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.