Advertising beyond walled gardens - Part 4: Audio with RMS

In our MMT guest interview with Elmar Stein we take a look at audio and especially at the exciting developments in digital audio.

For the third post in our series, we are exploring how advertisers can diversify their media buying outside of walled gardens. Today, we will look at audio solutions in partnership with RMS.

Elmar Stein, Head of Digital Sales at RMS, talks today about their audio solutions and the exciting new possibilities that digital audio offers.

Lauriane Tiard-Caillaud von MMT in interview with Elmar Stein from RMS:

Elmar, thanks, for taking the time, to talk with me about the exciting topic of digital audio. 

What are the key benefits of audio?

Every day, around 75 percent of Germans tune in to the radio. On average, advertisers come into contact with more than 20 million listeners per hour and around 53 million listeners per day with their radio advertising via FM alone. In addition, there are more than 50 million online audio listeners via digital channels. Last year, a lot happened in the audio sector, especially in digital audio. If we look at the user figures from 2015, we had just under 30 million listeners in Germany. In 2020, it was already over 50 million. This alone shows that the number of people who use audio, especially digital audio channels, has increased incredibly strongly. Radio, as a classic mass medium, still scores with a high reach, which is growing strongly in the area of digital audio. 

With radio, transparent and comprehensive campaign reporting is possible. Thanks to modern targeting solutions, radio advertising can be specifically targeted, thus reducing wastage. Digital audio offers the possibility of precise targeting, which is not possible in classic channels, such as FM. In addition, different target groups can be addressed here. This makes digital audio a very exciting, great channel for advertisers, which offers many possibilities that audio has not yet had in the classic area. 

In a nutshell, Audio (Radio + Digital audio products) has an excellent reach-building solution outside of WG, almost to TV levels.

How do you measure the success of audio campaigns?

With classic audio, I have a survey twice a year where I look at:

• What are the listener numbers?
• What is the character of the station? Is it more male or female?
• Are the listeners more likely to be older or younger?
• Do the listeners have certain affinities?

As is customary in traditional planning, media planners can then target roughly according to this. 

My experience with classic Audio is the strong build-in into habits: when someone listens to the news on one channel or a particular show, it is difficult to make them change for another. Which leads to stable audiences between two periods. That is why it offers a good companion for brand building.

For online audio, we have developed the world's first digital audio DMP. It has been available on the market since 2018. Developing our own solution was necessary because the normal DMPs are all based on cookie inventory. It's a little different in the audio space. Here we have many different devices that basically don't use a cookie. As advertisers are used to in the display or video space, our solution allows us to identify and address each user exactly. For example, people interested in travel, those who want to buy a car, or young people who like to listen to podcasts. To do this, we use our own first-party data that we get through the broadcasters, ad server information but also the data from Emetriq. All the data we use is 100% transparent via whitelisting and validated by ePrivacy.

We identify the user by the listener’s ID. This is an interaction of cookies, if cookies are present, but also of the player that is used and of the IP address, listening behavior, etc. This results in matching to the individual user and we can then provide these users with various attributes. Using first-party data from the broadcasters, the ad server information, and the information from Emetriq, we then get a very accurate picture of the user. We can then precisely address socio-demographics, interests, purchase intentions, etc. All of this, of course, in accordance with data protection. An example would be a user in the 30-40 age cluster, male, living in the Hamburg region, who is interested in cars. Targeting is possible in such a granular way, but not in-depth so that no conclusions can be drawn about the individual.

Thanks for bringing up a concrete targeting example here, I believe this is helpful. It still offers a powerful affinity and contextual opportunity as I understand it!

What other advantages does digital audio offer, especially if we compare it directly with walled garden platforms?

Audio as a whole has one big advantage - 100% attention. I can only listen to one thing. If I think of it in comparison with, say, display, here I am browsing a website with a banner flashing here, font and image there. But when I listen to something, whether it's an audio stream or a podcast, I can only do that on one channel. In that respect, as a listener, I have a much stronger attention to it there. And what I'm noticing more and more now is that people are grateful when they don't have to look at a screen, don't have a device in front of their eyes. As a listener, I can simply lie back and say: I don't need a screen right now. 

Also, an active lifestyle brings in the necessity to achieve a list of chores that will preserve some quality time. Without lying back, one can listen and learn while grocery shopping or cooking dinner. That was the case also outside of Germany!

The current trend of actively taking time out from the screen certainly benefits this, doesn't it?

Yes, if you look at how much time is spent in front of the smartphone during the week alone, it's quite frightening. And the cell phone is not the only screen: There are also laptops, tablets, and televisions. So people occasionally want to actively withdraw from them.

Unlike some walled gardens in social media, we don't have any problems with problematic environments. I always like to use the example of fake news. As an advertiser, I don't want to place my ads in this environment. Such a problem simply doesn't exist in the online audio sector. For one thing, audio has a completely different way of communicating, and that's a very important asset for us here. Radio listeners have a special bond with their favorite station: they trust it. This trust also has a positive effect on advertising perception. In addition, the data that is collected is all stored in Germany in accordance with German law. We have a very high level of data security.

I think those are two big advantages of audio.

The control over the quality of radio content is clearly different from social media as a broadcaster chooses and is held responsible for its content. This is a definite advantage of traditional media.

What requirements are necessary to use the audio channel as an advertiser?

