Online Audio – What is it and is it HEAR to stay?

So many listeners out there, but how much are we listening? Personally, I would say I spend 2-3 hours a day listening to some type of online audio. In our household alone we account for 7 hours a day, at least!

The average user of online audio spends about 16 hours and 43 minutes a week! So, to answer the above question we are listening A LOT!

How can you use this to your advantage in this space? It is projected that ad dollars spent on streaming audio will rise 17% this year. We can take an audio commercial and target these listeners with Online Audio Ads. Online audio ads will target online listeners who are consuming online audio across devices. Devices include smartphones, smart speakers, laptops, desktops, tablets and even connected TVs streaming through apps. There are many targeting options available. First, we select the geographic are you are trying to reach and then we can target certain demographics or behaviors, like “small business decision-makers”, “gym-goers” or even “Major Appliance shoppers” to name a few. We also pair Artificial Intelligence targeting to help zero in on the core customer. AI optimizes when users are online and engaging. AI also takes into account, audience behaviors/characteristics, how frequently the user has been served impressions from this advertiser and how recently the user has been served impressions from this advertiser.

Where the ads will run is across major apps like Spotify, TuneIn, Triton, SoundCloud, iHeart and Dozens of online audio platforms.  Spotify is quickly becoming a leader in audio listening and is projected to take the lead over Pandora in 2020.

By June 2017, Spotify had 144 million monthly active users (MAU). It almost doubled that by the second quarter of 2019, tapping into 232 million MAUs. Of these, total premium Spotify subscribers amount to 100 million or more. Spotify has a 36% share of the global music streaming industry and this continues to grow. Smart speakers and mobile have been huge drivers of this growth.

According to Edison research and Triton Digital, 23% of the US population owns at least one smart speaker and over half of the people that do have more than one.  By the end of 2020 it is projected that 75% of all US households will have a smart speaker.

When streaming audio from a laptop, desktop, tablet or mobile device a companion banner ad can appear that is clickable. Below is an example of an ad on Mobile using Spotify.

Online Audio as a marketing tool is great for branding and awareness. It is also great at building loyalty with listeners. As consumers, we can be brand loyal and more than half of the people listening to podcasts said that they are somewhat more likely or much more likely to consider the brand they hear advertised. As an avid podcast listener, I would 100% agree with this statement. Whenever I hear a commercial during an episode of Dax Shepard Arm Chair Expert, my brow immediately raises and I pay attention to this brand more and have even sought out the product or service later on my own time to find out what it is all about. The inner voice in my head says, “If Dax endorses this product, then I must check this out!”

Now, what should your online audio ad include?

  1. The ask. Determine what the ask is in your ad and how hard you are going to sell it. How are you going to approach your listeners? Just like radio you need to command your audience in the right way. If it is a soft sell, it is suggestive but does not directly scream the call to action. If it is a medium sell you want to ask for their business but not in a forceful manner. If it is a hard sell, demand that listeners’ attention and create a sense of urgency.
  2. Script & Tone Your script should not exceed 30 seconds. Choose either a 15 second or 30 second or a script for both. The script should be a good representation of your brand in a conversational way. This will resonate with those listeners much better and will leave a great impression of the brand. Keep in mind you don’t have a lot of time to hook your listener. Decide one key takeaway in your script and make sure the message is concise and clear and you lead with this information.  Audio listeners are generally multitasking, so you want a message to cut through the clutter and is easy to follow along. Don’t cram 50 words in 30 seconds. Keep it simple.
  3. Voice
    Make sure the voice you use for your commercial is appealing and will connect with your audience. Have you ever listened to an audiobook with a horrible voice? This is a key component of your commercial so your audience will stay tuned in.
  4. Sounds
    Create a nice transition for your listener. Ads are inserted between songs, interviews or podcast content, so you need a nice clean start and finish to your ad. Music and sounds can be included but consider the volume of these and don’t start on a loud note.

Online Audio is also a great way to reach a more affluent audience. Monthly podcast consumers are typically in upper household incomes.

