Two Years in, Programmatic Ad Sales for Digital Radio Growing at Steady Clip.

INSIDE RADIO

January 14, 2015

In the two years since Triton Digital’s a2x brought programmatic buying to digital audio, the amount of streaming inventory broadcast partners are handing over to the automated ad exchange has been growing steadily. As the concept of machine-based sales becomes less alien and more attractive to some radio companies, they’re releasing more inventory into the exchange. "It’s been growing at a nice, steady clip since we launched in January 2013," says Triton EVP of ad sales Mike Reznick. "It’s growing every single month with more inventory being made available to our advertisers and more advertisers coming in."

Programmatic enables delivery of "smarter" or more precisely targeted impressions which can lead to higher CPM rates for streamers. A2x has attracted such partners as Alpha Broadcasting, CBS Radio, Entercom, Greater Media, Wilks Broadcasting and Univision Radio. It’s a "transparent network," Reznick says, meaning the trading desks and agencies that use it are able to see what audio publishers are part of the exchange. Advertisers are drawn to it and other supply side platforms for the buying efficiency and ad targeting and retargeting capabilities they offer. A2x uses cookie synch and device IDs to target audiences. Those can include overlaying third party data that make the impression "more informed," Reznick says, thus improving chances of hitting the intended target. The platform can then retarget listeners based on actions they take on a specific ad during a set time frame — or on first party data provided by the broadcaster. "We’re bringing digital targeting and tracking to a traditional medium," Reznick says. "That helps more revenue come into our entire space." What is programmatic buying?

TV may be speeding radio toward programmatic selling. As broadcast radio gets more immersed in programmatic buying for its streaming inventory, one in every five dollars spent on local TV are being transacted electronically. Strata’s ePort electronic order delivery system for TV buyers and sellers had its biggest year ever in 2014, processing over $4 billion in new TV orders or about 20% of the local TV industry’s annual $20 billion in billings. More than 1,600 television stations received electronic orders during the year from over 350 agencies across the country, according to Strata. While ePort provides a "programmatic infrastructure,’" allowing a secure two-way, electronic connection between buyers and sellers, humans are still involved and there’s no real-time bidding. Still, it’s the beginning of machine-based sales making their way to a traditional medium. Television rep firms like Katz Media Group and local TV stations receive an agency’s original order all the way to their traffic system. They can also send make goods back to the buyer and receive revisions electronically. EPort’s $4 billion in 2014 was a 125% increase from the previous year. "In order for the TV industry to fully adopt programmatic practices, there must be a reliable, scalable infrastructure in place," Strata VP Mike McHugh says, pledging to roll out additional functionality this year.

Separately, ESPN has sold its first TV ad via a web-based auction. The 30-second ad for Turbo Tax which, ran at 1am last Saturday during "Sportscaster," wasn’t part of a standard commercial break. Instead it was displayed on a giant video screen on the signature show’s set, which is part of the network’s unique programmatic platform.