New Targeting Capabilities Enhancing the Value of Digital and Broadcast Radio

Today’s blog is brought to you by: Scott Bender, Global Head of Publisher Strategy and Business Development, Prohaska Consulting

Much continues to be written about the growth of digital audio. By 2017, Digital Radio listenership will grow to 57.8% of the population, according to a recent study by eMarketer. Digital advertising dollars are steadily following and are projected to grow 24% next year.

With the growth of digital, new technologies are emerging. International Data Corporation (IDC), an American market research, analysis and advisory firm, reported that by 2020 roughly one of every five radio dollars, or about $4 billion, will be booked programmatically. The whitepaper prepared last year for the RAB by Prohaska Consulting defined programmatic as follows:
“Programmatic buying is the process of executing media buys in an automated fashion through digital platforms such as exchanges, trading desks, and demand-side platforms (DSPs). This is an alternative to the traditional use of manual RFPs, negotiations and insertion orders to purchase digital and other platforms.”*

For both digital audio — and digital overall — the ability to target the individual user has increased significantly in the last two years. Through app logins and other first-party registration data, along with overall radio usage habits, stations will have a much better ability to understand and quantify WHO their audience is, WHERE they are listening, and WHY they are listening.

More than just insight, such audience data points are enhancing the value proposition of digital inventory, including audio. Digital buyers are now buying audiences against greatly enhanced user profiles — well beyond the usual general demos and station format criteria —via programmatic channels. These new data sets enhance the value of digital radio (audio) and provide an opportunity for stations to further optimize their inventory, while giving marketers an obvious advantage to target prospects and hit KPIs. This data will also give advertisers and their agency partners greater insights into radio’s listening audience, providing them with the ability to reach and personalize the ad message to a specific target.

As is becoming the case for both print and broadcast, inventory is monetized against specific audience sets, in addition to content or format. Through the use of data management platforms (DMPs) to capture proprietary (or first-party) data along with incorporating third-party sources that can match other attributes about a user, stations are gaining the ability to sell both the power of their format and further quantify the value of their audience. It’s not just about the engagement of News/Talk, the environment of Live Sports, and the passion of die-hard Rock fans, etc. It’s now also about layering on top of that information about whether someone is an auto intender or has been checking out pricing for a home refinancing, along with other relevant data points that provide context, including geo-location.

What does this mean for broadcast radio?

While the vast majority of radio revenue will continue to come through broadcast channels for the foreseeable future, programmatic will play an increasing role in automating the transaction process. Even in advance of this shift, the insight stations can garner about their audiences through their digital channels will also help broadcast sales teams to become true marketing partners. While we are not yet to the point of directly targeting against this data on a broadcast level, stations have at their disposal a new direct source to illustrate the power of their audience and the unique connection radio already has with that audience to drive awareness, build brands and drive sales.

I look forward to discussing these topics and others regarding the bright future of radio during our session “Programmatic Unlocked” at the Radio Show, produced by the RAB and NAB, next week in Nashville.

*IAB (Interactive Advertising Bureau) definition adapted for relevance to the radio industry.