Media Buying Briefing: Innovations in audio investment and activation may rejuvenate a moribund sector

A new ruling by the Federal Communications Commission at the end of 2024, which went into effect on Jan. 13 of this year, lets radio broadcasters break up market-wide signals into multiple zones, media agencies can now hyper-localize messages, particularly in hyphenated DMAs (think Albany/Schenectady/Troy, NY, for example). It’s called geotargeting or zone casting. 

“If you look at the name of a DMA and you see a lot of hyphens, you know that that DMA is actually a collection of smaller trading areas,” explained Pierre Bouvard, chief insights officer at Cumulus Media/Westwood One — who is an unofficial ambassador for the entire audio industry. “Like Wilkes Barre-hyphen-Scranton, Pennsylvania. You know, there are Scranton retailers, and they’re Wilkes-Barre retailers, and there’s a mountain range in between them. For the first time now, radio can say, ‘Hey, Wilkes-Barre retailers, we can have an ad that just goes to you, and while that ad is running, we can run one for the guys over the mountain in Scranton.’”

So the potential is there. But speaking of mountains, there’s a revenue one to climb. According to an eMarketer report out last week, total audio ad spend topped out at $17.61 billion, which is expected to grow to $17.88 billion in 2025 and $18.42 by 2028. Of that total, digital audio made up $7.12 billion in ’24 but will represent $8.74 billion by ’28, when radio will shrink to $9.68 billion.

Might geotargeting make a difference? In late 2021, a first test on the tech was run in the San Jose, Calif., market — reportedly by Dentsu’s Carat agency for client Jack in the Box. The agency declined to comment on the record for this story. 

Chris Devine, founder and CEO of GeoBroadcast Solutions, which is building the tech that enables stations to split their market-wide signals into zones (much like a cable interconnect can let TV buyers invest in portions of a market), said the test was successful. And now the company is rolling out the tech in at least 10 markets this year, with a focus on helping stations attract more small advertisers that haven’t been able to afford buying local radio because of cost and waste. He said he’s also trying to bring this to minority-owned broadcasters to help them bump their ad-revenue potential.

“If you’re living in New Jersey, wouldn’t you rather hear a traffic report about the Garden State Parkway than the Long Island Expressway?” asked Devine, who said the company’s plans to build out geotargeting abilities in markets where it’s relevant will take about three years. “I try not to cloud my vision with too much optimism, but [geotargeting] is a platform that can change the economic dynamics of the radio business.”

The tech “has the opportunity to bring in new advertisers that didn’t have large budgets —small advertisers who couldn’t afford to buy the DMA,” said the head of audio investment at a major media agency network, who spoke on condition of anonymity. “And obviously, targeting is very important, because you’re really reaching the people that matter most.”

Auto dealers and regional dealerships, quick-serve restaurants, local retailers and even political advertisers stand to benefit from the tech, said the investment exec, who added that conversion will be a key KPI for any advertiser that leverages geotargeting. 

Hand in hand with geotargeting is the advance of both dynamic ad insertion into audio, as well as dynamic creative optimization, which together enable the hyper localized messaging. Or even messaging that incorporates sports scores into ads as a means of attracting more attention.

How can the tech appeal to national advertisers? Pete Jimison, CEO and founder of an audio ad-tech company called Frequency, is working across the audio space, including podcasts. Frequency recently ran a test campaign in Australia with McDonalds, in which dynamic creative tech was used to insert sports scores into the QSR chain’s ads. The effort resulted in a 38% boost in ad recall over industry benchmarks

“We’ve had a lot of innovation that has come out of our work in Australia,” said Jimison who added that Frequency offers a SaaS solution that automates all elements of audio advertising. “That region is much more innovative — it’s like a test bed for us, because it’s a smaller market. The broadcasters down there can move quickly. And so we found there’s a lot of success that we can then bring to the U.S. market.”

As for streaming audio, the dynamic ad insertion (DAI) and dynamic creative tech is bringing about an opportunity to harness large audiences, explained Harry Browne, vp of TV, audio and display innovation at Tinuiti.

“The amount of time that people spend with podcasts, with streaming music, terrestrial radio as well satellite radio is enormous,” said Browne. “So it’s really important to us to have a role to play in that ecosystem. It’s not that DAI is a fundamentally different ad experience for the audience — it should be just as effective as a baked in podcast ad. The key difference is measurability and targeting and that unlocks an entirely new way for advertisers to make use of of the of the channel.”

Spotify is going one step farther beyond just podcasting by incorporating more video into its streaming offerings, said Chloe Wix, global director of product and commercial growth at Spotify. But there’s still a need to focus on giving advertisers and their agencies what they need to consider the medium side-by-side with other digital options.

“When it comes to the digital ad landscape, advertisers have a strong expectation for the ability to have confirmed delivery, first and foremost,” said Wix. “Secondly, advanced audience targeting capabilities —beyond baseline demo targeting. And No. 3, also the ability to measure and get insights that are apples to apples with other streaming opportunities. All those things I just listed are available when that podcast ad is streamed through streaming ad insertion.” 

Color by numbers

Tinuiti last week issued its Digital Ads Benchmark Report for fourth quarter of 2024, which looks at ad trends across the major digital platforms. Among the highlights: 

• Perhaps the most impressive stat comes from Amazon. In Q4, Prime Video ad spend grew by 8x over Q1 2024. Prime Video spend helped to drive investment in the Amazon demand-side platform (DSP) up 36% year over year in Q4.
• Ad spend across Meta properties rose 15% YOY in Q4, up from 9% growth in Q3, marking a strong recovery. CPM rose 5% YOY, after having dropped 3% in Q3.
• Share of YouTube investment going to TV screens jumped from 26% in Q4 2023 to 39% in Q4 2024, as users increasingly view YouTube videos via connected TV.

Takeoff & landing

• Publicis Media U.S. bought digital marketing agency Dysrupt, which specializes in performance-driven paid media, creative and measurement. Terms were not disclosed.
• Omnicom landed B2B insurance firm Zurich’s consolidated global media after a short review. The lion’s share of the work will be in EMEA and APAC. 
• Havas renewed a five-year deal with marketing intelligence firm Funnel to provide data organization tools, part of a financial commitment by the holding company to improve its tech and data stacks. 
• Out-of-home media agency Talon acquired Dutch OOH specialist shop Out of Home Masters, strengthening the company’s European reach.  
• Personnel moves: IPG lost a longtime media executive in John Moore, who last week said he plans to step down from his post as global CEO of Mediahub after 28 years there … Dentsu hired Jeffrey Bustos as its new svp of retail media analytics, coming over from the IAB, where he had been a leader in understanding the exploding retail media network marketplace.

Direct quote

“The overwhelming consensus among senior marketers is that gen AI is going to revolutionize the industry. But reality today is that many companies don’t feel ready yet. We see that leading organizations are making the shift from using gen AI predominantly for efficiency reasons to now also drive effectiveness. Implementation isn’t straightforward: ethical use, training and data quality all need to be addressed.”

— Thomas von der Fuhr, consulting senior director at Kantar, talking about FOMO and generative AI.

Speed reading

• I covered GroupM’s recent leadership moves that resulted in eliminating global CEO positions for its agency brands Mindshare, Wavemaker and EssenceMediacom.  
• Sam Bradley looked into the strategy behind Havas Media Network’s acquisition of Play last week — apparently the first of 10 acquisitions the newly divested agency network plans to make. 
• If you’ve heard the term AI agents or agentic AI, but aren’t quite sure what it means, Marty Swant has you covered with a WTF installment on AI agents.