Aug 16, 2023

Audio Advertising is Set to Thrive in a Post-Cookie Landscape

For years, the digital industry has seen incremental reductions of and restrictions around the data brands and marketers can use to scale and measure ad campaigns. The prospect of a convenient, intuitive replacement for third-party cookies remains unlikely. But brands can’t put their advertising efforts on pause, or dial them down, simply because they have access to less data than they used to. They simply need to look to privacy-safe, sustainable solutions, and to digital environments where their targeting and measuring needs can be met without heavy reliance on third-party cookies. And one area to which marketers can turn to solve these problems – obvious to some, hidden in plain sight to others – is digital audio. The exceptional growth it’s seen in audience size, available ad inventory, and diversity of content are highly appealing and easily accessible to marketers. Those who take advantage of this value will be well-positioned to meet their campaign goals and plan long-term strategies for a privacy-safe future. 

Ad-supported offerings present very promising opportunities for marketers who are concerned about data privacy and the effectiveness of their advertising practices into the future. Right now, around two-thirds of the people in the US listen to digital audio at least once per month. They’re deeply engaged and loyal to their favorite platforms: More than 62% of digital audio listeners subscribe to streaming services, and 61% of those listeners don’t skip ads. (Contrast that with the 19% of TV viewers who watch ads.) 

Audio ad tech evolves to support increased spending 

These factors have enticed marketers to stop thinking of podcasts as a channel for experimental budgets, moving them toward the center of their media plans: 53% of US advertisers will increase their podcast budgets this year. Investments in spending naturally stoke investments in technology. More programmatic buying and selling is coming to digital audio, and dynamic ad insertion is on the rise. Automation, measurement, and attribution are evolving accordingly in audio. And with marketers creating specific podcast budgets, we can expect more enhanced planning and campaign analysis in this space.

Interestingly, as the infrastructure comes together to support advertising at scale in digital audio, it’s being developed with a data-private future in mind. Any business in digital today will need to build for an environment where third-party cookies and mobile identifiers are restricted at best. Audio offers the opportunity to target consumers in an inherently privacy-safe and non-intrusive manner, incorporating meaningful contextual data such as time of day, weather, and content category. 

The contextual advantage of music and podcasts

Digital audio is often highly categorized. Music is commonly broken down by genre, trending content, and playlists. Podcast platforms create categories to enable listeners to filter and discover more content more easily. In other words, digital audio greatly enables contextual advertising, and reduces reliance on behavioral and intent data, by its own nature. Indeed, for years, digital audio has implemented contextual at or beyond the rate we’ve seen from other digital channels. And while some advertisers treat digital audio as an upper-funnel channel, that’s shortsighted thinking: Note how many direct-response brands have invested in podcasts. There’s an opportunity for marketers to take advantage of audio inventory before their competitor brands recognize the full-funnel value here. Listeners bring audio into every aspect of their lives – even while cooking, cleaning, showering, and driving. As such, digital audio reaches listeners in nearly every environment and mindset, at every stage of purchase consideration.

Finding the right controls and transparency for campaigns

While considering how to make the right investments for their brands, marketers should consider the differences between walled garden and open web audio platforms. Both have advantages, but the data privacy concerns aren’t uniform across both environments. Programmatic, as a largely open ecosystem, sees some variation in what user data is and isn’t passed through the bid stream. The programmatic marketplace opens up access to broader sets of audiences – but the data available is less user-specific, and not necessarily specific to any given platform. Programmatic systems may compensate by bringing in data from third-party providers to supplement the buy, but the downside is that involving additional third parties can increase data privacy concerns. 

In a logged-in platform, users have the option to consent to their data being used in specific ways, including for enabling third-party advertising. Some audio streaming platforms have been building up their proprietary ad stacks, too, including through ad tech acquisitions. There’s often more – and more unique – user data here, but only data around the platform’s consented users. Also, logged-in platforms provide their own measurement and reporting insights, but those insights frequently need to be normalized in order to be compared against other platforms. And platform-specific insights might not tell the full story about attribution beyond that platform.

As is always the case with walled-garden platforms, marketers will have to strike the right balance between control over the buy and transparency around performance. With either option, marketers need to consider what risks they can and can’t take, and what controls they require or not.

All told, not only do users consider the ad experience to be less intrusive in digital audio than in other channels – proven through listeners’ willingness to stay engaged and response rates – but advertisers can execute high-performing campaigns in audio while upholding high standards for users’ data privacy. Audio as an advertising channel is a strong contender in the ever-evolving digital ecosystem – an attractive option for brands aiming to find an effective, future-ready media mix. And at this stage in digital audio’s evolution, advertisers have an opportunity to get in close to the ground level and find the right inventory to meet and surpass campaign goals. 

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