, and retargeting tools to execute campaigns with great effectiveness.

What sets programmatic audio apart from normal audio advertising? Programmatic audio uses automated ad buying and selling software with in-depth analytics and tracking systems to manage audio campaigns. In turn, ads reach more target customers in a cost-effective and more scalable way.

By placing audio ads programmatically, many businesses are seeing success in promoting their products and services to new eyes, or in this case, ears. Programmatic audio is a great choice for many logistical, budgetary, and innovative reasons. In this article, we’ll go through all you need to know to get started. 

How Does Programmatic Audio Advertising Work?

Programmatic audio advertising comes in many forms. Most often, ads are placed with media planning tools, or placed directly through podcast-specific platforms. Some audio platforms, like Spotify, have an ad studio built-in. This makes things simple. Just create an account, set campaign objectives, plug in your creatives, and run the ad. 

For advertisers wanting to guarantee conversions, they can strategize by using ad buying platforms that utilize algorithms and machine learning.

These platforms are used to schedule advertisements, determine the best spots to place ads, and decide which portion of the audio content should be placed (e.g. beginning, middle, or end). Many platforms use AI to suggest new target audiences based on historic audio consumption behavior and demographics. 

By using these platforms, the advertiser’s responsibility is to create the audio content, while the software does the heavy lifting to optimize return on ad spend. Additionally, these platforms generate a plethora of data to draw insights from and improve ad campaigns.  

Advantages of Programmatic Audio Advertising

Now that you know the basics of programmatic advertising, let’s talk about the advantages of investing in this ad channel. 

Audio Streaming Services Are Growing in Popularity

Podcast and music streaming services have had unprecedented growth over the last few years. Data shows that 62% of consumers listen to podcasts and 160 plus million Americans have listened to a podcast. With booming platforms like Spotify, Apple Music, NPR, and much more, now is the time for agencies to take advantage of programmatic audio ads. 

Audio Ads Are Emotionally Engaging

Podcasts, digital radio, and even audio articles have a way of impacting us deeply. We can feel moved, curious, excited, sad, and even motivated after listening to our favorite episodes. We may also feel a special connection to the podcast host or feel part of an exclusive conversation between two people.  Given this element, pairing ads with these impactful podcasts or audio clips will result in increased recall and associated positivity with a brand. 

Audio Listeners Are a Valuable Audience

Audio content, like podcasts or the radio, is constantly telling stories that require an increased amount of attention on behalf of the listener. This means that they will be more focused while listening to audio ads. This will in turn can influence them to elaborate more on the ad message and increase their chance of considering a product or service. 

What is also great about audio listeners is that they are on the audio platform because they want to be. They want to listen to music or a podcast and it was their choice to press play. Due to this, they will be less agitated by ads because it is just part of the audio experience. 

Forbes confirms that 78% of consumers don’t mind hearing podcast ads and 62% of audio consumers would consider buying a product after hearing an ad. These ads leave much better impressions than banner ads and pop-ups that consumers are forced to interact with while scrolling the web.

Programmatic Audio Offers Unique Targeting Options

There are a plethora of options for where audio ads can be fielded. It seems that there is a podcast for almost anything these days which means that marketing teams just have to find the audio content that corresponds to what they are trying to market and insert their ad. 

It is important to note that programmatic audio takes ads a step further and reaches multiple audiences that brands and agencies wouldn’t normally interact with. For example, if we were to field an ad on a true-crime podcast, which is very mainstream currently, this ad will be heard by multiple demographics that would most likely never have interacted with our ads if we were to execute a more traditional advertising method. 

Audio Ads Are Distraction Free

Advertisers are always competing to put their creative content in front of customers. This can result in poor ad campaign performance. With digital audio ads, they don’t have to compete as much. The audio ad will be physically part of the podcast and front and center with the listeners’ undivided attention. 

Audio ads make it more difficult for the listener to skip the ad. The only way to skip is to manually fast-forward the audio. Given that most podcasts, music, and digital radio are listened to while multitasking, skipping isn’t as easy and the consumers will most likely just listen to the ad. 

Cheaper and Easier

Audio ad creation can be executed very easily. Since the audience will only hear the ad, marketers just have to write the script, record it, and add any background elements. It can be done while sitting on the couch and recording on a smartphone. For programmatic ad placement, DSPs are efficient and effective with automated ad spend and placement.

Challenges of Programmatic Audio Advertising

Just because programmatic audio advertisements are an attractive option for marketing efforts, it is not to say there aren’t challenges.

Not Hitting the Right Audience 

If a marketer has a very broad target market or inadequate customer identifiers, the programmatic software may not perform correctly. 

Lacking the Right Equipment, Experience, and Budget

When entering this ad market, marketers may not have much experience with creating audio ads or using programmatic audio platforms. This can put them at a disadvantage. Also, if they have a low budget, the return may not justify the cost of the programmatic software. 

Struggling to Access Prime Spots for Ads 

Audio ads can be very effective if they reach large audiences or are promoted by popular podcasts, artists, etc. However, like tv ads or social media, it is tough to get advertisements in the top and most seen spaces, especially with a small budget. 

Short Ad Lifespan 

Nobody is going to want to hear an ad over and over again. So, marketers have to be succinct and effective when creating audio ads and make them memorable. There are limited chances to make a good impression. 

Reliant On Only Audio

Audio ads only work for certain offerings. If you try to advertise something visual like art or clothing, programmatic audio advertising may not be the way to go.

Getting Started with Programmatic Audio Ads

When marketing teams, brands, and agencies are ready to dive into programmatic audio, we encourage them to follow the steps below to get started. For more help thinking about this planning process, and how it fits into the big marketing picture, check out this article on how to develop a media plan. 

• Identify your product and target audience. 

• Consider if programmatic audio is the best fit for the campaign goals.

• Research audio platforms.

• Create the audio content. 

• Plug content, along with key KPIs, budget, and target audience, to the programmatic software to field the ads. Or outsource these tasks to a media execution partner.

• Review the campaign performance and work with the software to improve it.

Curious about the benefits of working with a media execution partner? Get in touch with Pathlabs to see how we can become an extension of your team.

Contributors: Jacob Treece, Elias Snyders, Joe Fairchild, Mario Schulzke