Not Just Music: The Shifting Audio Landscape
Recent changes in the audio space have led advertisers to re-evaluate the role of podcasts within a media strategy. Harmelin has long addressed the need to own all screens both in and out of the living room, and our audio approach has followed suit by incorporating “Audio Everywhere” strategies into media plans. Within the audio toolbox, podcasts have moved out of the realm of “curiosities” and have become a viable advertising option.
Historically, radio-esque media tools like streaming audio services Pandora and Spotify have acquired technology that allows advertisers to buy podcast inventory at scale, targeted to their key audiences. Podcast ads help to combat the growing banner blindness within the digital landscape, compelling advertisers to find innovative ways to deliver the message to their audience.
Major Acquisitions Changing the Audio Landscape
In February 2019, Spotify announced it would purchase podcasting companies Gimlet Media and Anchor FM, Inc. for $340 million. For the unfamiliar, Gimlet Media is a podcast production company referred to as the “HBO of Audio.” Anchor, on the other hand, allows podcast creators to distribute their content on platforms like Apple Podcasts, Google Podcasts, TuneIn, and other popular podcast aggregator platforms. Anchor also powers creation and distribution for more than 40% of all new podcasts that are created. It recently launched Anchor Sponsorships, a platform that streamlines an advertiser’s ability to match with podcast creators. With the acquisition of Gimlet and Anchor, Spotify now owns five key pieces of podcast advertising: content, data, distribution, sales, and streaming technology. The acquisitions have allowed Spotify to become a streaming audio powerhouse and content creator. Prior to the acquisitions, users could listen to and discover podcasts on Spotify in the same way they did on Apple Podcasts.
In March of 2018, Pandora announced the purchase of AdsWizz, a programmatic audio and monetization marketplace, for $145 million. This acquisition signaled Pandora’s commitment to enabling advertisers and agencies to buy their inventory programmatically through the same platforms as display, video, and other programmatic channels. AdsWizz’s tech is already integrated into buying platforms such as DV360 and The Trade Desk which can be leveraged by Harmelin’s in-house programmatic trading desk, DeskOne. This makes buying audio inventory through AdsWizz’s marketplace and on Pandora easier. Part of AdsWizz’s programmatic enablement offerings is pre-recorded, dynamic ad insertion in podcasts. Dynamic ad insertion allows advertisers to target listeners based on data and behaviors rather than a national sponsorship with a podcast directly. In this way, dynamic ad insertion works in the same way as buying display banners or standard targeted audio on Pandora. However, podcast ads are inherently more effective as live reads by hosts. They are less intrusive and more organic.
Podcasting as a Key Media Tool
Spotify’s and Pandora’s increased investments in audio technology and content likely means that advertisers will be able to buy addressable audio across podcasts and streaming music as part of a single buy. For example, an advertiser who normally works with Spotify on streaming audio advertising might soon see proposals which include streaming audio, podcast live-reads within Gimlet and Anchor content, and dynamic ad insertion within podcasts distributed on Spotify.
Ongoing acquisitions and mergers with major audio platforms will ultimately push the envelope due to the ease of planning, buying, and tracking. It’s likely that Pandora and Spotify will continue to develop their programmatic pipelines across their audio inventory. We may also see both companies develop audience analysis tools in order to better plan and execute audio buys.
The Audio Future: Certainly Uncertain
As with all media vehicles available to advertisers, there is no “silver bullet” when it comes to targeting, tracking and measuring a podcast campaign. Disparate technologies and inventory solutions require in-depth understanding of the space’s use cases and opportunities. The only certainty regarding the new audio frontier is that an ever-consolidating and shifting industry requires agencies and their clients to be nimble and well informed of industry changes.