A few years ago, Google officially launched a programmatic audio advertising platform following a successful example of Spotify, whose incomes grew to 94% after audio ad format implementation. Even though programmatic audio inventory is still relatively new, it is experiencing stable growth and the obvious rise in popularity. Adoption of AdsWizz by Pandora, a newly-made programmatic audio collaboration of SoundCloud with iHeartRadio and Panoply with TuneIn are examples that prove this too.

As the IAB advertising report points out (last year and Q1 2020 revenue results), internet audio revenues have reached $2.7 billion which represents an almost 21.2% increase. Statista makes predictions for the future and predicts that by the end of 2024 audio ad spending will account for $8,594.

digital audio ad spending

Plus, audio on mobile devices is quickly outrunning desktop due to an abundance of convenient formats for mobile content consumption. Audio on the desktop has increased share only from 1.4% to 1.5% while the audio on mobile devices grew by 25.3% thanks to podcast proliferation as reported by IAB. A report from Statista reflects pretty similar results for the US - digital audio mobile is a new winner.

digital audio spending mobile and desktop

Thanks to the gadgets with a constant connection to the Internet, the penetration of the IoT into our life, and the global lockdown consumers are staying online 24/7.

Yet, their gaze doesn’t always rest on the screen. Surprisingly, but many people have brought the sport to their lives exactly during the COVID period. They started regular exercising, running, and maintaining a healthy lifestyle in general. 17% of people exercise more in 2020 than they did last year. The majority of us prefer to do sports with music or while listening to podcasts.

In such circumstances, communication in audio format holds great potential for those companies who among first shifted to the audio format. Furthermore, now, when the media consumption is surging across channels, there’s no doubt that publishers and advertisers will receive the additional big opportunity to access new audiences and monetize their apps with audio formats.

What is programmatic audio?

Programmatic audio is a digital advertising format designed for placement in audio content like podcasts, digital radio, and music-streaming services. Like the rest of the programmatic formats, it utilizes algorithmic buying technology in order to automate the process of ad selling and insertion.

With equal efficiency, a programmatic audio ad can appear on mobile, desktop, or in-app. The in-app ecosystem is favorable for the greatest variety of ad formats. For instance, rewarded audio is designed for mobile game monetization whereas simple audio or audio & banner will suit any other app type: podcast app, music streaming, news app, etc. 

Rewarded audio is very similar in action to rewarded video. When the mobile game is running, instead of the video the customer will hear an audio ad announcement. After the audio ad is completed, the user will receive the promised in-game incentive. In many cases, the interface features an option to pause the audio. Additionally, when players transition from in-game content to audio ads, their in-game experience isn’t affected, it doesn’t distract the user from a game which increases the loyalty of the audience to the format.  

How audio programmatic works?

Audio programmatic infrastructure wasn’t fully ready for programmatic until IAB developed Digital Audio Ad Serving Template. A few years ago IAB updated the VAST protocol in order to address the existing gaps in creative rendering, added the ‘audio-only’ attribute to the ad unit, and implemented the elements for managing audio ad scenarios. This protocol adoption was crucial for the seamless delivery of the programmatic audio ads since it established a common language for interaction between ad servers and SSPs. 

Apart from numerous important functionalities, the VAST protocol defines the procedure of placement for linear audio ads (appear before, after, or at the middle of audio content consumption). As a rule, they accompany the following formats: 

  • Companion ads. Static banners containing logo and CTA. Available for clicking upon while the audio format is in progress. 

companion audio ads

  • Ad pods. Ad placements for 1 or more audio tracks within one type of content. 

  • Skippable Ad. Pre-roll and mid-roll tracks in the audio file featuring different benefits.

  • Rewarded Audio. 15-60 sec-long in-game audio ad track that provides an in-game bonus to the user upon audio completion.

  • Podcast audio ads. The commercial audio ads placed within podcasts (on-demand internet radio talks).  

Principally, this means you can serve an ad unit within songs in the playlists, or as pre-roll or mid-rolls within podcasts, within radio ad breaks or in mobile games as rewarded audio.

Since the online environment features favorable conditions for interaction with the audience, brands use it to their advantage. Audio formats are now useful not only for the purposes of raising brand awareness but also for drawing attention to targeted actions.

Interactive elements of audio and visual advertising technology provide user engagement. The most popular are rewarded audios and companion ad units placed on the device screen at the time when audio recording is playing. 

What are companion ads and their benefits?

Take a look at static banner companion ads on Spotify. In the free version, they’re streamed to users with an interval of every 30 min. In some cases, companion ads stay on the screen after the audio unit ends in order to let the user interact with an ad later. The format doesn’t require user action to be triggered. It doesn’t interrupt music listening experience: once the advertisement is over the playlist redeems playing as it did before the ad.

What are podcast ads and their benefits? 

Edison's research has revealed that 42 million US citizens normally listen to podcasts on a weekly basis. Research company WARC predicts that podcast ads will make 4.5% of all audio ad spend by 2022. Podcasts (on-demand internet radio talks) are wrapped around a particular topic (food, entertainment, sports, fashion, lifestyle, etc.) which makes it easy for podcast advertisers to establish themselves as industry experts. That’s why this format is among the best when it comes to creating most human and intimate connections with your listeners. Podcast directories usually contain links using which brands can drive traffic to their websites

What is rewarded audios and their benefits?

