Programmatic Audio Ads: A Quick Guide
Programmatic audio ads have emerged as a viable advertisement medium for digital marketers and a novel revenue stream for online publishers. Just look at the statistics. Spending for digital audio ads reached $10.15 billion in 2023. Global programmatic ad spend, meanwhile, was at $558 billion in the same year. That number is expected to surpass $700 billion by 2026.
But what are programmatic audio ads?
This quick guide will explain what they are and how they work while helping publishers like you decide where they fit into your business.
What Are Programmatic Audio Ads?
Programmatic audio advertising is a digital advertising format for audio content. It enables the insertion of ads into digital radio (via digital radio ads), music streaming services like Apple Music, and more without impacting the listening experience.
In addition to the above-mentioned formats, advertisers can include programmatic audio ads in:
- audiobooks
- audio blogs
- branded channels
- playlists
- online video games
- voice searches
Like programmatic display ads, digital audio ads trace their roots back to programmatic advertising, a technology that utilizes algorithms to automate the buying and selling of ad space online. Programmatic platforms make these transactions possible.
Publishers like you can sell digital audio advertising inventory to advertisers who bid for the right to insert their ads into your content. The arrangement lets these advertisers reach target audiences that prefer consuming content in audio format. For example, if you run a podcast, advertisers can leverage programmatic audio ads to market to your podcast listeners.
It goes without saying that you’ll need to entice advertisers to consider you in the first place. For this, you need to show them that you have a following. So, create content that attracts the right listeners. Leverage technology to understand your audience. Google Analytics 4, for instance, makes collecting and analyzing site audience insights a breeze. If you have a separate social media account to promote your publisher content, you can also check your chosen social platform’s in-built analytics feature.
Understanding the Inner Workings of Programmatic Audio Ads
There are several programmatic advertising types for digital audio content. The common ones are:
- Companion Ads: This programmatic audio advertising method shares similarities with display ads in that it inserts clickable static banners into content. Companion ads are typically used on music-streaming services like Spotify.
Source: Spotify
At set intervals, the ad is automatically displayed while the user is streaming music on their mobile device or other music-streaming device type. Some companion ads linger after a song ends to increase the chances of digital audiences interacting with them.
- Podcast Ads: As the name suggests, podcast advertising involves inserting an ad into a podcast. The ad gets served pre-roll, in the middle of a podcast roll, or within ad breaks.
According to Statista, the number of US podcast listeners is expected to reach 254.35 million by 2027, meaning these types of ads grow in popularity.
- Skippable Ad: Like podcast ads, skippable ads air pre-roll or mid-roll. However, they give the listener the option to skip them. Thus, audio ad campaigns in this form need to grab attention within the first three seconds to be an effective medium. Skippable ads can be used alongside rewarded ads to increase additional advertising opportunities.
- Rewarded Ad: This audio format usually appears within online games. While more often referred to as video ads, rewarded have an audio content in them. Advertisers can deploy their advertising campaigns as in-game bonuses that reward the user for listening to the 15-second or minute-long ad.
Rewards take the form of coins, additional lives, and so on. Why use them? According to the research, 76% of US mobile gamers prefer rewarded ads over interstitial ads.
All of the above types of programmatic audio ads share the same characteristic: they’re designed to help advertisers meet their advertising campaign objectives without being distracting. Depending on the type of content you publish, advertisers may use one or more of the above when marketing to your audience programmatically.
4 Benefits of Programmatic Audio Ads for Advertisers
Programmatic audio ads provide the following benefits to advertisers:
- Targeted Audience Reach: Audio ad programmatic provides precise audience targeting. Media buyers are no longer limited to targeting audio content by genre. Now they can target audiences based on demographics (including their geographical location), psychographics, devices, and even operating systems. This precision helps to aid campaign conversion rates while keeping ad budget waste to a minimum.
- Data-Driven Insights: Audio ads provide data-driven insights that can inform advertisers’ marketing efforts. Marketers can rely on key performance indicators like click-through rate, impressions, and more to understand how their ads perform and who they’re reaching.
- Real-Time Optimization: As with all things in digital advertising, programmatic ads for audio-based content provide advertisers with insights into their campaign performance. Not only can they keep track of this performance, but they can also make adjustments in real time. This benefit means that they can increase their chances of getting a decent return on investment.
- Free From Distraction: Ads inserted into podcasts and other eardrum-oriented content are considered to be distraction-free. The reason behind this belief is that listeners consume the content in distraction-free environments that enable focus and attention.
An understanding of the above benefits should help you make an informed decision about whether to sell ad space on your website, blog, podcast, or other digital asset.
6 Benefits of Programmatic Audio Ads for Publishers
As a publisher, you stand to benefit from programmatic audio ads in the following ways:
- Targeting the Correct Audience: Programmatic audio ads utilize powerful algorithms that pair ads with the users who find them relevant. This capability ensures the ads perform well for advertisers. When advertisers are happy with their campaigns, they’re motivated to spend more on your platform.
- Cost-Efficiency: Programmatic advertising is cost-efficient for publishers. Thanks to an automated buying and selling process, you don’t have to engage in manual negotiations. The result is that you can save money you’d otherwise spend on operational costs and utilize available resources more efficiently.
- Optimization in Real Time: Programmatic ads provide plenty of data and analytics that let publishers optimize their ad inventory in real time. Thus, it’s easier to maximize revenue and influence the performance of ads.