Ideally a radio spot ;) If the advertiser doesn't have a spot, we can produce it easily and quickly. When I started at RMS, I was told that the radio spot doesn't even cost the catering of a TV spot production. The production is really much faster and cheaper in comparison. It starts at about 1,000€. Sure, if I need a well-known voice actor, the buyouts are higher. But usually, the cost is no longer a hurdle.

A lot has also happened with regard to the dynamization of audio spots. In dynamic podcasting, for example, there are many ways to play out the audio spot in real-time, so that every listener gets a different spot that suits them. 

And the audio signatures! With the repetition levels of radio, the reminiscence of a radio spot which is an audio signature is even more performant. This can be worth a lot for little investment vs TV spots. Although Social media channels have offered opportunities to create a more cost-efficient Video format, far from advertising standards.

What goals can advertisers achieve with audio?

This varies greatly and depends on the product, service, and target group. Advertisers can clearly optimize for net reach or listening rates. I think that's also a big asset that many people aren't aware of with audio. For us, a spot only counts as heard if it is listened to for at least 5 seconds. If it's only 3 or 4 seconds, for example, the impression is not counted at all. That's a long time when I compare it with many standards in the video and display sector where, for example, a banner has to be displayed for 50% of a second in the visible area to count as an impression. For me, the question is, has the user really noticed the banner? But if I hear a spot for at least 5 seconds, then I think I have a different relationship to it. Therefore, the listening rate is important for many advertisers. 

So awareness campaigns can be achieved with super-efficient costing if your first 4” are well used.

Yes. When it comes to changing brand perception, classic surveys are used. Online or in the studio, in a panel. But there are also completely new approaches to conducting surveys via smart speakers. If a user has had contact with the brand, he or she can take part in a survey directly via the smart speaker. This means that results are available very quickly. This method is still in its infancy, but we have already carried it out successfully a few times. I see great potential here. People are curious and relaxed when they try something for the first time. That's a big advantage. 

I am really curious about Audio CTA and audio-enabled websites/campaign solutions. That sounds like the “next big thing” to me!

Yes, there are formats where we have a combination of an audio spot with a display format, which is then called prescreen and companion banner. Advertisers can optimize for a CTR here. The format works very well with an average click-through rate of 1.52%. The format is especially exciting for customers who come from the e-commerce sector, who want to draw a lot of traffic to their website or generate leads, for example. 

Can you explain this exciting format a little bit more?

For example, if I was a listener open TuneIn on my phone and press play, the audio spot of an advertiser would play at the beginning and an ad would be shown on the display in sync with it. We at RMS use the format only at the start because only then it can be guaranteed that it is seen. Within a radio or podcast program, the click rates are way lower, because then it is not guaranteed that the banner is seen. Especially for e-commerce clients who want to link to a landing page, this ad format can work very well.

Sounds exciting really, I would be curious about the engagement rate post click on these types of activities! Maybe your next study?

You say that different target groups can be addressed. Which target groups can you reach with digital audio, especially compared to classic audio? Does audio have its own target group? Is it possible to reach target groups via audio that I can't reach via walled gardens? How can audio enrich advertisers' media mix? 

We currently have 1 billion impressions a month in audio. In podcasts, we're at 50 million, which is still manageable, but we started last year with 2 million a month. You can see that a lot is happening in this area and that we are seeing high growth rates. Also due to Corona, quite clearly. 

It is true that the Home Office and new life routines have brought a lot of people back to audio and radio at home where radio was an “on-the-go” media, not only for music but for news, learning, new horizons, and shared perspectives as well. That was the case also outside of Germany!

Due to the new GDPR and TCF 2.0 regulations, it is still not easy to identify individual users across different channels.

But we can only target, for example, smart speakers or podcast listeners, or people who don't watch linear TV anymore. If TV is an advertiser's lead medium, but they are no longer reaching their entire audience with it, audio is a very good complement. It depends a bit on the target audience, but there are indeed many opportunities where audio can either complement well or fill a gap, for example with target audiences you can't reach through social media channels.

Digital media can be very well connected. In an open programmatic world, I can track the user across Digital OOH, Advanced TV, Display, and Digital Audio. That's where the first good approaches are. Of course, this is difficult for walled gardens because they are self-contained.

You are a very good advocate for audio, Elmar. The current time seems already very exciting for this channel. Where do you see the journey in the audio sector going? Can you give us an outlook?

I definitely believe that podcasts will continue to increase in relevance. Especially through Corona, podcast use and streaming services have once again gained significantly more users. I also believe that the topic of interaction via speech will become even more important. Speech always gains in importance when users can do something faster and more conveniently with speech than when they have to type something in. That's an exciting topic area.

Elmar, thank you very much for your time and the exciting conversation about digital audio. We are looking forward to working with you and your team at RMS.

MMT offers a publisher management solution that helps agencies and advertisers to keep track of the best offers from their preferred business partners. Always highlighted in the planning sessions, these offers can be automatically selected, inventory requested, and booked in a few clicks. Mercury allows us to link with external measurement and invoicing systems to reconcile billing when the campaign ends.

We hope you enjoyed the interview with Elmar Stein from RMS and that you were able to take away useful information for you and your company. To discuss your individual challenges and how you can scale outside the walled gardens with our leading media management platform MMT Mercury, I am available for a personal meeting.

Sources:

• https://www.radioworld.com/news-and-business/business-and-law/2020-is-the-year-that-radio-hits-a-proverbial-iceberg-survey-says
• https://www.strategicmediainc.com/newsroom/streaming-radio-listenership-surged-in-2020/
• https://rms.de/portfolio/buchungsoptionen/buchungsoptionen_oa/audio-dmp