Audio streaming, Spotify and Pandora

In today’s digital world, traditional advertising methods are no longer enough to maintain competitive in the media and marketing space. Every day, people consume advertisements through a variety of content and streaming platforms. They easily absorb their information through streaming advertisements, whether watching shows and movies on Hulu, or even listening to music or podcasts on Pandora and Spotify. Unlike traditional advertising, audio advertising can reach a more targeted and specific demographic based on the content the user is consuming. Before we dive into what makes audio advertising successful and provide tips on managing a successful campaign, let’s start with the basics: what is audio advertising?

 

What is it?

“Audio advertising” is simple – it’s the advertising you listen to while on your audio-streaming platforms. When you are listening to streaming content on Pandora, Spotify or similar stations, you are likely being targeted with audio advertisements. Advertisers can buy space on such platforms, and strategically target users who fit into their desired audience based on data that is unique to streaming platforms via required profile creation. Each time a user creates a profile on platforms like Spotify or Pandora, they are required to put in basic information such as gender, age, and music preferences. This data can be translated into key demographic data which in turn serves as a way for potential ads to target potential niche audiences. With the growing popularity of audio streaming, the advertising space they offer has grown too. This comes as no surprise, since we have our phones with us at all times; while we are commuting to work or just running errands on the weekend, audio advertising is infused into the daily soundtrack of our everyday lives.

 

Why is it important?

It’s no secret that the world of advertising is changing drastically. Consumers are no longer just engaging with traditional media, and the audio advertising space is one of the new channels that can be utilized to capture your target demographic. Forbes stated that streaming is officially the lifeblood of the music industry in the U.S., considering that Spotify alone has a total of 191 million monthly active users. This means that advertisers must adapt to digital platforms in order to remain relevant. While the space is relatively new and continues to emerge, it is increasing in popularity each year with no signs of slowing down, as more and more users are shifting to multimedia and streaming platforms. While such platforms provide the option of ad-free listening or the choice to skip them, this comes at a premium, but studies have shown that only a small percentage of users choose this option.

 

However, skipping an advertisement could actually work in the advertiser’s favor. In an interview with Ad Age, Danielle Lee, Global Vice President of Partner Solutions at Spotify, said she believes that users will only skip advertisements that are not of interest to them. Therefore, the advertiser can ultimately better target their demographic. Not only will this allow advertisers to narrow down their target audience, but it will allow them to be more successful in their efforts to increase conversions. Individuals will listen and engage with advertisements that interest them and, thus, provide advertisers with important information about how to better target and adapt their marketing efforts. For instance, according to The Drum, platforms such as Spotify have log-in data that allows advertisers to hone in on specific groups of users based on their age, gender and listening habits.

 

This allows digital advertisers to target their specific audience while also being able to measure post-advertising data that is integral in evaluating the campaign. On Spotify, for instance, advertisers can measure user interaction and if they listened until the very end. While it is important to be able to track how many people your advertisement has reached, what is becoming more and more important is the user journey after it has been played fully. For example, did the user visit the advertiser’s website? Did the user make a purchase? This information allows advertisers to track performance in real time and close the advertising loop, providing them with a holistic view of engagement surrounding their advertisement, which then provides a more accurate calculation of their Return on Advertising Spend (ROAS) from music- to podcast-streaming platforms.

Even so, the number of Americans listening to podcasts has almost doubled over in the past 10 years. This platform has been selling advertising spots since 2011, but it hasn’t been until recent years that it has really taken off. According to Convince & Convert, 62 million American’s listen to podcasts weekly, and 90 million Americans listen to podcasts monthly, which is approximately the same ratio as Americans who regularly go to church. Podcast listeners differ from other listeners in a few keyways. As a starting point, podcast listeners choose their podcasts based on personal preferences. Podcasts are specifically tailored to niche audiences with a shared respect for the topic, podcast host or both. Furthermore, podcasts have high engagement and retention rates with low advertising skipping rates, due to the organic way the host incorporates the advertisements into their programming, the relevancy of the advertisements, and the overall respect listeners have for their hosts. There is a level of dedication to podcasts that has not been observed in the past, that is, the feelings of closeness between the listener and host and the sense they are speaking directly to you. While radio listeners tend to change the channel when advertisements come on, Adweek states that podcast listeners tend to hang on to every word of the show, advertisements and all. Listeners are more receptive to the brands the host endorses because of a deep level of trust that has been established between the host and the audience. This trust is closely tied to the level of engagement between the audience and the advertisement. IAB Edison Research found that 45 percent of podcast listeners visit a sponsor’s web page, 42 percent consider a new product or service, and 37 percent gather more information on the product or service after hearing its advertisement via a podcast.

 

Examples of Successful Audio Campaigns

One of the first and major successful audio campaigns was the partnership between Kia and Spotify. In 2016, the South Korean car manufacturer sponsored the very popular, curated Spotify playlist “New Music Friday” to introduce the new Kia Sportage. Kia was given one week to “take over” the playlist and, in doing so, displayed its logo in association with the playlist, displayed advertisements relevant to the new launch, and was given control of the first commercial break for free listeners. Music Business Worldwide states that the idea behind this strategy was to inform content plus context, while also communicating the right message at the right moment. For example, it makes sense for athletic brands to advertise in or sponsor stations and playlists that relate to being active or working out. It would make less sense for an athletic brand to advertise their newest running shoe on the “Just Chill” station. The choice to sponsor “New Music Friday”, a playlist with eight million followers, is one that paid off in a big way for Kia. According to the IAB Digital Buyer’s Guide, the campaign generated 10.5 million impressions, resulting in a 30 percent lift in brand awareness, 100 percent lift in brand perception, and 700 percent increase in brand consideration.

 

How to Take Advantage of the Market

Audio advertising is a rather new and emerging market that has yet to be utilized to its fullest potential. While the shift toward audio advertising on platforms such as Pandora, Spotify and other audio-streaming platforms can be daunting, it is where more and more listeners are going. Advertising in such spaces allows for targeted and efficient marketing practices, along with real-time data on the advertisement itself, how many people heard it and, ultimately, how many people are engaged. Advertisers can use specific data, from age and location to taste in music, to maximize their campaign’s effectiveness. Don’t let the novelty of audio-advertising intimate and keep you from entering the market. Here at MSSmedia we have you covered, and we know what we are doing. Let us execute your audio campaign for you.  As experts in media buying and planning, brand management, communications, digital and creative services for over 15 years, MSSmedia provides a holistic and result driven approach to our clients and their goals. Your goals are our motivation.

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