- Flexibility and Control: Programmatic ads offer you more flexibility and control. As a publisher, you can manage your relationships with advertisers, control your ad inventory by blocking ad categories, and so on. You can also choose between advertising mediums (like Programmatic Direct and RTB).
- Access to Innovative Ad Formats: Programmatic ads can come in different forms, as we’ve seen above. The variety provides more opportunities to drive revenue while increasing engagement amongst your content’s audience.
- Enhanced User Experience: Programmatic ads can contribute to your website or application’s user experience. By being targeted and relevant, these ads can increase your users’ satisfaction and promote brand loyalty.
In summary, programmatic audio ads can help publishers drive revenue by positioning advertisers’ ad campaigns for success.
2 Key Challenges of Programmatic Audio Ads for Advertisers
Programmatic audio ads pose two key challenges for advertisers who want to take advantage of them. These challenges are:
- Discrepancies in Demand and Supply: Unfortunately, the supply of programmatic ad platforms still outstrips demand for this marketing medium.
- Technological Incompatibilities: Programmatic platforms don’t universally support all audio formats, which means instances of technological incompatibility aren’t uncommon.
Awareness of the above challenges can help you manage your expectations as a publisher.
3 Key Challenges of Programmatic Audio Ads for Publishers
Publishers who are keen on taking advantage of programmatic audio ads as a revenue stream face the following challenges:
- Monopoly of Digital Content Distribution: The current internet landscape is such that a handful of platforms control the main channels for digital content distribution. This monopoly means that publishers are at these gatekeepers’ mercy when trying to get more ears and eyes on their content.
Additionally, because these monopolistic entities call the shots, they can dictate unfair revenue-sharing arrangements that impact publisher revenue.
- Limited Access to Consumer Data: Due to privacy regulations like the EU’s General Data Protection Regulation (GDPR), publishers don’t have as much access to consumer data as they used to.
For example, the GDPR’s Recital 30 identifies the data collected by browser cookies as personal data, limiting their unfettered use. These regulations mean that users can withhold their consent, denying publishers the data needed to attract advertisers to their platforms.
Also, independent publishers aren’t privy to the large amounts of user data the platforms that control the main channels for digital content distribution collect for their content-recommendation algorithms. The lack of consumer insights puts publishers at a disadvantage when planning their content and marketing strategies.
- Advertiser Reliance on Contextual Targeting: Advertisers are increasingly relying on contextual targeting in response to data-protection regulations. As a result, they’re allocating less of their marketing budgets to paid advertising that relies on user data and behavior. This may mean a decrease in ad revenue for publishers.
Awareness of the above challenges is crucial if ad revenue is the main driver of revenue for your publishing business.
Effective Strategies for Programmatic Audio Ads
Here are 6 effective strategies advertisers follow when rolling out programmatic audio ad campaigns:
- Knowing the Audience: Advertisers must know the audiences they’re trying to reach before rolling out audio ad campaigns. This knowledge determines everything from the platforms targeted and ad networks used to the ad’s tone and messaging.
Programmatic platforms provide data on audience demographics, listening habits, musical tastes, owned devices, and so on. Advertisers who tap into this information will have an easier time creating user profiles and tailoring their ad messages.
You can help advertisers with this strategy by providing ample information about your audience’s demographics when using a programmatic platform.
- Choosing Appropriate Ad Formats: There are several ad formats advertisers can choose from when creating audio ads, including pre-roll and mid-roll formats. Their campaign objectives (creating awareness, generating leads, etc.) and audience data can help them determine the right format to use.
For example, pre-roll ads would work better for audiences with a higher likelihood of skipping advertisements.
- Creating High-Quality Audio Ads: Audio advertising doesn’t provide advertisers with the luxury of using amazing visuals to wow the audiences. Therefore, it’s imperative that they aim to create captivating audio ads that seize the listener’s attention out of the gate.
- Keeping the Ad Short: Even though programmatic audio adverts aim not to disrupt a listener’s experience, they can still be viewed as interruptions. Therefore, advertisers should keep audio ads short and to the point. Also, if the ad runs for up to a minute, it needs to be entertaining, informative, or both and capture attention within the first six seconds.
- Including a Call to Action: The whole point of advertising is to get an audience to take a specific action, whether that’s making a phone call or purchasing a product. Thus, audio ads aren’t complete without a compelling call to action. Advertisers should keep the CTA concise and simple to avoid confusing listeners with too much information.
- Tracking Performance and Making Adjustments: Learning from existing audio ad campaigns will provide valuable audience insights that will prove useful in future ones. Thus, for advertisers, it pays to track campaign performance and take note of the impact adjustments have on performance (for better or worse).
When implemented right, the above six strategies can increase the chances of programmatic audio ad campaign success.
In Closing
The best way to think of programmatic audio ads is as advertisements for audio content. As a publisher of online content that incorporates audio, you can expect advertisers to use companion ads, podcast ads, rewarded ads, and others to market to your audience.
While this form of advertising opens up additional revenue streams for your online publishing business, there are challenges to be aware of.
In particular, the three key challenges you’ll face as a publisher are market monopoly, limited access to consumer data, and a shift by advertisers towards contextual targeting. That said, in the future, the benefits this advertising medium provides to advertisers and the projected increase of this ad format should make it more lucrative for publishers.
