If you’re not doing audio advertising, you’re missing the boat. That was the message that several audio industry executives delivered at Advertising Week in New York on Tuesday. Fueled by rapid growth in podcast listening and smart speakers flying off store shelves, audio ad spending is regaining its cache on Madison Avenue where what’s old is cutting-edge again.
“We’ve seen direct advertisers fully lean into the full audio experience, podcasting in particular. But over the last 18 months, we’ve seen brands really start to come on board in full force,” said Ken Lagana, Executive VP, Digital Sales and Strategy at Entercom. “It’s because of a lot of things. Sonic branding has really become a very important component of the media mix. And we are seeing that level of importance translate into dollars.”
Speaking at the appropriately titled “Sonic Boom” panel, Oskar Serrander, COO at the podcast hosting and monetization company Acast, said it’s not just in the U.S. but across the globe where brands are reawakening to audio. He puts the credit squarely on podcasting.
“It’s become a medium where you have so much intimate room to connect with an audience that you haven’t before in radio and other audio media. It’s quite different and that’s unleashed a kind of creative power of what brands can do in this space and it’s been helpful for all kinds of audio channels,” said Serrander. He said Acast has not only seen radio advertisers coming into podcasting but also digital advertisers, including many who have aligned with influencers and in the past had poured their ad dollars into websites like YouTube and Facebook. But that’s not the case any longer. “Audio has become such a big thing that as a marketer you can’t ignore audio,” Serrander told the conference. “By not working in audio today you are really doing yourself a disservice for the future which is going to be more audio-driven,” he added.
Lagana said what’s attracting so many advertisers is the combination of personalization and high engagement levels. “Those engagement levels are so high, especially in the podcast space. There is really nothing else like it in terms of how you can keep somebody’s attention. And I think advertisers are really starting to get that message,” he said.
Device Makers Become Ad Sellers
The audio industry also finds itself with tech allies working alongside them to sell the medium. Jake Jolly, Product Manager For Display & Video Advertising at Google, said they’re working to bring marketers along to the value of allocating some of their budget to audio ads. It’s most successful pitch to buyers has been that combining audio with the other digital elements allows a marketer to reach a new audience at what he says can be as a “more efficient” CPM than video or display ads.
“Where you can reach users at a lower cost is really where our marketers are seeing the value immediately,” Jolly said. The challenge has mostly been educating marketers that they shouldn’t use conversion metrics such as whether someone bought a product after hearing an audio ad that they might use with digital advertising.
The podcast industry doesn’t have the sort of metrics that many marketers have come to expect from other digital media or even the reach and frequency numbers that have long dominated broadcast radio conversations. But Margaux Ravis, Executive Producer at the digital ad agency Vayner Smart, said audio has something even better: engagement.
“Number one, they’re opting into the experience,” said Ravis. “That’s such an incredibly engaged level. And you’re able to have interactivity in the most authentic way possible. Using your voice, there’s nothing more natural.”
Serrander said audio has long been viewed as a “very transactional” medium, often boiled down to just reach and frequency. “That’s not where the magic lies,” he said. “It’s really with a brand study of what happens over time.” He pointed to a BMW podcast campaign that wasn’t considered a success based on how many cars it sold but rather on the big lift it gave the brand’s perception as an innovator. “Sometimes the medium is the message and you can use it that way,” said Serrander.
More companies are also experimenting with ad interactivity in the audio sphere. Ravis said Pandora is beta-testing an interactive voice ad capability that allows the listener to become more engaged in the message. She said it will not just make a brand interactive but also make the ads more interesting so listeners don’t “resent” them.
Smart Speaker Spread The Word
One area audio companies see as a growing opportunity is on smart speakers, which have become to many the in-home radio and podcast listening device. Lagana said Apple has said it wants to “lean in” to radio for its smart speakers since it recognizes that as much as half of the requests to the devices are to play a local AM/FM radio station. Apple announced in June its Siri-powered devices would have more than 100,000 stations from around the world, including deals with iHeartRadio, TuneIn and Radio.com. That’s inventory, Lagana noted, that will be solely in the hands of the content producers to sell.
Google has also struck several deals with content creators and Jolly explained it’s because they want to make sure consumers are able to access the content they seek on a Google Home. Otherwise people may buy an Amazon Echo or an Apple HomePod instead.
“The Google Home as an audio consumption device is very much meant to be a platform for our users to consume whatever audio streaming they want, whether it’s music streaming or podcasts,” Jolly said. “This isn’t a space where Google sells into audio inventory across this platform.”
But advertising is a part of smart speakers and he said that even Google isn’t entirely sure how the two will ultimately work together. “How users experience ads within this content is very much a new space,” said Jolly. “We don’t have all the user feedback to understand that, so it’s where we need to partner with the industry to make sure it’s a comfortable space for our users as well as an effective one for marketers and publishers.”
Ravis, who primarily focuses on emerging technologies at her digital ad agency, said voice-based advertising isn’t all that different than any other medium in that it requires ads that have been created and optimized for it. “I think one of the early mistakes was people did not understand you have to rethink the audio user experience from the ground up,” she said.
Jolly said that’s something Google spends a lot of time working on with marketers since many believe they can simply strip down the audio track of a video ad and be done. Their message is that’s not the case. “You need to rethink how you engage in an audio-only experience,” he said they advise audio newcomers, and also share a warning. “Given the intimacy of the space we tout the opportunity that it presents, but it also can present downfalls,” said Jolly. “A bad ad experience literally in your ears is a much more bad ad experience than something on the web that your scroll past.” —by Frank Saxe