Google is aiming to dominate ad buying on Spotify and Pandora as it seeks a bigger piece of the $2.7 billion digital audio market

Google is aiming to dominate ad buying on Spotify and Pandora as it seeks a bigger piece of the $2.7 billion digital audio market

August 7, 2020
  • Google is adding more inventory for streaming audio to its programmatic ad platform as it seeks to sell a bigger share of ads on Spotify, Pandora, and iHeartMedia.
  • It also just built a new feature that helps marketers create audio placements from scratch, which could help it win share with small advertisers.
  • Google sees a chance to get a bigger piece of digital audio advertising, which accounted for an estimated $2.7 billion in 2019.
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Google is trying to get a bigger piece of the streaming music ad pie.

Google has been building an audio advertising business by inking deals with music streaming apps including Spotify, Pandora, and iHeartMusic to help advertisers buy ads programmatically on those apps.

Now, it's adding audio-specific tools to Google Ad Manager, the huge platform that both publishers use to sell ads on websites and apps.

Google also added an audio-specific marketplace to Display & Video 360, its platform for advertisers to buy ads. Advertisers can buy ads from Spotify, Pandora, AdsWizz, iHeartMedia, and Triton Digital, and Google plans to add brand lift, which tracks metrics like brand perception, awareness and purchase intent, for audio ads later this year, similar to what it does for YouTube campaigns.

Finally, Google created a tool called Audio Mixer to make it easier to create audio ads that can run across multiple platforms.

Programmatic audio advertising is small but growing as radio ad dollars shift to streaming music. According to the Interactive Advertising Bureau, digital audio advertising accounted for $2.7 billion in 2019, up from $2.3 billion in 2018. To compare, research firm BIA Advisory Services estimates that the radio industry will make $12.6 billion from advertising this year.

Google rivals a handful of adtech firms like The Trade Desk, AT&T's Xandr, Verizon, and Adobe also sell audio ads from Spotify and others to advertisers.

The tech giant wants to become a bigger part of audio advertising

The new Google tools enable publishers like TuneIn and Spotify to manage their ad inventory and set up deals like programmatic guaranteed deals and private marketplaces. Publishers also use Google's tools to make direct deals with advertisers.

Google also said that is also running a pilot program with podcast advertising in the US and Canada, which the IAB estimates is a $1 billion market.

Stephen Smyk, SVP of podcast and influencer marketing at ad agency Veritone One, said Google's pitch focuses on streaming ads that has the ability to be automated, while podcast advertising tends to be more customized.

"These are the traditional 30- or 60-second [ad] that is slammed into content, and in most instances there's no clean segway like we've experienced with podcasting," he said. "I think Google and others will continue to find new ways to generate programmatic inventory in spoken-word content like podcasts."

Google sees big opportunity to win over small businesses through audio ads

Veritone One's Smyk said Audio Mixer could help Google win over small businesses that lack the resources to create audio ads.

"Google is always about enabling the very small businesses and a small business does not have an agency or support from copywriters and production people — I think that's huge for them."

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