Data is powering marketing in general and advertising in particular in ways that could not have been imagined even five years ago. It’s important for folks in the audio space to bend their heads around this because data is, fundamentally, a form of marketing intelligence. And the more marketing intelligence that’s packed into ad inventory, the smarter and more valuable it becomes to the buyers and sellers of those ads.
One of the great differences between traditional radio spots and some online audio ads is the raw intelligence – the smarts – embedded into the advertising.
Needless to say, anything that makes audio advertising smarter is good for the advertiser (because the targeting is richer), good for the seller (because the inventory is more valuable) and good for the consumer (because the ad is more tailored to her personal needs and interests).
[The audio advertising marketplace has a] scarcity of smart impressions that advertisers covet and will pay high CPMs for and a glut of unintelligent impressions that are being marketed in channels that will accept them, which are very basic channels like the network radio marketplace where you don’t have a bunch of targeting imperatives.
But the problem, of course, is that presently the “smart impressions” are disproportionately available from pureplays like Pandora, not from the giants of the audio space: Traditional broadcasters with digital audio streams.
This is obviously counterproductive, considering the traditional radio industry often under-invests in streaming because the platform can’t be monetized in the same ways as the legacy platforms of AM and FM. But, you see, one key to monetizing the streaming platform is to increase the value of the inventory! Indeed, that’s exactly the strategy of the pureplays, and it likewise must be the value of ALL players in the online audio space.
In the burgeoning digital advertising marketplace, “dumb” inventory is simply “dumb” business.
So what’s the fix? Well it begins with gathering the necessary data. Agovino continues:
Put up a registration gate! Force a very light registration that at least gives you ZAG [zip, age, and gender]. That will turn away some portion, but every time we test, it’s a small portion. And the benefit to the value of the inventory is so dramatic, that it ought to be a no-brainer. It’s a key piece.
Historically, broadcasters fear the idea of registration for listening. But here’s the truth: If the content isn’t worth registering for, then the content isn’t worth much. Indeed, consider that consumers must “sign up” for almost everything of value we do online. Almost everything!
Don’t fear registration, motivate it. How? By being good enough to sign up for. By tailoring the content and/or the experience to the tastes and preferences of the registrant. Maybe there’s a higher audio quality or fewer spots promised in exchange for registration. Maybe you get to sample more choices or “skip” songs. Maybe you become part of a community of fans with direct access to the talent. The exact configuration is a function of whatever makes your fans’ hearts beat faster. Consumers will always trade-off the “bother” of registration against the value of what’s being registered for. That’s why you and I visit hundreds of sites that require us to log in.
Zip, age, and gender alone will go a long way to increasing the IQ of your digital audio inventory.
Smart audio inventory is in great demand – advertisers will pay double-digit-plus CPMs for smart inventory. This is not a remnant play [like display often is]. [Every advertiser we meet with] recognizes that the audio ad unit is premium, above the fold, native — however you want to look at it. It is inside of content, it is interruptive, it is a premium unit.
Yes, audio advertising is not easily routed around (like display). It’s not ignored on a page (like display). Hence its premium designation. But premium dollars can be extracted only if audio ad units are packed with the IQ to make them so.
And with the booming usage of mobile devices and the rush of ad dollars into the mobile space, there is no better high-value ad unit than an audio spot. I made that very argument to a group of investors at a conference in New York last fall. And here, Agovino makes it again:
Audio’s opportunity in mobile couldn’t possibly be clearer. The audio market stands to benefit dramatically by the audio ad unit becoming a very significant unit in the mobile ad ecosystem. It will. But the ad unit has to answer to the expectations of the advertiser. It has to be a smart ad unit. 2015 for the broadcast side of the market will put a lot of publishers on notice that they’ve got to smarten up their inventory, that the 3rd-party technology players can help to a certain degree. The efforts that we’re making will be a significant help in monetizing inventory…in the long haul.
Eat your brain food, audio advertisers. Smarten up your inventory.