As a US-based consultancy, one of the questions we are most often asked by our overseas clients is “what’s going on these days with the radio industry in The United States?”  Most of our answers to this question tend to touch upon an innovation in programming or marketing that our clients here in the US may have adopted or how something like Periscope needs to become an integral part of your digital strategy; however, it’s not very often that we feel compelled to mention a new approach to sales as is this case currently in the US radio industry. 

So, in the event that you may have missed the buzz around programmatic buying, let’s start by a quick definition.  At its most basic level, programmatic buying is any type of media buying that’s conducted by machines and involves little to no human participation.  As has been the case with online advertising for some time, humans set the buying parameters.  When these parameters are met, media buys are initiated.  Up until fairly recently, online ads have been the sole focus of programmatic buys.  Now, increasingly media companies and agencies are exploring ways to sell “traditional” media this way, including television spots and other out-of-home advertising.

In particular and what makes this news interesting for the radio industry is that programmatic buying is now being applied to broadcast radio advertisements.  Just last month, iHeartMedia made news when it announced that it was creating a programmatic, real-time radio ad buying platform that offers broadcast ad buying on iHeart’s 850+ stations.  In conjunction with ad-tech company Jelli, iHeart’s new programmatic solution allows media buyers to serve targeted ads based on weather and traffic patterns, behavioral segmentation tied to a specific music genre, purchase behavior as well as other environmental, demographic, and consumer trends.

Here’s an example of how this all works…McDonald’s, one of the biggest spenders when it comes to radio advertising, would use programmatic buying to modify its existing copy so that it could serve ads on radio stations across areas of the east coast (where we are currently seeing unusually warm temperatures) that promote its McFlurry and other cold desserts and shakes.  As soon as these unseasonably warm temperatures have passed in this region, the ads would automatically shift back to the original ad copy.

From the perspective of advertisers, the real-time advantage with programmatic buying provides better ROI and offers a greater depth of analytics and insights on particular radio advertising campaigns.  From our perspective, leveraging these technological efficiencies to capitalize on “audience-based buying” is a big win for the future of the radio industry.