Programmatic audio is a difficult sell.
Advertisers find it difficult to assess audio content at scale, thus most digital audio campaigns, particularly in the podcast sector, are performed through direct deals.
This puts digital audio platforms in an odd position, as they continue to sell audio ad spaces directly while using programmatic for display and video advertising.
That is why SoundCloud is now selling display and video advertisements through open auctions and programmatic private marketplace (PMP) arrangements that combine various forms of inventory. The offers are available through PubMatic, an SSP that SoundCloud has already integrated with. However, programmatic audio is not included.
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Display and Video over Audio
Given that SoundCloud is primarily an audio network, the emphasis on display and video assets is somewhat surprising.
That’s because programmatic audio, particularly outside of the US market, “is still fairly nascent” in comparison to programmatic display and video, according to Jonathan Kopitko, senior director of global advertising partnerships for SoundCloud.
He believes that by integrating multiple types of media, SoundCloud might attract new programmatic customers. The aim is that once advertisers understand the value of SoundCloud’s logged-in user base and first-party data, they will be prepared to buy more inventory across media types, potentially including audio, he added.
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Kopitko stated that audio formats are “behind the marketplace” in terms of programmatic adoption. However, to “make sure we’re set up for success in the future,” SoundCloud wants its programmatic pipelines ready for when audio takes off.
Leaning into PMPs
However, audio is currently being sold directly. According to eMarketer, programmatic sales account for 26% of digital audio sales in the United States this year.
He stated that SoundCloud sells between 30% and 60% of its total inventory programmatically in the United States, Canada, and the United Kingdom. Outside of those markets, programmatic peaks out at roughly 30%.
To generate programmatic demand, Soundcloud’s strategy comprises display spots in both the desktop and app experiences. Beginning in 2016, it included pre-roll video before audio programming.
Other digital audio services have expanded beyond audio ad inventory. For example, Spotify has introduced new types of display and video inventories in recent years.
This type of inventory is appealing to marketers. Some of the agency partners with whom PubMatic collaborates on optimizing supply channels for programmatic transactions have specifically sought SoundCloud’s inventory, according to PubMatic CRO Kyle Dozeman. He said that SoundCloud’s logged-in user base, as well as its appeal to passionate musical subcultures and Generation Z, significant differentiators.
SoundCloud’s pre-roll video helps bridges campaign gaps by extending the audience for CTV buys, according to Kopitko, “because [buyers] may not be finding all of their Gen Z audience in these CTV environments.” He stated that around 70% of SoundCloud’s viewership is under the age of 35.
meanwhile, “the conversation still needs work in regards to where audio sits, and whether an audio video experience can be directly connected to a connected TV experience,” he stated!
Because SoundCloud has a logged-in user base, the company believes it is well-positioned to capitalize on the switch to deterministic IDs over cookies. Kopitko explained that ID providers can use the email addresses of logged-in users to generate anonymised identifiers for targeting and attribution.
SoundCloud is in the early stages of investigating UID2 integration and is open to other alternative ID integrations if demand exists; however, it is also progressing cautiously due to sensitivities about how its first-party data is handled in the programmatic supply chain.
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