Despite the rapid development of other multimedia formats and technologies, audio content is still in demand, and its popularity is growing. Thus, according to research conducted in the USA in 2021, the average American spends 86.88 minutes daily listening to various audio content.
The advent of streaming services, digital radio, and a huge number of podcasts has opened up a new niche for advertisers, and programmatic audio advertising is intended to simplify and speed up buying and selling ads in large amounts. The audio ad market is still on the rise. Data obtained by Statista indicate that audio ad expenses are expected to grow by at least 6% annually, resulting in a total market volume of $12.82 billion by 2027.
Table of Contents
What is programmatic audio advertising?
Programmatic audio advertising is the technology of automatic buying, selling, inserting, and delivering ads in audio content. It works with various digital audio content: podcasts, audiobooks, voice searches, audio blogs, signature tunes, branded channels or playlists, internet radio, and music from streaming services. Like any other type of programmatic advertising, audio ads are promoted on unique platforms. Publishers sell their digital audio inventory, and advertisers bid for it; advertisers with the highest bid get the right to place their ads. All interaction is automatic and takes just a few seconds; thus, both sides of the process benefit from it.
The technical possibility of promoting targeted ads through streaming services, podcasts, digital radio, etc., has allowed advertisers to reach their target audience through new marketing channels. In a modern world, when people are oversaturated with display and video ads, digital audio plays an essential role in new brand development strategies.
The main advantage of audio advertising is the ability to communicate with clients when no other type of advertising works. For example, when a person is alone, listening to their favorite music on a music streaming service, listening to digital radio on a highway, or listening to a podcast while walking down the street and paying no attention to the world around them.
Another factor making audio ads so popular today is the incredible diversity of audio content. Music, podcasts, interviews, audiobooks, voice tweets, voice search, and other audio content – programmatic audio advertising allows access to a vast and diverse audience.
How do programmatic audio ads work?
The typical scheme of interaction between an ad server, a dynamic ad insertion server, and an audio player for adding ads to audio content and delivering it from an ad server to an audio player is shown in the following figure. It is universal and works the same for any kind of audio advertising, including digital radio, streaming, or podcast advertising:
The sequence consists of six steps:
- A user starts audio content in a player or an app.
- Content provider, working with VAST audio ad tags, initiates requests.
- A player makes an ad request for a dynamic ad insertion server.
- An audio ad server receives a process and responds to the player’s request for tracking and error details in the VAST response that the ad server sent.
- A player injects an ad and plays targeted creative to a listener.
- A player tracks an ad and notifies all the parties about the results specified in the VAST tag.
A universal XML-based template unifies the interaction with audio players sending ad requests and receiving responses from ad servers.
Sometimes an audio player uses simple code to play streaming audio without the ability to send and receive XML code. This is called a “thin client” (for example, a car radio) and works through a server. An application on a user’s device (native audio ad, for instance) may also be a thin client. In that case, an intermediate server inserts ads into the audio stream.
Until 2014 there was no unified standard defining digital audio advertising. Things changed when IAB released its Digital Audio Ad Serving Template (DAAST). Initially, the procedures for inserting, delivering, and playing audio ads were described in the DAAST template. Still, for the convenience of all parties, the existing audio ad specifications have been unified with the corresponding rules for video ads, which are described in the Video Ad Serving Template (VAST) standard. Although audio has noticeable differences from video, and data exchange processes, the procedures of inserting, delivering, and playing ads can be unified, so these two formats have been combined into a single specification – VAST. At the moment, the current version of the document is 4.3.
As for the targeting in audio, its options are the same as in other advertising channels, like video or mobile media. Advertisers can target campaigns based on demographics, geolocation, and device types. Targeting and tracking provided by programmatic audio ads for publishers made them an effective tool for monetization of streaming music, podcasts, audiobooks, and other audio content.
Where is it applied?
Naturally, audio ads are intended for different audio content. Here are the most popular types of content to which audio ads can be added:
Typically, this is a short audio insertion that listeners can hear at the beginning, in the middle, and by the end of an episode. At the same time, the format can be different, both native and dedicated sponsored content. In most cases, an advertising insertion in a podcast lasts 15-60 seconds. Podcast advertising works best when the product/service is close to the podcast’s topic.
Advertising in audiobooks is less common because people usually subscribe to the platform or pay for the book itself, but there are exceptions. For example, the Audible platform, which has included short advertising of its resources, promises up to 8 advertising insertions lasting up to 1 minute in 24-hour audio.