This ad unit replicates the function of reward advertising offering extra lives, coins, daily rewards, closed content as incentives in exchange for listening to ad content. This format is not restricted by ad blockers. It is characterized by a 100% completion rate and publishers CPM that reaches $2 - $30 on average. Since the rewarded ad doesn’t distract users from the game and doesn’t affect in-game progress, it is considered less intrusive than an average visual ad. All of these factors translate into higher user retention and satisfaction.

Rewarded audio ads

Another great way to use an audio creative appears to be geofencing. This geolocation technology is syncing audio ad delivery to brick-and-mortar shops. It uses GPS settings on the cell phone to serve user's audio ads right on the spot in order to encourage shop visits. 

Mobile publishers can implement programmatic audio buying via SDK specifically adapted to render audio ad formats. Because such an SDK utilizes the Application Programming Interface (API), it can be connected to all kinds of SSP. The API will be responsible for drawing demand partners to the app who want to bid for certain audio slots in particular app categories. Then, API will be doing the rest of the work: pairing ads from server to mobile SDKs for further rendering.  

Programmatic audio 

Benefits for publishers

Benefits for advertisers

Audio format is not visible to ad blockers so publishers will not lose revenues on every restricted impression.

No competition for user attention due to format specifics. Audios are served one at a time. Unlike visual creatives, ad tracks aren’t placed next to each other. 

One of the highest levels of CPM -  around $2 - $30 

Ability to reach the user outdoors: during morning strolls, while driving.

For rewarded in-app audios: after listening, the user gets incentive which creates positive ad perception, increases engagement and loyalty.

Unlike other formats, audio doesn’t depend on size, screen, or picture resolution. The ad insertion can be server-side and client-side (on standard player technologies). The rendering is the same as for videos but without visual components included. 

Possibility to serve the ad to the users even if they are not looking at the screen at the moment. 

Smooth creative rendering. No glitches. Seamless user experience.

Affluent, tech-savvy, and good quality audiences (mostly millennials and gen Z).

Easily fitted for the mobile experience: the majority of audio streaming is happening via mobile devices. 

Audio programmatic formats are served in the cleanest low-risk environment guaranteed by server-side ad insertion and traffic quality filters.

Easy installation. The integration process can be as easy as HTML copy+paste installation for radio. Mobile publishers/developers need a mobile audio SDK, implementation of which is the same as of any other SDK.

Listening is less dependent on cookies and requires a people-based audio approach which is also very important in regard to GDPR. 

Non-intrusive (rewarded audio), non-irritating and doesn’t distract users from the game experience. This positively affects the user retention rate in apps.

 

Few challenges that linger

As most of the challenges have gone to the past, rendering of the audio content became possible according to both DAAST and VAST standards. Latest upgrades of IAB enabled programmatic platforms to transact the videos using a single framework. As a result, more audio inventory becomes available at open marketplaces. Still, there are some obstacles that will find their resolution as soon as technology hits mass adoption:

Insufficient demand and supply. Supply still outweighs demand, meaning that there may be remnants in programmatic audio inventory or the price may be lower than expected. In such circumstances, until the market grows enough, non-programmatic or programmatic direct deals for publishers will make more sense than RTB.

Technology incompatibility. It’s worth remembering, not all programmatic platforms are designed to support audio formats. Those that have such functionality should feature separate SDKs for audio formats or enable API connection. 

SmartyAds SDK for Audio Ads is already on track. Claim your solution today!

What’s the future like?

Today online audio advertising can do everything that traditional radio ads do. At the same time, due to placement in an interactive environment, online audio ads not only attract listeners but also immediately convert them into customers with a link in the banner that accompanies audio. 

In connection to this and the growing number of audio streaming services, the volume of audio inventory purchases will soon be comparable to traditional radio advertising turnover. It is also expected that the capacities of audio ads will be extended in the future thanks to the new platforms, voice assistants, and bots. If this happens, users will be able to interact with an audio ad unit using their own voice commands. 

How to make it work in your app?

Programmatic audio ads can be integrated into the app via SDK (IOS or Android) or API connection. SmartyAds practices the application of both featured solutions. 

API connection enables integration with several resources that are available on the side of another software application, SSP, or another server. API connection transfers data in real-time so that it’s always incredibly accurate.

The mechanics of audio rendering through audio SDK (IOS and Android) is determined by the code embedded into the mobile application. For example, the moment of ad initiation is stitched up to a certain event in the app. App developers can decide where they want to place an event that triggers a certain audio ad. With SmartyAds Audio SDK, developers can easily configure these events in accordance with the documentation. Each time an event is triggered, the system analyzes whether it is possible to serve an ad for the user. If the video matches the target audience, the ad is ready for playback.

Summing it up

SmartyAds works closely with mobile developers and technology partners such as AudioMob, to ensure that our rewarded and podcast audio ads arrive to the listener naturally, in a non-intrusive manner. With our solutions, publishers can tap into the world of increased revenue opportunities that raise the publisher’s CPM to $2 - $30 and higher. Advertisers, in their turn, can add audio to their overall campaign mix, implement premium programmatic strategies, and gain more views, sales, and conversions.

Explore audio programmatic with SmartyAds. Contact us to get started.

Written by
IRINA KOVALENKO, CMO OF SMARTYADS
August 2020