More than ever, consumers are flocking to streaming services, listening to music through connected devices and adopting voice technology as a way of engaging directly with those devices—putting audio front and center in their daily lives. These new habits are creating massive shifts in the consumer journey, spurring a renewed focus on the role of audio in people’s lives.
The truth is, there’s never been a better time to plug audio into your media mix, because it takes you places that other media can’t go. According to Nielsen, 79% of audio is consumed while people are engaged in activities where visual media can’t reach them, whether it’s taking a road trip in the car, hitting the treadmill after work, or even channeling your inner rock star in the shower. According to a study by AdAge and The Trade Desk, marketers and media professionals in the US have doubled their projected share of investment in digital audio over the last two years, saying they’ll allocate 11.6% by June 2017 (up from 7% last fall and 5.5% the year prior).
The key to unlocking that investment is programmatic audio. In the same study, over two-thirds of professionals (67.5%) said they are interested in buying programmatically with streaming music services. We’re witnessing this growing interest firsthand at Spotify. Since launching a private marketplace offering for programmatic audio in the fall of 2016, the channel has outperformed expectations, with a significant number of audio PMPs created globally in the first quarter of 2017 alone. The growth is happening across verticals, too, with categories as diverse as retail, QSR, auto, financial, CPG, telecom, entertainment and more all vying for inventory.
We’re pleased to share that Spotify is now testing open RTB exchanges for our audio inventory through select SSP and DSP partners. We believe the marketplace is ripe to meet the pent-up demand for audio and remove friction from traditional buying processes. Programmatic helps achieve this in a few key ways:
- Ubiquity. As people increasingly consume media across devices, the marketing landscape is shifting towards people-based marketing and away from a reliance on cookies. Programmatic offers the best of both worlds, allowing advertisers to reach their target audience seamlessly across devices with Spotify’s unique people-based insights as well as traditional device data.
- Data Integration. In addition to enabling advertisers to execute targeting at scale, programmatic allows them to integrate their data with publishers. Buyers can leverage third-party audiences from data suppliers or plug their own CRM data into publishers’ data and develop custom segments to reach their known customers.
- Optimization. With programmatic, advertisers can operationalize an audio campaign with ease, whether it’s executing across a full stack of products, optimizing campaigns on the fly or geotargeting seamlessly. Optimizations like targeting, tracking, deeper reporting and frequency capping are but a few of the optimizations available.
- Innovation. With greater ease of buying across devices and expanded data capabilities at their fingertips, advertisers can explore more personalized and dynamic ways to reach their audience, whether it’s through custom creative, sequential message storytelling or even more innovative solutions—like a recent campaign by The North Face on Spotify with the first-ever weather-triggered song release. Innovation through voice-activated devices like Google Home and Amazon Echo is also creating new opportunities for engagement through audio.
As one of a select few platforms to offer programmatic across audio, video and display, Spotify is proud to be a leader in building this new marketplace. As the industry looks towards executing people-based marketing campaigns at scale, digital audio will become more vital than ever and programmatic will become a primary channel for buying it, alongside other premium video and audience targeting solutions—taking full advantage of the capabilities available to marketers and helping them reach the right consumers in the right moment.
Les Hollander is the global head of audio monetization at Spotify.