The Rise of Programmatic Audio

It wasn't long. In the shadow of Spotify's rapidly scaling programmatic audio offering, it was only a matter of time before Pandora followed suit. Recently, Pandora announced its own foray into the emerging world of programmatic audio.

What is Programmatic Audio?

Programmatic ad buying is the use of automated software to purchase digital advertising, as opposed to the traditional process that involves RFPs, in-person negotiations and manual insertion orders. In other words, using machines to buy ads.

Programmatic audio is the same concept applied to digital audio inventory -- the ad space available between songs and playlists on streaming or digital radio services. Digital audio inventory is increasingly available for programmatic purchase on open and private ad exchanges.

Starting in 2013, companies like iHeartRadio, Triton Digital, and Spotify began to roll out their own respective private marketplaces allowing their customers to purchase ads that would syndicate within their platforms. Meanwhile, a2x and DAX (Digital Audio Exchange) emerged as open exchanges for digital audio inventory.

Pandora's push into this space, as one of the world's most popular streaming music services, makes perfect sense given the growing competition in this space.

Still Early Days

While programmatic audio ad inventory seem to be growing in popularity on the supply-side, the space is not without it's challenges on the demand-side.

Earlier this year Alison Weissbrot of AdExchanger wrote, "While audio pubs view their inventory as premium, advertisers don’t prioritize it in their marketing mix...there might not be enough advertiser demand right now to support audio inventory, if it were available in an open exchange."

It'll be interesting to see where things go, but it certainly can't hurt the prospects of programmatic audio inventory to see another major platform like Pandora enter the mix.