- Audio blogs
Advertising on audio blogs is almost the same as the ads on podcasts. This is a small audio file, up to 60 seconds long, which is inserted before the beginning, during the content playing, or after its completion. Like the ads in podcasts, these work best when targeted.
- Internet radio
These ads span such areas as sports, talk, and news, as well as numerous music genres. Internet radio also gives listeners a chance to stream or download audio. This type of advertisement has rapidly evolved and is now an effective medium to reach any target market. Radio ads feature distinct advantages over other methods of connecting with your audience and developing trust.
- Music streaming service
Streaming audio is intended for a wide range of listeners with a wide range of systems: phones, desktops, and smart devices. They are played on Spotify, Pandora, SoundCloud, and other platforms. Ads are inserted programmatically before or during a song, news, or podcast. Depending on the platform, audio ads can run with companion visual ads and videos, including calls to action.
Programmatic audio ad formats
Audio ads are represented in different formats, depending on the content they are added to, the broadcasting method, an ad delivery principle, and the goals advertisers want to achieve. There are the following programmatic audio advertising formats:
Benefits of programmatic audio advertising
Audio ad differs significantly from other types of ads and has several advantages over “traditional” types of advertising. Besides, it has a significant potential yet to be fully disclosed. So here are the main benefits of programmatic audio advertising for both publishers and advertisers, thanks to which its popularity has rapidly grown for the last few years.
Intimate brand-listener bond
Audio advertising works when no other type of advertising can achieve success. People listen to music whether they take the subway, exercising, driving, or just being alone at home. In any case, at this time, a person concentrates on sound, ignoring all other sources of information. At this point, thanks to personalized ad campaigns, a brand can create a unique connection with a listener. Targeting, provided by programmatic technology, is the key to success. Its effectiveness is confirmed by higher conversion rates achieved by audio advertising compared to other “classical” types of audio ads, like ads on the radio. Thus, according to research by Audacy, the use of audio advertising in combination with other types of advertising showed an increase in sales by 83%.
Audience targeting options are similar to targeting in other areas, such as video and mobile. Advertisers receive information about demographics, geolocation, and device used. They can use specific audio data from audio partners to target particular demographics, playlists, niches, and genres that match the theme or mood of the campaign. Thanks to this, reaching the relevant audience with the right messages at the right time became possible.
Programmatic audio advertising enables user-targeting by geolocation using IP-based targeting. Any device that goes online and on which a user listens to audio content has its IP, whether it’s a desktop computer, smartphone, car radio, or something else. This address is used to provide geographically specific advertising content.
With geo-fencing, your business can target listeners currently passing near your business (highlighted geographic area). A person must be within the range of your Wi-Fi, Bluetooth, or based on a GPS database. These technologies are supported in Apple iOS and Google Android.
Behavioral targeting is also possible in digital audio advertising. Streaming and podcast platforms, as well as other audio content publishers, collect information about the behavioral preferences of their audience, and based on this information, advertisers build their advertising strategies.
A publisher may collect data about user queries, for example, through audio searches, and use it for contextual targeting when people are recommended to advertise relevant goods and services in which users have previously been interested. Targeting increases the likelihood of conversion significantly.
Affluent, well-educated audience
Audio allows advertisers to reach and attract an affluent and well-educated audience. How do they do it?
- Affluent and well-educated people devote much of their time to learning and listening to many educational podcasts and other audio materials.
- They value their time and try to use it efficiently even when waiting, for example, listening to audio, traveling by plane, doing sports, or driving a car.
By correctly compiling a portrait of a brand’s target audience, an advertiser will get in touch with it through the appropriate audio content.
Audio advertising is another channel for brand interaction with a client. Given the intimacy of the listening experience, with the right approach to advertising content creation, a brand can create a unique emotional connection and gain access to the target audience when nothing else works, thus resulting in better Return on Ad Spend indicators.
Audio ads are distraction-free
The good news for publishers and advertisers is that programmatic audio ads are generally better received by users, as they are relevant, distraction-free, and do not cause as much irritation as traditional banners or video ads (video ads and banners are often perceived as “noise” and in most cases are ignored). On the contrary, people are focused on the audio content they hear and listen to audio ads more attentively.
At the same time, unlike ordinary untargeted advertising through radio, for example, programmatic audio advertising is targeted; besides, the topic of the audio ad typically corresponds to the audio content it is built in, which means it is more likely to lead to a conversion.
