Everything you need to know about programmatic podcast advertising
Podcast ad spend is predicted to grow from $1.75B in 2022 to $2.66B in 2024 - an increase of 52%. While programmatic podcast advertising represents a small fraction of the overall spend against podcast advertising, programmatic podcast buying is expected to grow from $117M in 2022 to $238M in 2024 - an increase of over 100%. As the overall podcast advertising pie grows, the portion of that inventory purchased programmatically will continue to grow at an astounding rate.1
As trailblazers in the audio industry, Ad Results Media is really excited about this momentum and believes we are at a real tipping point for programmatic audio. Programmatic audio advertising is the automated selling and insertion of ads in audio content such as podcasts, audio articles, digital radio, and streaming music services. As a result, advertisers get better targeting, measurement, and retargeting to execute campaigns with great efficiency.
What is programmatic advertising?
According to eMarketers’ Programmatic Advertiser Explainer report, “programmatic advertising includes any ad that is transacted or fulfilled via automation. If technology takes on any decision-making in the ad serving process, it’s programmatic advertising.” In 2022, programmatic encompasses over 90% of US digital display ad spending and 87% of all digital video ad spending.
In a perfect world, programmatic media benefits both buyers and sellers by enabling them to reduce the number of people required to buy or sell media.
But for advertisers specifically, they can be more efficient with their media investments by shifting spend from less valuable audience segments and reallocating them toward more efficient segments and placements.
Publishers can increase ad revenues by accessing real-time demand from advertisers - this is particularly advantageous during periods of high demand and competitive bidding. Programmatic also allows publishers to monetize any remnant inventory.
What are programmatic podcast ads?
Programmatic podcast ads are streaming audio ads that are purchased through automated marketplaces. Rather than purchasing ad spots manually, buyers set parameters for their audience and spend and use machine learning to purchase ad placements.
Programmatic marketplaces can be used to buy and sell virtually any type of podcast ad, including both pre-recorded and host-read ads.
Brands that advertise via radio and music streaming services can also take advantage of programmatic audio advertising. Programmatic audio ads use the same automated bidding and placement systems, but can be featured across streaming radio, music, and podcasts alike.
How programmatic podcast ads work
Unlike typical podcast ads, programmatic podcast ads rely on data, automation, and machine learning for the purchasing and placement of podcast ads.
The two most common models for programmatic podcast ads are demand-side platforms (DSP) and supply-side platforms (SSP). Demand-side platforms are focused primarily on buyer’s needs, helping advertisers place ads with the right audiences. Supply-side platforms focus more on sellers’ needs, with a goal of selling all available ad inventory in the most efficient and effective manner possible.
In both cases, marketplaces use data from buyers and sellers to automate the buying process. Rather than manually purchasing ad spots, advertisers can rely on automation to purchase and place ads in a way that maximizes ROI.
Benefits of programmatic podcast ads
Programmatic podcast ads offer excellent value to advertisers. When used successfully, advertisers enjoy better targeting, measurement, and retargeting, allowing them to execute campaigns with greater efficiency.
Some of the biggest advantages of programmatic podcast ads for advertisers include:
- Audience-first buying precision and efficiency
- Pixel-capable for counting, optimizing, and modeling
- Creative testing to learn in real-time
- Controlling the reach/frequency of your ads
- More efficient CPMs vs. direct buys
- Transcription-based brand safety options to ensure your brand bid controls the context in which your ads appear
- Finding your exact audience when they are listening
- Turn-key with the right agency with the right infrastructure
Challenges of programmatic podcast ads
While programmatic advertising has a lot of benefits for podcast advertisers, it also comes with challenges.
Some of the issues that advertisers may need to navigate with programmatic podcast ads include:
- Buys are most scalable with produced ads, however, in some cases, you lose the ability to have a turn-key host endorsement campaign
- Exclusivity is attainable only with direct campaigns
- Podcast hosts are still warming up to the idea of automated buying so inventory is smaller than streaming
Programmatic podcast ad platforms
At Ad Results Media, we work with both demand-side and supply-side programmatic marketplaces. Based on our experience, the best platforms for programmatic podcast advertising today include:
DSPs (demand-side platforms):
SSPs (supply-side platforms):
Trends in programmatic podcast advertising
According to eMarketers US Podcast Advertising Report 2022, ad spending on podcasts continues to grow at double-digit rates annually and will exceed $2 billion in 2023 and $3 billion by 2026. Podcasts will account for more than one-fourth of digital audio ad revenues this year.
In 2021, the number of brands buying podcast ads increased 14%, per MediaRadar. Tech, media, and finance brands spent the most on podcast ads in 2021, with finance increasing their YoY ad spend the most at 43%.1
Despite the advantages offered by programmatic ads, the podcast world has been relatively slow to adopt this format compared to other channels. While programmatic podcast buys are seeing some momentum behind them, most podcast ads are still sold through direct buys.
A few reasons that programmatic podcast advertising has been slower to grow than other programmatic channels include that ad tech stacks are still maturing, podcasters fear that programmatic could reduce their ad prices, and many advertisers prefer host-read, which they don’t realize can be bought programmatically.1
The future of programmatic advertising and podcasts
At Ad Results Media we don’t believe that either direct buys or programmatic podcast buying is inherently better than one or the other. Some of the most effective campaigns we have run for our clients utilize both buying approaches. However, programmatic podcast ads help brands win with contextual relevance and efficiency; a balance that is often hard to achieve with other mediums.
According to Ad Results Media’s VP of Media, Gretchen Smith, “Securing actual contextual relevance through digital programmatic ads can be challenging. While some of the challenges can be addressed using DCO, I believe that it still falls short of the contextual alignment we can achieve through programmatic podcast ads. The organic nature of the conversations that occur on podcasts are the perfect environments to authentically insert topical ads or products."
Get started with programmatic ads by partnering with Ad Results Media for your next podcast advertising campaign.
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Sources:
1eMarketer, May 2022
