This post has been updated in March 2024.
Before delving into the workings of audio ads in online marketing, let’s examine some compelling statistics. Marketers have grown interested in understanding how programmatic and online ads function. According to a report by eMarketer, the programmatic advertising market in the digital display space in the United States has experienced notable growth, increasing 11.5% to more than $135 billion in 2023. Spending in this segment is projected to approach 180 billion dollars by 2025.
But there is another form of online advertising on the rise: digital audio ads. These ads are making a significant impact, resonating emotionally with listeners increasingly turning to online platforms for entertainment. As people stream music and podcasts in their daily lives, audio ads capitalize on the memorable nature of music to create strong emotional connections with consumers.
Some of the other most common programmatic ads include:
- Video ads
- Online display ads
- Advanced TV ads
- Social media ads
- Outdoor TV ads
- Search ads
In marketing, programmatic ads tend to provide in-depth targeting to relevant audiences. Therefore, programmatic ads are increasing the efficiency of online advertising. Marketers are finding such advertisements to be a worthwhile investment due to the extensive coverage they receive online.
Before we embark on learning how audio ads work, we need first to understand, “what are audio ads?”
Let’s dive right in.
What are audio ads?
Audio ads, or programmatic audio ads, are an automated process of buying and selling ad space. This process works through computerized systems that connect advertisers to publishers in various audio content mediums. Examples of these mediums include digital radio, podcasts, and music streaming services. Traditionally, this process involved human negotiations, known as Request for Proposal (RFP).
Automating the process of buying, selling, and placement offers benefits to both advertisers and marketers. Automation achieves this by providing audiences with personalized and customized messages based on real-time data.
Thus, with audio ads, you’ll get targeted data on:
- consumer trends
- weather and traffic patterns
- music-based psychographic groups
- population purchase behaviors.
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How do Audio Ads Work?
Programmatic audio ads utilize AI technologies and real-time bidding to gather data and analyze the audience’s behavior online. This data allows for real-time campaign optimization tailored to their tastes and preferences.
Interested in leveraging programmatic audio ads? Here’s what you’ll need to use: SSPs, DSPs, and DMPs.
Data management platforms (DMPs) collect and analyze cookie data, enabling marketers to make relevant, informed decisions about their target audience.
Meanwhile, demand-side platforms (DSPs) facilitate the buying of ad inventory process on the open market, providing an opportunity to reach your targeted audience when integrated with DMPs.
Publishers can manage their unsold ad inventory using supply-side platforms (SSPs). These platforms provide attention data by indicating the duration spent by a visitor on a specific site and the number of pages viewed per visit.
SSPs are responsible for picking the winning bid and serving the winning banner ad on the chosen publisher’s site.
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The Change of Programmatic Ads from Display Ads to Audio Ads
Despite the success of display ads in videos over the years, programmatic audio was missing delivery standards. It needed some solid specs to attract more marketers to pump advertisersˊ dollars into the audio ads system. Hence in 2014, the Interactive Advertising Bureau (IAB) promoted the Digital Audio Ad Serving Template (DAAST) as a template for delivering audio ads.
Then in November 2018, IAB merged their DAAST template with its VAST (Video Ad Serving Template), a standard for video ad buys, to form VAST 4.1. The most notable changes in VAST 4.1 include the addition of “ad Type” attribute to the “Ad “element. It allowed a chosen ad to be an audio-only type. Moreover, the template is using a media player instead of a video player in the document.
The quick adoption of the VAST 4.1 framework in the future will be beneficial from a business perspective. Not only will VAST 4.1 increases the popularity of audio ads in the market, but it will also help publishers to communicate with ad servers in a common language for ad delivery.
Consequently, VAST is envisioning a framework for linear ad placement either before, after, or during a main audio content break in audio players.
Ad formats complementing VAST include Ad pods, skippable ads, and companion ads.
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What are the Various Media Formats for Digital Audio Advertising?
- Internet radio
- Audio blog posts
- In-stream music
- Google home action / Alexa skills
- Podcasts
- Flash briefings for Amazon Alexa
Podcasts, in-stream music and internet radio are the most popular forms of media formats in the US market. These formats cut across all the population demographics: from young to old.
The success of podcasts led to the creation of audio blog posts. Such innovations have been fundamental in enhancing the reader’s experience, especially, but not exclusively, for the blind demographic.
Factors influencing the slow uptake of Audio Ads compared to Display Ads
The uptake of audio ads has been slow in all the years programmatic advertising has been in effect. The lack of proper technology, coupled with limited interest from marketers and publishers, has continually impeded the use of programmatic audios in online media.
Moreover, research intelligence firms and advertising trade bodies are finding it challenging to publish estimates of programmatic audio. Marketers are attributing this problem to the small share programmatic audio ads receive to the overall online advertising.
Why is the use of Programmatic Audio Ads Increasing?
The continuous astronomical growth in the volume of online streaming audio content is picking up eyebrows from marketers. The increase is already piquing the interest of major industry players across the spoken word and music content markets.
Nowadays, people can listen in whenever they want and wherever they are, throughout their lifetime. In addition to streaming audio on mobile phones, people are adopting smart speakers in their homes. Vehicle owners are also joining the craze. They are making new integrations in their cars to enhance their streaming experience.
In response to the growing audio streaming markets, some of the industry’s biggest names are incorporating audio ads into their marketing. They propped up audio ads as a prime platform for scaling their reach to targeted audiences in 2018. For example:
- Google introduced a Demand-Side Platform (DSP) whereby marketers could buy programmatic audio ads through accessing the inventory of some audio streaming services.
- In July, Spotify reported that 20% of its total ad revenues came from its self-service programmatic platform.
- Pandora also made its programmatic inventory available to all buyers in July 2018.
- Other audio streaming services like Panoply, TuneIn, and iHeartRadio have joined in selling their inventory programmatically.
Conclusion: The Future of Audio Ads
Programmatic audio ads are expected to grow in numbers over the next coming decade. This growth will be due to more listeners are ditching the rigid traditional forms of media for the more appealing streaming platforms online, and the emergence of new ways of consuming audio content, like AI-powered technologies.
These new digital media tend to provide the listener with an immersive digital audio advertising experience. Furthermore, online media offers listeners with the flexibility to choose the right kind of content on the go. The audience also finds new-age streaming quite convenient because of the vast options provided online. They can alternate between podcasts and music whenever they want unlike in the case of traditional radio having a set program line up.
All in all, marketers, publishers, and advertisers have a chance to utilize these digital trends in their marketing strategies. Users will reap the full benefits of connecting with their target audience on a personalized level.
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