Besides, digital audio provides a broader reach because modern digital channels are more popular than traditional analog channels. In addition, many different types of digital audio advertising are available: companion ads, skippable ads, rewarded ads, ad pods, podcast ads, etc.
Audio advertising tends to have a conversational tone, making the ad content more personalized and specific to the interests of audience groups.
Resistance to AdBlock
Ad blocking is a global problem for both publishers and advertisers, but not in the case of audio advertising, which remains almost the last channel without the ad-blocking problem. Listeners agree to receive access to content along with targeted ads, and they are more tolerant to audio ads than to any other ad format.
The vast majority of ad blockers target visual ads. In contrast, existing solutions for streaming music, digital radio, podcast ads, and other audio content are still raw and refrain from interfering with publishers’ inventory monetization. Besides, developing ad blockers for audio content is complex due to the huge variety of formats and tools for playing them.
Besides, with existing formats, the user cannot simply skip the audio ad (except for the skippable ad and only at specified time intervals), which ensures the highest possible listen-through rate of programmatic audio ads and the best campaign results for any audio ad.
The main task of programmatic audio ads is to establish a relationship between listeners and the brand by affecting those parts of the brain and memory that other types of advertising do not have such an impact on.
All programmatic audio advertising is targeted, relevant, and, most importantly, corresponds to the audio content in which it is inserted, so users accept it as mismatching the main content, resulting in higher brand awareness. With programmatic audio ads, it is possible to implement any brand-building strategy.
Specific keywords or slogans heard during listening will have a strong effect, such as Nike’s catchphrase: “Just do it.” Such short forms of media with a solid emotional message have a significant impact on the audience and therefore become the preferred means of communication, and programmatic audio advertising helps to reach the target audience and have the desired effect on them.
Before the appearance of the single standard – DAAST (then substituted by VAST), there were no effective tools for targeting and tracking ad campaign results, which caused irrelevant ads on resources that have no connection with the brand nature; thus, the effect of such advertising could be the opposite – a brand is perceived in a negative light. But programmatic audio ads contributed to brand safety, ensuring only relevant content for the targeted audience.
Transcription targeting also contributes to brand safety. It is based on recognizing and analyzing audio content and identifying pieces on various topics, allowing for more precise targeting. For example, in a podcast about a healthy lifestyle, you can highlight a section about healthy eating, which is great for food manufacturers to determine exactly where to insert their ads. Besides, it helps to identify new target groups. For example, a fitness trainer’s video has a fragment dedicated to food. In any case, transcription targeting allows you to target audiences for your brand more effectively.
Modern programmatic platforms allow to collect and analyze a lot of data, which can be used to optimize the effectiveness of any campaign. In addition, these platforms also help to understand how programmatic advertising impacts a customer’s journey and conversions and makes the advertising follow through. With programmatic audio advertising, you are in complete control of the process.
One of the best features of programmatic audio advertising is its price. With high efficiency and audience tolerance, audio advertising offers low CPM rates, which are lower than other digital media channels. Audio ads are very cost-effective. Thus, in terms of the “price-quality” ratio, it is an excellent option. At the same time, the existing technologies allow tracking the campaign results and evaluating the ROI.
The future of programmatic audio
Several trends are causing the rapid growth of the programmatic audio ad industry: the growing popularity of music-streaming services, namely streaming, podcast services, and other digital audio platforms, as well as the ongoing trend of moving to mobile platforms.
The rise of streaming services began in the late 2000s and has gradually become the largest source of income from digital music. On such streaming platforms, on the one hand, users get access to more content than ever before, and on the other hand, small artists who do not have big promotional budgets get real access to listeners.
But streaming services like Spotify offer value to users (customer first concept) and performers and advertisers. For example, the platform provides a range of tools to help advertisers make the most of their reach and target marketing campaigns with Spotify Advertising. They offer advertisers a wide range of ways to buy ads: Ad Studio, Demand Side Platforms (DSP) programmatic, private marketplaces, or guaranteed programmatic purchases.
In addition, there is an opportunity to configure various parameters for the most accurate targeting: age, gender, geography, platform used, time of day, language, playlist, and preferred genres. There are also tools for tracking results. All this makes advertising on such platforms very effective.