Streaming the Serial podcast or Armchair Expert by Dax Shepard or listening to the Amos Lee music channel on Spotify are common actions done on my iPhone and smart speakers; many times, up to several hours a day. Am I alone? Heck no. Even my kids have jumped on board; my 6-year-old with “Alexa play the new Frozen 2 songs” or my teenager with “Play the top 5 or make a new playlist.”

But it is not just me and my kids, across all ages online audio is HOT! The younger generation is eating it up, followed by 25-54 years old and even 55 and older are listening to their fair share. 74% of people 25-54 listened to online audio last month. For many advertisers, this is their marketing
sweet spot.

And the % of adults listening to online audio continues to rise. In the last month, 67% of the entire US population listened to online audio.

When it comes to streaming, Nielsen finds the average user with 41% of their weekly music listening time spent with streaming.

Nielsen says audio streaming reached 745.7 billion streams (up 23.8%). This growing demand for streaming music presents a new opportunity for online audio advertisers, as Comscore research indicates that free, ad-supported listening accounts for around three-quarters (77%) of music streaming app accounts. And that’s just the music apps.  There are so many ways to stream audio content as well from Podcasts, sporting events, news and more.

Podcasts have gone gaga! More than HALF of the US are listening to podcasts. And much like binge-watching your favorite show on Netflix, we are now binge listening as well. Research has shown that on average podcast listener listens to seven podcasts a week.

So online audio is like Radio transformed. We always need noise in our life, whether we are driving in the car, working out at the gym, flying for hours or just to break up the silence while working in your office. Personally, sometimes I welcome the quiet, after having rambunctious kids in the car or when I finally have some alone time at home, but those are rare occasions.

Borrell forecasts broadcast radio’s digital sales will grow 27% in 2020, hitting $1.25 billion. With radio on the rise, they attribute 12.8% of radio groups revenue coming from digital maybe even higher if you factor in online ad advertisements.

It is safe to say that online audio is booming like crazy and it is HEAR to stay. It is a great tool to target engaged listeners for branding and awareness, generate lift in purchase intent and to create brand loyalty.

What are OTT ads?

Are you down with OTT? You should be! Recent data shows more than half of all American adults are devouring over the top (OTT) content, and it is not a passing fad.

Ask friends for advice on a new show to watch or ask co-workers what movies they recently caught. You are not going to hear them talking about traditional TV, you are going to hear about an original series only found on Prime, or the latest Netflix movie. You might hear about a documentary or stand-up comedy show they are binging on through their Chromecast or Apple TV, and if you do hear about The Bachelorette or This is Us, they are likely watching it through their ABC or NBC app rather than through cable.

What does OTT even mean? It stands for Over The Top, initially named in reference to devices that bypass cable and instead go “over” a cable box to give the user access to streaming TV content. In OTT channels, content is delivered via an internet connection rather than through a traditional cable/broadcast provider.  

People are cutting their cable cords and are watching what they want, when they want. Many don’t even have to cut the cord, they never had it, their official term is “cord-nevers”. In fact, it is estimated that 67 million Americans do not pay for a traditional TV service and 1.3 million Americans cancelled their pay-TV service in the 1st quarter of 2019.

Streaming options continue to rise and there are a lot of players in the game and from Apple TV+ to Disney + the options seem endless. With so many options to choose from, people are likely pondering just how many of these streaming options we need AND how many can be supported? A new survey of 2000 plus verified adult users of OTT services is attempting to answer some if these burning questions by digging a little deeper. The survey, conducted by the Harris Poll and AdTech platform Open X , has revealed many interesting facts:

  • 52% of all US Adults over 18 use at least one OTT service
  • The average OTT user streams more than 2 hours of content every day
  • The average OTT user streams content across three devices and uses three different OTT services.
  • Usage also varies by age with Millennials spending more time on their phones than they do sleeping and 1 in 3 OTT users stating that screen size has no impact on the type of content or how long they watch.

What does this all mean? That OTT is rapidly becoming the norm. People are not just testing the waters anymore, they have cannon-balled into it and are swimming freely.

