As digital buying becomes more prevalent in radio and data-driven metrics drive advertising, industry experts are predicting a rise of programmatic across the entire audio content spectrum – but can we expect a total takeover, and if so, how soon?
Despite being a smaller segment compared to others like CTV, programmatic audio’s significance is growing, with expectations of the market doubling to about $4 billion by 2025.
The slowest audio realm to grow for programmatic? Podcasts. Programmatic buys accounted for only 11% of podcast revenue in 2023. However, this is a marked increase from 2021’s 2% and 5% in 2022, according to IAB data. In contrast, other digital channels like social media and Connected TV (CTV) see programmatic making up 87% of their revenue on average.
In a conversation with AdExchanger, Ad Results Media CEO Kurt Kaufer said he anticipates that programmatic growth in podcasting will continue to double for a few more years before slowing down.
So what about streaming radio, which holds fewer options for programmatic? Kaufer says streaming is “much smaller” and, “Ultimately, we would buy that directly with the networks versus having to buy that via the DSP.” The more first-party data a streaming platform collects, be it YouTube or a radio station that requires an account to listen, the easier it is to collect the data that drives programmatic. Audio continues to suffer in a “last-click attribution” society, even as cookies and third-party trackers die out.
However, podcasts are slower to adopt programmatic compared to streaming audio, which is already mature in programmatic activation, according to Matt Shapo, director of digital audio and video at the IAB. Rebekah Shalit, group director of digital and programmatic partnerships and innovation at Dentsu, notes limited options in programmatic for streaming audio compared to other channels.
Another hurdle for programmatic audio: the personal touch. Host-read ads, known for their effectiveness, are still a mainstay in podcasting, with additional availability in radio and streams. As brands want to maintain their personal connections to the audience, they defend that space.
Libsyn CRO Dave Hanley told AdExchanger, “In the not-too-distant future, programmatic is probably going to catch up with our host-read revenue.” Dynamically inserted ads, making up 92% of podcast ad revenues in 2022, contribute to the rise of programmatic audio. This method also holds usefulness to previously created content, as ads can be updated across a show’s back catalog.
Even as open-exchange buying creeps into broadcast offerings, many insiders believe audio companies would be smart to protect their premium inventory and listener experience.
