Introduction to Dynamic Ad Insertion (DAI)

Dynamic Ad Insertion, often called programmatic advertising or programmatic media buying, is the practice of using 1st or 3rd party data to serve ads to a specific audience or targeting criteria. These ads are not placed on a “fixed position” basis and can appear in any inventory that meets the campaign criteria.  This method of buying ads enables brands to efficiently buy a wide array of inventory that will expose their target audience to their ad creative.

Dynamic Ad Insertion on Podcasts - How it Works

Dynamic Ad Insertion on Podcasts follows the same overall buying principles as broader programmatic advertising but the inventory resides within podcast episodes that have enabled this type of ad placement.  These ads are not live read by the hosts but are pre-produced creative that does not have to be show specific.  For example, a brand can create multiple versions of pre-recorded audio ads that can be served to specific audiences in any podcast inventory that meets their targeting criteria.  

Baked-in Ads vs Dynamic Podcast Ads

In the debate between which is better - host live read ads that are baked-in to the show or pre-produced (host read or voiced over) ads that are bought programmatically– Ad Results Media believes they are both critical components within your overall media mix.  They work to augment one another’s inherent strengths and deliver even greater results when run in tandem.

For the advocates of host live read ads, they tout the incredible persuasive power of personality-driven media and the trust that podcast listeners have in the hosts they listen to. We know this to be absolutely true. In fact, according to the Super Listeners 2020 research study, 45% of podcast listeners say they believe that the podcast hosts that they regularly listen to actually use the products they mention during their shows.*

According to Morning Consult, “Highly sought after across the podcast industry, host-read ads are seen as a more intimate way for brands to connect with listeners through a program’s hosts as opposed to pre-produced ads”**.

However, team programmatic believes the ease, buying efficiency and targeting capabilities that placing ads programmatically offers outweighs some of the benefits that personal endorsements deliver through host-read ads.  With the industry moving largely toward both audience-based planning and buying, running programmatic podcast ads offers a more turn-key way to reach a brand’s target audience through audio.

Benefits of Using Dynamic Ad Insertion on Podcasts 

Programmatic podcast ads help brands win with contextual relevance and efficiency; a balance that is often hard to achieve with other mediums. 

According to Ad Results Media’s VP of Media, Gretchen Smith, “Securing actual contextual relevance through digital programmatic ads can be challenging.  While some of the challenges can be addressed using DCO, I believe that it still falls short of the contextual alignment we can achieve through programmatic podcast ads. The organic nature of the conversations that occur on podcasts are the perfect environments to authentically insert topical ads or products”.

Some other benefits of using DAI on podcasts is that the ads are not permanently embedded in the podcast audio file, the listening experience can be different for each individual listener and the time period when the ads run. For example, brands that want to use DAI for seasonal promotions are able to serve their ads during the relevant promotional period only.  Once the promotion is over, that inventory can be sold to different advertisers regardless of when the original podcast was first released.  This is a critical benefit because a large portion of podcast listeners will go back and listen to previous episodes they may have missed.

Challenges of Using Dynamic Ad Insertion on Podcasts

One of the notable challenges associated with using Dynamic Ad Insertion on Podcasts is that the brand or product endorsement from the host is often what makes podcast advertising so desirable. Live Read or Baked-in ads are read live by the host during the show and often discussed with the guests.  This natural and spontaneous conversation about the advertiser within the context of the show is an extremely effective tool in driving consideration or conversion.  When using DAI, the ads are pre-recorded and do not carry the same level of authenticity.

Podcast Dynamic Ad Insertion - Best Practices

Custom Creatives By Audience Segment

Maximize the potential of your podcast ad campaign by producing custom creatives for each of your segments.  Create multiple scripts that incorporate key consumer insights from each of your targets.

Timely Messages with DAI, Evergreen with Baked-in

Use the impermanent nature of DAI to your advantage and produce timely, seasonal or geo-targeted ads.

Measure, Optimize, Repeat

DAI gives advertisers greater control of key campaign testing variables and deeper performance data on each ad. Learn from in-market performance and optimize for greater efficiency.

Upcoming Trends and Technology in Dynamic Ad Insertion

AI Transcription Targeting

We see a huge opportunity to use Artificial Intelligence or Machine Learning to expand DAI targeting options to include transcription targeting.  This will give advertisers the ability to not only place their ads against their audience targeting criteria but also specific show content.

Significant Category Growth

eMarketer predicts that total programmatic podcast spend will reach $106M by 2022, which is more than a 300% increase from 2020 and this is also a 100% increase in the overall share of the total podcast ad spending

Increased M&A and Consolidation

There is an  ad tech arms race currently transpiring between the large players in the space like iHeart, Spotify and SiriusXM.  Each of the giants are making strategic acquisitions to make their programmatic offering easier, more scalable and more measurable.

Greater Creative Interactivity

There are specialty providers developing solutions to enable greater engagement or interactivity potential with audio ads.  The specific types of engagements can include: voice interactivity, personalization and mobile phone engagement.

Conclusion

With all of the players in the programmatic podcast advertising space, both large and small, really focusing on attracting more advertisers and up leveling their offering; we are excited by the opportunities this momentum will unlock in 2022.  Interested in learning how to incorporate DAI into your audio advertising strategy? Let’s talk.