The next question in my mind then is just how many streaming services does one really need? And, how many is too many for the market? How many monthly fees are we willing to pay when new streaming services are coming at us all fast and furiously?  Survey says, “Up to $100 per month for about 15 channels/outlets.”

Are you overwhelmed? Most of us are. Managing our streaming subscriptions does not spark joy. We want it to be easy. Easy to choose, easy to manage and easy to navigate, however, there is no perfect way to cut the cord and no perfect magical combination of streaming that will give you everything you want.

Take sports for example. We have a Roku in our house, and I live with some massive soccer fans. In the last four weeks we have downloaded at least four different services in order to watch specific games that were not being broadcast on a service we already have. Keep in mind, in the last four weeks we have also decided to cancel two subscriptions. One as soon as the free trial was complete and the other as soon as the super special unicorn game we could only find on that app was over. We decided to keep one as it has a more massive variety and sports package and as for the fourth service, we are still in the trial period and we are still mulling over how necessary it is and if we want to keep it.

I would imagine a lot of households work this way. We are all constantly patching together different combinations of services to get just the right fit, yet like your favorite jeans, that perfect fit can be really hard to come by.  

The average consumer subscribes to at least three services, and we will continue to see several more debuts in the next year or less. Now instead of just turning the TV on, we actually need to compile a strategy and game plan to watch TV.

What makes us decide which services to use? Content is huge. For us, it was about where can we watch this game and who has it? Often there is only one place to watch so the choice is simple. The survey agrees to a point and determined that while specialized content is a good way to attract new viewers, it is not enough the keep them long term. 

As we are all working on patching together our own personal quilts of streaming, advertisers are busy keeping up with it all.

It is estimated that $76.1 billion was spent on advertising to television audiences in 2019, down from $79.3 billion in 2018. For 2020 it is predicted to rise 4% thanks to all the political ads we can expect in an election year.

What about Video ads and what do those budgets look like? According the IAB, marketers report we will see an increase for digital video budgets by 25%.

Some key areas are driving this spend increase:

Original Digital Video content— ODV now averages $9.3M (up 31% y/y); although advertisers consider ODV “essential”, the spend on this content type is still challenged by “quality of content”

• Advanced TV— Nearly 60% of advertisers report that they will increase their budgets for ATV this year, primarily because they find OTT to be beneficial in delivering tough to reach audiences

• Mobile and Desktop have reached parity in spending, with nearly two-thirds of the total digital video spend allocated evenly across the two devices

• Programmatic— Growth in digital video programmatic spending is expected to rise +4% year/year, now reaching 53% overall

With more video ads coming at them, how are OTT audiences responding to ads, especially when they are consuming content on their mobile devices? Going back to our Harris Poll and AdTech platform Open X survey, 40 percent of all OTT users will pause a commercial on their phone, search for info on the product, and display intent to purchase. That is a HUGE opportunity for brands as OTT adverting could generate incredible results. The key is to determine the best approach, the creative needs to be strong and there must be a call to action.   

Another challenge for advertisers is the diversity of the OTT universe. Not all providers allow advertising and not all in the same way. Some platforms are ad supported and others are not which makes it difficult to achieve a tactic that encompasses the whole scene.

The survey found:

• 72% of OTT users understand there is a trade off between watching free content and having advertisers use their data to serve ads, and most do not find ads bothersome if they are relevant
• 46% of OTT customers are willing to pay $10/month for a service with no ads
• 25% prefer a free service with ads
• 29% want a hybrid model with a few ads and a lower monthly cost
• Consumers are willing to pay up to $24/month for a premium package on a single service

These findings hint that OTT providers will most likely arrive at some kind of tiered pricing model with at least one of the tiers being ad supported to include the different customer segments.

As for ad targeting and personalization, there is immense potential to grow as we narrow in on the exact users. Lawrence suggests, “Advertisers will require a much richer inventory of creative to appeal to individual audiences and subsegments.” The concern here is the survey also found a approximately one third of consumers share passwords for OTT services. So he also cautions, “if the account holder is a 55 year-old married couple, but actual primary user is a 21 year-old college student, there might still be a disconnect.”

