It’s not weird for an audio advertisement to talk to you, except when it’s asking for a response in return. That’s probably why the first time I heard one of XAPPmedia‘s new interactive audio ads, I actually missed the opportunity to respond–I didn’t realize it was talking to me personally.
The NPR One app–National Public Radio’s latest entry into the world of on-demand digital content–is one of the first to leverage XAPPmedia’s new form of audio advertising. Occasionally between segments, a short, but distinct, melody will indicate an advertisement followed by a standard pitch for a product. However, instead of just throwing information at the listener, the ad asks if they’d like to act on that ad by opting in to, say, download an app.
There are a number of different interactions available, which the publisher can configure. Options include downloading an app, a podcast, or making a phone call. All the interactions are prompted by the user’s voice, no need to look at or touch the mobile device.
XAPPmedia has already been inserting ads into the NPR One app, but it wasn’t until last week that the company announced it was providing the proprietary technology for these new types of audio ads.
As creepy as the mechanics of these ads may sound, the process is unobtrusive. Right now they are built into the format of existing ads spots, and if no response is given then nothing happens.
Once a prompt has been given to the listener, the speech interpreter is looking for those exact words. If the company’s Speech Cloud can’t identify the words because of a noisy environment, or the words don’t match, then it moves on with regularly scheduled programming.
“The solution has much higher voice recognition fidelity and a better user experience in part because it is only listening for a match to a specific phrase,” explains XAPPmedia cofounder and CEO Pat Higbie. “Think of it as a voice click that is configurable per ad.”
Voice click is an inevitable next step in the evolution of downloadable and streaming audio programming, since banner ads don’t work any better there than the rest of the Internet. XAPP can back that up with data, since they also serve on-screen ads that accompany the audio. “What we’ve found is that 78% of our ads and promos are served while the app is in the background–not visible on the screen,” says Higbie. “This is extremely interesting, considering how others have tried to monetize internet radio with companion banners which are largely ineffective.”
Spotify already announced that it will begin serving video ads to its audio listeners. And the terrestrial radio tactic of repeating a phone number multiple times feels archaic compared to a voice click–you’re probably listening to that ad on a device that makes phone calls, after all.
And the “podcast we think you’ll like” recommendations that you hear on This American Life or Planet Money, while more personal, still don’t take full advantage of the technology being used to listen to the program. As podcasts continue to rise in popularity, these audio ads could also find their way into that media format. It’s not happening at the moment, but as long as there’s an Internet connection at the time of the ad–which is likely to be a big stumbling block–the technology could support other methods of delivery beyond streaming.
Although NPR One is focused on handpicking and using human editors to curate a listening experience, XAPP ads are still fairly generic across listeners. The company is focused on connecting with listeners and providing a higher return for advertisers so it currently lets the publishers worry about the method for targeting gender, age, or interests.
The results for NPR One show some promise for monetizing audio more effectively. A Carbonite spot, for example, was able to generate 200 phone calls of interest, with a CPM (cost per thousand impressions) of $25; compared to just 23 phone calls of interest from Yellowpages.com with a CPM of $42. It’s still early, and how much this is a novelty effect versus a long-term trend remains to be seen.
The responsive and interactive audio ads fit in well with the talk radio style content, but it also has the opportunity to transform the music industry. Plenty of companies are playing it cool, but it’s really an all hands on deck situation trying to figure out the monetization of recorded music. It’s fair to say that the typical ugly banner ads make it hard to sustain that kind of advertising model and pay artists a respectable amount of money.
“Advertisers will pay all day long for return on investment,” says Higbie. “By increasing response rates, the limited inventory [three minutes of ads per hour] becomes more valuable.”
The amount of music streaming continues to rise, but paid downloads are rapidly dipping. Consumers still want to listen to music, either on-demand or in radio form–but they’re less interested in paying for recorded music–a distinction between paying to go to live shows and even for band merchandise. The ability to increase revenue might help services gain traction, if not make a lasting impact.