There are pressing questions about the viability of programmatic trading of display ads. Low viewability and fraud, combined with a disincentive to self-police makes the industry an especially attractive proposition for anyone looking to game the system and essentially means the display ad ecosystem is far from a sure bet.
Programmatic buying is essentially the automation of the buying process for ads. Rather than have humans laboriously seek out ad spots on an ad network, programmatic services seek them out automatically based on criteria determined by the advertiser. They’re undoubtedly more efficient, but in addition to the viewability issue of display ads there’s also an increased danger of ads bought programmatically appearing in inappropriate places.
But is programmatic trading a safer option on another medium, one without a history of ad revenue having fallen as a result of a race for scale, as revenue for display ads has done? What about on a medium where ad spend has traditionally been resilient, and the interruptive nature of the ads has traditionally been accepted by audience and advertiser alike?
That’s the bet of Xaxis, which has launched the UK’s first programmatic platform for digital audio ads in partnership with Global’s Digital Audio Exchange (Dax). Xaxis UK’s managing director, Nicolas Bidon, told TheMediaBriefing why the option is a safe bet for advertisers:
“As an advertising medium what I find interesting is… some of the discussions going on around display as a branding medium with issues of viewability, issues of fraud and all the sort of noise that that means I think advertisers are starting to doubt the efficiency of display branding medium. I think audio is quite exciting in that respect because you don’t compete when you listen to an audio stream and you get an ad, and you don’t compete for attention with anything else.”
Profit and programmatic
So why launch Xaxis Audio now? The data demonstrates that more people than ever are consuming radio on digital sources, and that the amount of mobile streaming of media (mostly video, although audio makes up a sizeable portion of the rest) continues to grow exponentially. According to estimates by MIDAS, 17 million people stream digital audio in the UK every week. Bidon says:
“If you look at between 2013 and 2014 the number of digital audio streams has been growing 97% year-on-year, and it now represents 14.8bn streams. It’s starting to get to a level where there is scale to make the medium interesting when you compare it to other mediums like video or display.
Those figures – and the potential revenue that comes with them – are certainly at least part of the reason Xaxis Audio has been able to attract 130 publishers into the scheme, including Audioboom, Blinkbox, Jango and Rdio.
Safety in numbers?
But exactly how safe a bet is programmatic trading of digital radio ads? The audio inventory to which advertisers have access spans music streaming services, audio social networks and podcasts, after all, and it’s unlikely that users who listen to music streaming services will respond the same to a particular ad as they would to one that appears during talk radio, after all.
Additionally, while display ad programmatic can be gamed in terms of low viewability, it does at least have an objective measure of how an ad performs, even if that is a brute force metric like click-through-rates (CTR). Audio ads, by contrast, use ‘listen-through’ rates, a passive measure at best. Stuart Mays, director of commercial strategy at Global, told TheMediaBriefing:
“So much of mobile advertising has been performance-based and we wanted to create a platform that made sense of brand advertising on mobile. Clearly I’m biased on this, but if you have an exposure to a 10 to 40 second audio ad, it became apparent that the listen-through rates are extremely high, principally because that’s the way people listen to audio on their mobile devices.”
The power of audio
Mays believes that audio ads are superior in many ways to display, however, because of the inherently in-stream nature of audio ads, explaining:
“Because you’re clicking on a play button and putting it in your pocket, the idea of clicking on a banner as soon as the ad comes up betrays the user experience. There are CTRs but they vary quite enormously. They are completely bespoke to the brands we’ve been dealing with…all the way through from ‘how manly do you feel’ all the way through to ‘would you buy this product in the future’.”
Bidon agrees that such brand metrics are far from perfect and that proving the viability of audio ads, whether sold programmatically or not, is still a challenge:
“I think that’s a fair point; how you properly attribute the contribution of this medium in the rest of the media mix. That’s something I don’t think we have solved yet, but I would argue this hasn’t necessarily been solved for the rest of the digital space. Attribution is still a major debate within the industry. Using CTR as proxy for brand objectives is also not the way to do it.”
So while programmatic trading of audio ads using Xaxis Audio certainly provides brands with access to a greater audience – one that far outstrips any that an individual audio service could provide – the old problems surrounding how you demonstrate the worth of an ad remain. Xaxis Audio provides a much-needed service for advertisers looking to get in on the booming audio ad scene, one which doesn’t have the issues of fraud and viewability that display ads have. But it does so with the caveat that demonstrating the value of audio ads relies on the same measures of brand objectives as ever.