We’re all ears: Why digital audio advertising is the next big thing in mobile

Chris Childs, UK managing director at TabMo, discusses the opportunities presented by programmatic audio advertising

The annual DAX report, the Rise of Digital Audio Advertising, is always a useful industry benchmark, and this year in particular it makes for interesting reading.

For us at TabMo, there are some key findings that stand out.

Digital audio is seen as an integral part of media strategies by 86 per cent of advertising agencies and 66 per cent of brand advertisers.  Presumably based on that opinion, 85 per cent of respondents (who were manager-level or above employees at media agencies and advertisers in the UK) said they will increase their investment in digital audio in the next 12 months.

It’s no secret that the audio scene is in a stage of rapid transformation.

Podcasts and smart speakers
7.6m people in the UK now listen to podcasts every week for example, around 25 per cent more than last year, with further growth forecast. As well as the increase in the number of people plugged into their headphones, this channel opens up a new audience of non-music listeners for advertisers (according to the Midas Digital Audio Survey Spring 2019, more than half of podcast listeners, 4.5m, do not stream music).

While PCs and smartphones still account for 75 per cent of the digital audio content consumed, perhaps unsurprisingly, smart speakers now account for 17 per cent of it – a proportion that seems likely to rise rapidly.

Audio opportunities – and concerns
Digital audio offers many advantages; 85 per cent of the DAX report’s respondents said it lets them reach consumers on the go, while 81 per cent cited contextual relevance as a benefit.  78 per cent felt that listeners are highly engaged and reaching audiences of all ages was a plus for 73 per cent.

With this in mind, research findings from Xaxis and the Interactive Advertising Bureau (IAB) Europe announced a couple of weeks after the DAX report is equally pertinent.

This report found that only 15 per cent of buy-side marketers and 30 per cent of those on the sell-side are confident in their understanding of programmatic audio. Despite this knowledge gap, six in 10 of these marketers are looking to increase their programmatic audio spend over the next 18 months, with 63 per cent listing targeting efficiencies as a reason and 44 per cent wanting to take advantage of data insights.

However, 49 per cent of respondents are concerned about the lack of clear understanding around the impact of programmatic audio and lack of technology is an issue for 44 per cent.

Behind the statistics
There seems no doubt in the opportunity offered by programmatic audio advertising – particularly as we approach what many predict will be a ‘screen-less media’ future.

TabMo has had this in its sights for some time now, announcing a programmatic audio module in the latest evolution of our Hawk platform earlier this year. The aim is to capitalise on audio by providing an additional way for advertisers to reach their audiences when they are on the move – the one-to-one nature of mobile makes this a powerful opportunity for brand messaging.

Digital audio can boost mobile advertising, adding as it does another dimension on which the same layers of audience targeting can be applied.  We are seeing particular success with retargeting.  Someone reading a news app on their phone might see an ad from a bookseller offering a ‘two for the price of one’ deal on books for example.  Tuning in to Spotify or Deezer, or listening to a podcast or radio app and hearing the equivalent audio ad or a complementary message, reinforces the promotion, and makes it more likely that they will respond.

Uniquely, Hawk enables advertisers to determine the driver for a store visit, whether someone went because they’d seen a mobile ad or heard an audio one, or due to a combination of both.  As a result, we know what works (and what doesn’t); this transparency helps marketers to make better decisions for their cross-channel campaigns.

For the moment at least there’s no doubt that audio is a growing channel – and advertisers have to follow their audiences.  Agencies are acutely aware of this (we’ve even heard of one putting a campaign on hold so that it had time to produce audio ads), which accounts for the predicted increases in audio budgets.

It’s very early days, and of course, programmatic audio advertising needs to deliver, both for brands and consumers.  So far, the intent seems to be there as the industry recognises the significance of the channel and the importance therefore of tackling its challenges.  Listen to this space…