Although we don’t have all the answers yet, this new survey does help us to quantify some of the changes and gives us a bit of a baseline. I personally have lived through antenna only TV with no remote control, to FINALLY getting cable and the ever so important MTV in high school, to not being able to live without HBO, to all the on demand cartoons my boys watched to the now teens in my family downloading and deleting streaming services at a blinding speed. I’m not certain what exactly is next but I’m down with OTT and excited for the ride!

How Accurate is your Geo-Fencing?

One of the most popular products that we offer is Mobile Conquesting, and it’s also one of the more advanced and sophisticated products we offer, because of all the shiny bells and whistles that it offers. With Mobile Conquesting, we can target people by online behaviors (people who have shown specific behaviors online or are in a certain demographic) and also by offline behaviors (targeting people by where they have been tracked with their phone recently, such as a location, business, or specific brand name stores).

That’s the first layer of Mobile Conquesting. With the second layer, we can add in all sorts of “geo” terms, like geo-fencing, geo-retargeting, and geo-retargeting lookalike, where we put a tight radius around an address to capture device IDs and serve ads to those mobile devices. While this is a really neat product, some people might question the validity of how a tight radius is determined. Is the advertiser going to have wasted impressions because the radius is cutting into the neighboring business? Or they are counting people in the parking lot of the strip center that the business is located in? Is the radius actually around that business owner’s location?

IF YOU ARE DOING GEO-FENCING FOR YOUR BUSINESS YOU SHOULD ASK YOUR DIGITAL PROVIDER WHAT TECHNOLOGY METHOD THEY ARE USING!

I’m going to break down different methods mobile technology vendors use for geo-fencing businesses:

Radial Fence by Address – The most basic method of location-based geo-fencing is by placing a radius around a place’s address. Since addresses were built to provide directions to the location, many times the physical location is across the parking lot or on the street.  Research estimates that there can be up to 84% waste in targeting this way.

Radial Fence by Geo-Code – This method places a radius around the center of a business or location. Since most locations are not circular, there will inherently be waste. How much waste depends on the size of the radius.  Research estimates that there can be up to 75% waste in targeting this way.

Parcel Mapping -Also known as property mapping and tax mapping are maps typically built to identify property boundaries and is a popular data source for industries such as real-estate. Parcels can often contain many businesses in the same plot.  Research estimates that there can be up to 51% waste in targeting this way.

Polygon Mapping (This is the technology that we use with Mobile Conquesting) – Polygons are formed by tracing the store or place boundary based on satellite images and latitude/longitude and capture the precise boundaries of a location.  Percent waste = 0%

Now that we have taken a peek behind the curtain to see how geo-fencing is put into action, let’s talk about on-site visit tracking. Another one of the bells and whistles that business owners love about Mobile Conquesting is that they can see their return on investment because we can show how many people saw their ad, and then physically came to their location, but how do we track the actual business, and not surrounding areas?

In-Store mapping is the most granular polygon layer, serving to precisely map the outlines of the business or point or interest.

On Lot mapping is a polygon layer that separates a business from it’s parking lot.  In instances of a standalone business, this could be the entire parking lot.  For strip malls or adjacent storefronts, this will typically just be the area directly in front of the business.

Here is an example of an auto dealership polygon: 

How visits are verified:

Once the location signal is matched to a place, the final step is determining whether a visit has actually occurred.  The following data is evaluated to determine whether a visit is deemed to be verified:

  • Store hours – How frequently does the user visit and for how long? What are the store hours and when did the visit take place? Only visits that occur during open store hours are counted.
  • Employee status – Understanding employee status allows (when people work and how often) allows the system to exclude employees.
  • Dwell time – How long did the user spend in the store? Dwell time is used to filter for inaccurate visits.
  • Speed – How fast was the user moving when he/she was tracked as a visit? If they’re moving faster than then the system’s average speed threshold, the visit is not counted.
  • Horizontal accuracy – What is the percent accuracy of the lat/long the system received? If the horizontal accuracy that falls within the polygon that is being tracked is not higher than the system’s average percent threshold, the visit is not counted.

This verification process means that the system has a 94% accuracy rate!