Alexis van de Wyer, CEO, AdsWizz
Programmatic audio has been in the conversation for several years, buffeted by conflicting sentiment in the industry. The tech companies which provide tools for segmenting audiences and delivering targeted ads have wanted audio publishers to get with the program(matic) and contribute inventory. On the supply side (radio in all its forms) there is some fear of price reduction for audio advertising. The advertisers and agency buyers need traditional and online radio to support the efficiency and immediacy they have gotten used to when buying programmatic display and video.
As with other emerging systems, a tipping point is sought. In 2018 there is a fresh sense that programmatic audio is coming into an era of recognition and marketplace maturity.
In Pandora’s acquisition of AdsWizz, the largest music streaming service in the U.S. joined with a leading ad-tech firm that offers a complete vertical stack of software-based targeting and delivery tools. The deal was announced in March, and closed this month. In the same time frame, Google’s DoubleClick programmatic unit opened to digital audio, bringing inventory from Spotify, SoundCloud, and other major publishers (including Pandora to come soon), marking a milestone in the arrival of audio programmatic to a scaled universe of buyers. This week AdsWizz won the annual Drum Digital Trading Award for best programmatic platform — a feather in AdsWizz’s cap, naturally, but the more far-reaching point is that Drum honored an audio programmatic service across all media categories, dramatically marking audio’s coming out into the automated buying community.
Scott Walker, SVP Programmatic Sales, Pandora
In light of all this, we wanted to speak with leaders of the Pandora/AdsWizz acquisition for a chat about how the combination will work, and about the growth and prospects of digital audio programmatic generally. We talked with Scott Walker, Pandora’s SVP of Programmatic Sales, and Alexis van de Wyer, CEO of AdsWizz.
The Rationale
A month before the acquisition was announced, Pandora started its own private programmatic offering for buyers of its radio commercials. That initiative represented an alternative strategy to Pandora’s impressive network of sales offices in a few dozen American radio markets. But buying AdsWizz has a bigger vision behind it than obtaining more evolved technology with years of development built in.
“Digital audio advertising is poised for massive growth,” Scott Walker asserted. “The future of advertising is digital — personalized, targeted, more transparent in terms of what you’re getting, reach, and quality compared to traditional TV and radio channels. Then there are fast-growing new channels, smart speakers and cars. We expect digital audio can be massive.”
For Alexis van de Wyer, the combination is a 1+1=3 equation. “We believe that by having our technology powered by the largest publisher, we have the entire ecosystem.”
AdsWizz Client Stability
AdsWizz provides technology to many audio services and ad sales companies. We wondered what might happen to that galaxy of business — part of what Pandora acquired, and part of the grand ecosystem Alexis van de Wyer talks about. In Pandora’s recent Q1 earnings call, CEO Roger Lynch said he expected some AdsWizz clients to drop out (which is typical when a business is acquired by a competitor of its clients). That presumption was explicitly refuted by the AdsWizz CEO: “All the publishers we work with are excited [by the acquisition] except one,” he told RAIN, without disclosing the unexcited client. “We believe that adding Pandora gives everyone an advantage and will result in more buying. Some clients did have concerns, which we addressed technically and legally.”
The idea here is that a larger ecosystem of programmatic providers, all rowing in the same direction, is like the proverbial rising tide lifting all boats.
Google Stepping In
The rising tide idea comes into play with Google’s new audio effort. We asked about competitive threat, and that idea was rebuffed. “It’s very good news,” said Alexis van de Wyer, noting that AdsWizz can be part of transactions that Google’s presence brings into digital audio, thanks to the many links in the programmatic chain of execution, some of which AdsWizz can supply.
Scott Walker agreed with this: “There are certain advertisers that exclusively use DoubleClick — it’s connected into other suite components. If we were not connected into DoubleClick from our supply-side platform, we would not have access to that ad buy. With Google in the game from the buy side, it allows advertiser to add audio to their mix.”
Both men promoted Google’s announcement as a sign programmatic audio’s emergence, and the expansion of the marketplace benefiting all audio publishers.
The Future
When asked to predict the state of digital audio programmatic three years out, Alexis van de Wyer said the majority of buys would be programmatic. He noted that the U.S. market is behind some other regions, noting that the U.K. is about 60% programmatic audio buys, and Australia has even higher adoption. Van de Wyer attributes U.S. sluggishness to the intertia inherent in such a large market.
Looking to the future, Scott Walker projected a more varied toolset: “There will be a diversification of different types of programmatic. Traditional real-time bidding is just a first iteration. There could be new capabilities around different cost methods and cost types and new buying interfaces.” He also predicted a proliferation of programmatic systems for small advertisers and businesses.