When WPP’s programmatic arm debuted Xaxis Audio last month, it did so with the intention that it would not be used in isolation.
“For us it’s another arrow in the quiver when you’re doing programmatic media planning,” said Nicolas Bidon, managing director of Xaxis in the UK. “This is a new way to reach audiences at scale and it should be considered as a complement to what advertisers are already doing, rather than a standalone product.”
As such, Xaxis Audio – created in partnership with UK digital audio exchange Dax and powered by Xaxis’ proprietary DMP Turbine – is bundled into Xaxis Brand Suite.
While Xaxis Audio is a UK-specific solution, several similar offerings have been released in recent months in the US.
Triton Digital launched its programmatic audio ad exchange in January through a partnership with eXelate. In April, iHeartMedia released a programmatic tool for broadcast radio advertising and WideOrbit unveiled a programmatic digital radio beta program. Last week, Marketron enabled programmatic buying for spot radio.
Compared to the UK, the US market is much bigger and more mature, Bidon said. Yet Xaxis UK has been looking at audio for some time. And now is the time to strike.
“We felt 24 months ago was that the volume of reach and quality of inventory were there yet,” he said. “That has dramatically changed. If you look at the progression of digital audio consumption in the UK in the last 24 months, minutes of listening has doubled. The tipping point we saw in the UK was that DAX was reaching critical scale.”
AdExchanger: How have your clients reacted to Xaxis Audio?
NICOLAS BIDON: The phase we’re in is to ensure the various agencies and advertisers we work with are aware of the product and the opportunities it offers their clients and their marketing objectives. We’re starting to build a strong pipeline but there are a lot of questions. We’re getting questions from agencies about our ability to programmatically insert audio ads into cars, which is not what the product is about in terms of the live component.
How much volume does Xaxis Audio manage?
I can’t share revenue projections, but it’s not a mainstream product yet. We’ve run quite a few campaigns already, but in terms of volume this is not a mature product. It’s for people who want to innovate with a new format. There’s an old saying in marketing that claims you should spend 80% of your marketing budget on proven methods, 15% on more innovative things and 5% on brand new ideas. At the moment, Xaxis Audio in the UK falls into that 5% category.
What metrics do you offer?
We focus only on audio formats because doing companion banner ads distracts from the true opportunity, which is the ability to have 100% of a user’s attention. From a usage perspective, audio consumption is increasingly on mobile and people are streaming from a device in their pocket. If you start measuring companion ad click-through rates, it’s not going to perform very well. We focus on newer metrics like listen-through rates, to measure how many people heard 100% of a message. We’re also incorporating more audience data, in terms of the composition of who listened to ads.
Is it easier to sell to digital buyers or broadcast clients?
It’s too early to say. We’re selling the product to both traditional digital buyers and to broadcast managers, and they have a very different set of questions.
From a digital buyer’s perspective, the biggest attraction is the format itself and its premium aspect, meaning not competing on the page with other content. The challenge for them is reach. The reach we have on the product is in the tens of millions, but that’s fairly small compared to more traditional formats.
From a broadcasting standpoint, the opportunity is to reach people that they traditionally don’t reach. That could be people that don’t listen to commercial radio, or don’t listen to radio at all but spend a lot of time on digital platforms. The challenge for them is to understand how digital audio is bought, how it’s measured and some of the newer targeting capabilities, which goes beyond what they’re used to on broadcast radio.
What are the opportunities for personalized targeting?
We have to be careful. If we were to personalize messages based on what we know about a user, it could potentially backfire. From a privacy angle, that would be concerning for users. What’s more interesting from a creative standpoint is the opportunity to integrate audio as part of a bigger solution, including video and other formats, and do sequential messaging. We could personalize the audio message depending on what people have done, which would be anonymous enough not to worry users but would deliver them better results from an advertising standpoint.
What are the remaining challenges to digital audio?
For more traditional advertisers, programmatic is still quite new. On top of that, if you add a new product or solution, there’s a lot of education and communication that needs to happen. The other challenge is around mobile. Digital audio is increasingly consumed on mobile, and this presents challenges for companies like Xaxis and others in programmatic. To leverage data across mobile, a lot of technology heavy lifting needs to happen in the background.
The challenge is how do we ensure that audio is used as part of a bigger suite of solutions? How do we take it out of the 5% and move it into the 85%?
