In one of their latest articles, ExchangeWire writes about the consolidation in digital audio. You can find there an analysis of the investment within digital audio over the course of the last nine months. It proves that the market has great potential. Investments in companies offering digital audio products totalled $10.84bn (£7.97bn) from the start of the fourth quarter, according to data obtained by ExchangeWire.
Tilly Sheppard, product manager, Xaxis, commented on the audio industry:
“The concern in the early stages of the pandemic that there would be a drop off in audio user consumption hasn’t been borne out. In fact, the growth of podcast listening, in particular, proves users have continued to appreciate the high quality, screen-less entertainment that digital audio provides. Combined with the growth of programmatic capabilities in podcasts, this user demand has driven brands to the channel in huge numbers over the last year or so”.
Then she mentioned some of the key benefits of programmatic:
“Programmatic has opened up exciting new ways to make digital audio ads relevant to users. Creative can be dynamically personalised using behavioural data; location; age; gender; time of day; and weather, to ensure ads truly capture user attention and build brand awareness. […] We’re also seeing how audio personalisation can work within the high growth area of voice-enabled devices, with ads tailored to both the device and what the user indicates they are interested in.”
One alarming thing within the audio is the major tech firms under antitrust scrutiny (Apple and Amazon). Lately, Apple bought a classical music platform (Primephonic) and deactivated it without a clear message about planned rebooting. Nevertheless, when it comes to purchasing, companies are more likely to invest in content-based growth opportunities. They are no longer so interested in company acquisitions. The leader here would be Spotify taking over two great podcasts: Bill Simmons’ The Ringer for €180m (£154m) and The Joe Rogan Experience for $100m (£73.6m).
Chirs Shuptrine, VP marketing at Kevel, is of the opinion that this level of consolidation could harm the prospects of podcast advertising in the long run. He said:
“There’s no denying that podcasting has grown in popularity. And ad tech innovation invariably follows audience shifts.“
He predicts that podcast advertising will be dominated by a few players:
“[…] podcasting is not as open as the Internet; a couple of platforms have a monopoly over distribution, and we can expect consolidation and a walled ad garden approach. This further limits room for ad tech vendors”.
He says that
“audio targeting leaves much to be desired. While you do receive IP address (allowing for some data augmentation), this is an imperfect approach. And are episode genre, content, and name complex enough to justify the growth of many competing DSPs/SSPs? I think there will still be much innovation here, but podcasting ad tech is unlikely to be a breeding ground for new vendors, and I expect a few players will own the space outright”.
We highly recommend the original article.
