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Listen up!: Finding the right digital audio ad

Adi Pinco, July 11, 2022


Takeaways:

  • There are three main ways digital ad space can be purchased: manual ad insertion, dynamic ad insertion, and programmatic ad insertion.
  • Manual insertion is the traditional way to purchase ad space and, until recently, has been used for the majority of ad placements.
  • Dynamic ad insertion is the most popular way digital audio ads are placed and offer greater targeting options.
  • Programmatic insertion is in its infancy but offers more personalized messaging thanks to better targeting.
digital audio ads
Photo by ConvertKit on Unsplash

Like a lot of people, we feel lost these days if left commuting without our favorite podcast, or winding down at the end of the day without Alexa playing the radio in the background, or if on the treadmill without our well-curated gym playlist. Digital audio has become a staple of our daily lives.

Brands have taken note of our growing love of digital audio, with increased spending over the last few years on all areas. Highly effective due to its personal nature, and with endless creative possibilities, the growth of these formats has been music to many advertisers’ ears.

But like any other advertising channel, brands diving into digital audio need to buy their advertising slots in an effective, scalable, and context-appropriate manner if their campaigns are going to grab the ears of consumers.

For those still struggling to get their heads around the world of digital audio ads, let’s look into the three main ways that space can be purchased.

1. Manual ad insertion 

This is the traditional way to purchase ad space, especially for podcasts. Usually, brands will negotiate directly with publishers or podcasters. Ads are then ‘baked’ into the audio, meaning they are part of a single audio file that cannot change. Hosts or artists can read these ads out, blending seamlessly into the content.

Until recently, a majority of ad placements were run using this method – in 2019 52% of podcast ads were purchased manually. The method also chimes with consumers, with the often personalized tone, familiarity of a host’s voice, and naturalistic insertion leading to a 71% brand recall.

The downside is that these kinds of placements can be taxing to implement and lack true scalability. As the market for digital audio continues to expand, these individual insertions will be time-consuming for advertisers and may cause brands to miss out on potential audiences. 

2. Dynamic ad insertion 

Dynamic ad insertion (DAI) is currently the most popular way that digital audio ads are placed, seeing explosive growth during the pandemic. Second best to manual podcast insertion in 2019 with around 48% of placements, it now accounts for 84% of podcast ads.

In short, DAI differs from manual insertion in that publishers mark spots within an audio file where ads can be inserted. Advertisers are then able to serve ads the moment audio is downloaded. It’s basically a win-win for brands and creators – ad messaging can be kept up-to-date while back catalogue can continue to be monetized.

DAI gives advertisers greater targeting options, meaning audiences to be found via genre, geotargeting, and even specific episode titles. Data signals can also be harnessed with DAI to serve ad messaging dependent on variables such as time, or even weather data. The use of audience data overlays from third- or first-party data is also possible.

Despite this, murkiness about the true measurability of DAI hampers its effectiveness. While advertisers can see downloads of a podcast, whether an advert was actually listened to remains somewhat a mystery.

3. Programmatic insertion

Programmatic is still very much in its infancy within the digital audio space. Though effectively used on many music streaming platforms – Spotify has Private Marketplaces (PMPs) and Programmatic Guaranteed (PG) buys available to advertisers – the podcast space is slower on the uptake. Only 1.7% of podcast revenue was generated through this buying method in 2021 (compared to 67% for display advertising back in 2019).

Its growth in the space could lower the barrier for entry for smaller brands and creators alike. More personalized messaging can also be served into the ears of listeners thanks to better targeting abilities.

There are however currently big question-marks over the brand safety solution in the audio space. While targeting via show type or description is possible, the ability to screen on an episodic level is not yet effective enough – the recent Joe Rogan vaccine denial scandal would give any advertiser cold sweats. As the technology develops and industry-wide safety standards are implemented, programmatic will start becoming a real contender in the digital audio space.

Any further questions on audio ads? Want to get further into the details on programmatic? Or do you have any other publisher-related questions? Get in touch with our team.