The trend of shifting traffic from desktop to mobile devices continues, and now most people with smartphones, digital car audio systems, digital radio, or other audio are recipients of programmatic audio advertising in one way or another. Considering the total amount of time the average adult statistically spends listening to audio content, this opens up a massive opportunity for advertisers. 75.8% of U.S. digital audio listening is on mobile devices. Mobile technology will be the main engine of progress in this sector, and platforms such as Spotify, SoundCloud, Tune In, Pandora, and Google are already implementing programmatic audio.
In a world oversaturated with video ads, people take a break with audio content: music, podcasts, audiobooks, etc. The shift to mobile device traffic accelerates this trend. Audio ads offer a massive opportunity for marketers and advertisers because of their resistance to ad blockers, tracking capabilities, and more tolerant user behavior towards such creatives. Thanks to targeting in programmatic audio advertising, advertisers can fine-tune their ads to their target audience segment as accurately as possible. Besides, the cost of audio advertising of the same length is significantly lower than that of video ads. All this contributes to the rapid growth of the digital audio advertising segment, which will continue.
After implementing the DAAST and VAST standards and introducing technical means for targeting and tracking the results of campaigns, audio advertising entered a qualitatively new phase of its development.
Due to its features, advertising audio content can create a closeness and intimate connection between a brand and a listener that no other type of advertising does. In addition, listeners are much more loyal to audio advertising than video clips. Audio advertising has ad blocker resistance and is very cost-effective.
Safety, efficiency, availability, reach, and a special connection with listeners – these and other advantages create excellent prospects for further development. The limitation of offers from publishers is the only factor holding back this development. Still, the situation is changing and will continue changing for the better soon.
Where can programmatic audio ads be placed?
Audio advertising software works with various audio formats: streaming audio, podcasts, digital radio, audio blogs, digital information search, etc.
What metrics do you focus on tracking for reporting on your audio campaigns?
Impressions (number of ads shown), reach (Number of people who listened to ads), frequency (number of times a person heard ads), and audio completion rate (percentage of ads were listened to in total) are among the most important metrics to focus on for an advertiser.
What are the typical CPM costs for audio ads?
According to the data obtained from AdsWizz, TTD, Triton Digital, Xandr, and Google Display & Video 360, the average CPM rate for a 30-second ad starts from $7 per 1000 impressions.
Which music streaming services are available to target?
Spotify, Apple Music, Amazon Music, Qobuz, and Tidal are among the most popular streaming services available to target.
What is the main difference between streaming audio and CTV ads?
From an advertising perspective, the audio channel works where television advertising is perceived as “noise.” In addition, audio advertising is immune to blockers and cheaper. It can create a unique, intimate connection between the listener and the brand.
What are the specifications for audio ads?
Here are typical specifications for an audio ad (may differ, depending on the platform)
- Length: 15 – 60 seconds in most cases.
- Maximum file size: up to 1MB
- Sound quality: up to 256kbps AAC (high-quality setting)
- Format: WAV, MP3, OGG, and others
- Programmatic tag type: VAST 4.1 and higher
What Types of Audio Content are Suitable for Programmatic Audio Advertising?
Podcasts, streaming music, internet radio, and audio content for in-car audio systems are suitable for programmatic audio advertising.
What are some excellent audio ad examples?
- NGO Lifeline audio clip in which the sound of bells ringing becomes the sound of an incoming emergency call, highlighting the rapid increase in calls to Lifeline Crisis Help Desk.
- A clinic in Kansas was creative in advertising its service, colonoscopy. Society isn’t used to talking about it, but the effect is impressive with a good script, voice acting, and a twist.
- Minnesota Alliance Gambling Alliance audio clip. The primary purpose of this advertisement is to draw attention to the gambling issue. Here, the combination of sounds in the hall with bingo machines and the even measured voice of the narration with an appeal to the players produces the desired effect.
What is Podcast Advertising?
Podcast ads are small audio insertions, typically up to 1 minute long, that run before, during, and after a podcast. You can achieve high-performance indicators thanks to targeting options and relevant content selection that matches the ad.
Which Companies Are Offering Programmatic Audio Ads?
These are several examples of companies offering programmatic audio ads:
- Adtelligent Ad Exchange
How much does it cost to build a programmatic audio ad platform?
Building an ad platform depends on using SaaS programmatic vendors like Adtelligent or creating your own code from scratch.
In case you don’t have developers, it is better to cooperate with SaaS vendors. Pricing usually depends on the desirable audience because most companies charge by the amount of generated Ad Requests or Impressions. Usually, it starts from $1,000 for self-serve ad platforms.