When Jelli was launched just over a decade ago, its original intent was to provide radio stations an innovative music software platform. Little did CEO Mike Dougherty realize what was to come. Under his leadership, Jelli has developed a cloud platform that enables advertisers to buy and sell programmatic audio ads through a suite of demand-side and supply-side services.
The numbers look like this: In June, gross media spend for San Mateo, CA-based Jelli’s SpotPlan program for agencies and advertisers shot up 266% year over year, while the number of advertisers using its platforms nearly tripled. Today, the number of radio stations offering inventory programmatically via Jelli has reached 2,300—half of which are ranked top 10 in their market. Jelli says its partner platforms now reach more than 245+ million listeners, an audience larger than Google, Facebook, Twitter or Pandora in the U.S.
Among agency clients are Starcom, Mediavest-Spark, Dentsu Aegis Network, Horizon Media, Havas Media, IPG Mediabrands and Varick Media Management. Meanwhile, radio companies are making more inventory available for sale on supply side ad exchanges such as Expressway from Katz, which has eight of radio’s largest groups on board.
Dougherty speaks with Inside Radio about how audio streaming is making inroads—but not at the expense of radio; and how upstart Jelli has become the de facto standard for programmatic radio advertising in just over a decade, altering the way that broadcasters and agencies do business together. An edited transcript follows.
With the rise of streaming—and with consumers constantly on the go with their smartphones—radio is seizing opportunities to take advantage of streaming as a value add to over the air. What is your take?
I think the perspective is right. We all know radio is massive both in terms of reach and usage. Nielsen said there are 180 billion weekly minutes of use of AM/FM versus streaming, which is about 13 billion; that’s more than 10x in terms of usage. Consumers have more choices than ever before; it used to be all consumption was over the air radio, and now you see 10% or more is happening through smartphones. In some cases for some demographics, smartphones are the first place they go for streaming audio, and then you’ve got what’s coming next—which is the connected speaker market, the voice market, the market around the connected car. It’s definitely a time to see streaming as something that’s exciting—put into perspective that it’s still smaller than AM/FM radio, but growing.
Android and Apple are bringing streaming into vehicles in a familiar way for many consumers. Is this making it easier, perhaps more organic, for the audio audience—and thus radio stations, or is it more of a challenge for AM/FM?
This is an opportunity and challenge at the same time for radio stations. The trick is to remain on the dial when the dial changes its format. We are seeing the connected car with either Apple or Android as the primary platform you would use to engage with the car interactively. There are other choices now for audio services, so you have to make sure you are available to the consumer. In addition, when voice starts to become a bigger deal over the next couple years, that opens it even further. It’s going to be that much easier to start any service just by just saying, “Play Led Zeppelin.” So this is a pivotal time for AM/FM, which has always been the easiest way to consume audio in the car. As the car becomes smarter, there are other services that will become easier to use in the car and it’s at that point that radio really needs to earn that spot on the dashboard.
With the smart speaker revolution, we’ve got radio back in the home. What is going to happen when voice activation is available in the car?
I kind of look at podcasting, which is a form of digital audio, as a kissing cousin of radio. You can build an audience using your existing reach on AM/FM radio, build that close connection to that audience that really loves your morning show, loves your personalities and the programming you’re providing. That audience will want to access that content as it moves to a connected speaker like Alexa. They still want to hear that sports talk show about their favorite team or whatever the topic of the day is, so making sure you have available products in these new channels is so critical so that consumers can still access it as they move to a voice connected speaker.
So in this burgeoning world, we’ve got streaming, podcasting, mobile, on-demand and smart speakers. All of these do—or one day will—offer opportunities for radio to monetize, yes?
Radio broadcasters are the experts, bar none, at creating compelling audio content that’s formatted with professional care, that’s premium, it’s “brand safe” from an advertiser’s perspective, it’s addictive to some parts of the audience… so that is the skill… and that translates to any channel, whether it’s mobile, connected car or some sort of voice activated speaker. You just have to apply your skills in those channels, so there may be some new things to try out when you have an interactive voice skill, for example. The good thing about AM/FM is that it has the talent in the community to be able to come up with the most creative and the best formatted content.
So when we look at the Pandora’s and Spotify’s and Apple’s, are these platforms “scene stealers” for AM/FM? Is there room for all?
If the product is a music playlist service then they are competitive, however, we all know that radio is much bigger than just the music. It’s the connection around the music and the context of the DJs. These companies have built a music service—but they still need radio: They need partners in podcasting, they need other types of content to flow through the speaker because it isn’t available through a music playlist service. I think there’s a huge opportunity to partner with these new technology vendors that offer these platforms that we use to consume audio, because radio has the compelling content side.
You began with a music software system. How did you come to realize as you were developing your product… wait a minute, I’ve got an ad platform here.
We were on about 30 radio stations with a cool crowd-sourcing programming platform to allow the audience to choose what was played on the station in real time. When we showed the platform to one the largest ad agencies that buys radio in United States, OMD, they realized they could learn a lot about the audience by using it—and they asked if we could transform it to become an ad server for radio because the industry lacked that sort of innovation. We’re big believers in radio but it has antiquated technology. So using the technology we’d already built, we were able to deliver radio ads—and move into the age of digital, in real time, with reporting and data that is targeted to compete in this area of digital.
Tell us about the evolution you’ve seen at Jelli with programmatic advertising and where you expect to be by, say, 2020?
We were fortunate to have a few groups who leaned in and said we want to be first in using programmatic radio. We started with Entercom and CBS Radio and then in 2015, iHeartMedia became the leader pushing the industry forward. That has led to all the major radio groups installing the Jelli platform in all of their stations. We have 2,300 stations that can be bought using programmatic technology. What that means is an advertiser can log in and with a few clicks, buy reach that’s larger than any television network in the United States, and in fact than all the television networks combined. That allows this industry to compete at any scale. Those advertisers are starting to see radio as a medium that looks a lot like what they do in digital—with real time reporting, data targeting, and attribution, which is a new category that everyone is focused on, so that you can prove ROI. Radio is modernizing itself so it can stay competitive in this era of Google and Facebook.
With programmatic allowing radio to be bought as easy and as fast as you buy a Facebook or Google ad, have radio stations become accustomed to such a platform now? Is this status quo for broadcasters?
We have seen some skepticism about why we need to change, however, on the other side, you have an onslaught of digital technologies and budgets that are moving to digital advertising, so there’s a need to change. I think the current state of that debate is: This is just a new technology that I can learn to do my business better, just like every wave of new technology that’s come through a radio station or an agency—with new techniques and new software. So what we’re seeing is that the debate is moving forward… how can I use it better, how can I use it to my advantage and how can I get more out of programmatic than before?