Bill Consolidation in digital audio: now and after

In this feature article, ExchangeWire examines investments in the digital audio space over the past nine months, how programming is fueling funding initiatives, and the effect of consolidation on the industry.

The consolidation of digital audio is booming. At the start of the fourth quarter of 2021, ExchangeWire followed US $ 10.84 billion (£ 7.97 billion) of investments in companies offering Bill Consolidation digital audio products. This is balanced between pure-play audio companies, such as Triton Digital, Tidal, Art19 and 99% Invisible, and companies offering audio as part of a larger product suite, such as Nielsen Holdings and Verizon Media. This level of funding split between specialists and generalists is indicative of the maturing of the audio industry, with many companies recognizing the benefits of owning audio assets. By a crude comparison measure, the digital out-of-home (DOOH) ’emerging channel’ audio colleague only raked in just US $ 574.5 million (£ 422.9 million) in the same period , although both have been heavily affected by the coronavirus pandemic Bill Consolidation"}” data-sheets-userformat=”{"2":8705,"3":{"1":0},"12":0,"16":10}”>Bill Consolidation

The benefits of programmatic were cited by Tilly Sheppard, Product Manager, Xaxis, as fueling this investment activity. Sheppard writes: “The concern at the start of the pandemic that there would be a drop in consumption by audio users has not been confirmed. In fact, the growth in podcast listening in particular proves that users have continued to enjoy the high quality screenless entertainment that digital audio provides. Combined with the growth in programmatic capabilities in podcasts, this user demand has attracted a large number of brands to the channel over the past year or so.

“Programmatic has opened up exciting new ways to make digital audio ads relevant to users. Creation can be dynamically personalized using behavioral data; site; age; kind; time of the day; and the weather, to ensure that ads really capture users’ attention and build brand awareness.

“These superior capabilities open up opportunities to combine audio with other formats, such as video, with the same data points used to deliver consistent personalization and increase the relevance and effectiveness of a campaign. We’re also seeing how audio personalization can work in the fast-growing field of voice-enabled devices, with advertisements tailored to both the device and what the user is interested in.

A worrying caveat to the promise of audio is the relative ease with which large antitrust-screened tech companies, such as Apple and Amazon, have been able to take hold of audio companies without even a hiccup. Apple’s recent purchase of the classical music platform Primephonic, which was later scrapped with vague promises to relaunch next year, hardly means that it is overly concerned about regulatory forces.

Financing of digital audio

Content is king – not everyone wears a crown

While the fervent state of broad mergers and acquisitions and public procurement cannot be ignored, the groundwork for this year’s increase in audio investment has been laid by a steady stream of acquisitions, especially in the area of ​​audio. podcasting, before 2021. Examples from recent years include:

  • Gimlet Media (Spotify) – US $ 200 million (£ 147 million)
  • Anchor (Spotify) – US $ 140 million (£ 103 million)
  • Megaphone (Spotify) – US $ 235 million (£ 173 million)
  • Stitcher (SiriusXM) – US $ 325 million (£ 239 million)
  • Pocket Casts (automatic) – undisclosed
  • Podnods (Depthsounder) – undisclosed
  • Wondery (Amazon) – US $ 300 million (£ 221 million)

Other purchases in the space have moved away from business acquisitions towards content-driven growth, with growing multi-million dollar license deals. The big players dominated here again. A prime example includes Spotify which picked up The Ringer from Bill Simmons for up to € 180million (£ 154million), while securing a license deal for US $ 100million (£ 73.6million). sterling) for The Joe Rogan Experience.

Chirs Shuptrine, VP Marketing at Kevel, believes this level of consolidation could hurt the prospects for podcast advertising in the long run, writing, “There is no denying that podcasting has grown in popularity. And innovation in advertising technology invariably follows audience shifts. Having said that, I think podcast advertising is a very different beast from traditional digital advertising and the space will be dominated by a few gamers, compared to the thriving swathe of display providers.

“On the one hand, the creativity of ad units is limited. Along with the display you have of course standard programmatic banners, but also skin ads, native ads, rich media, sponsored listings, and more, each with its own set of facilitators. With podcasts, you have pre-recorded messages (whether read by the sponsor or the host) and… an audio advertisement. Is there a lot of room for technological differentiation here?

“Second, podcasting is not as open as the Internet; a few platforms have a monopoly on distribution, and we can expect consolidation and a walled advertising garden approach. This further limits the space for ad technology providers.

“Finally, the audio targeting leaves a lot to be desired. Although you are given an IP address (allowing some data augmentation), this is an imperfect approach. And are the genre, content, and episode names complex enough to justify the growth of many competing DSPs / SSPs? I think there will still be a lot of innovation here, but the podcasting ad technology is unlikely to be fertile ground for new vendors, and I expect a few gamers to own the space.


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