iHeartRadio Aims to Streamline Ad Buying With Programmatic Radio

Partners with Jelli to automate the process

Jelli's new platform could help iHeartRadio rapidly ramp up programmatic advertising. Animation: Dianna McDougall; Source: Getty Images

Radio advertising, one of the oldest forms of mass media, is catching up with the data-heavy industry, as ads through the crystal set boxes begin to be bought and sold programmatically.

Jelli, an ad platform for radio advertisers, is launching a programmatic platform that promises to cut the time it takes to buy radio ads across the country from weeks to a few minutes. The San Mateo, California-based company's cloud-based SpotPlan for Advertisers will also allow marketers to target audience segments in ways more similar to programmatic digital and programmatic TV.

The announcement is part of a yearlong endeavor to build out the programmatic capabilities for radio advertisers, wiring nearly 1,300 stations to the platform since it was initially announced last year. While some radio stations in the network already begun selling the programmatic ads, Jelli CEO Mike Dougherty said the demand-side platform should make advertising as easy as buying ads for social media and search.

"Jelli's mission is to make buying radio ads as easy as it is to buy a Facebook ad online," Dougherty told Adweek.

As a part of the partnership, iHeartRadio is making its entire advertising inventory available for programmatic buying.

In an interview, iHeartMedia CEO Bob Pittman said radio audiences consume the media in the same way they do digital. Jelli's new interface provides iHeartRadio a way to make traditional radio feel more like a modern format.

"The landscape is changing," Pittman said. "Radio is taking on a new importance to people, but the buying and selling of it doesn't match the way advertisers want to do it today, which is they want it to be automated, they want it to be immediate, they want data-infused buying more than just demographics and we're able to do that today."

The self-service tool allows customers to sign on to SpotPlan and buy inventory through iHeartRadio's Programmatic Private Network or through Katz's Expressway. According to Brian Kaminsky, iHeartMedia's president of programmatic and data operations, iHeartRadio provides data from its iOS and Android apps which buyers can target against. Along with typical demographic data, audience segments can be broken down by political affiliation, what kind of mobile device a person is using and what kind of car the listener drives.

The growth of streaming has caused some media buyers to look at buying differently than they had in the past. At Horizon Media, only about 15 percent of the agency's spend is some form of digital audio, while the "vast majority" of investment is still in AM/FM radio, said Lauren Russo, svp managing director at Horizon Media. However, Jelli's platform could increase the agency's ability to buy programmatically.

Other agencies are interested as well. Agencies such as Havas Media Group, Publicis Media and Dentsu's Amnet all see the platform as a useful way to buy more efficiently and target consumers through radio.

"The audio landscape has changed dramatically for us," Russo said. "It's a very exciting time for us. We have this reach with AM/FM radio, but we have the ability to couple that with some more data points and data sets, it becomes a really exciting opportunity. For me, it's very powerful to be able to combine that data with the massive reach that radio has."

According to Karsten Weide, an analyst of the media and entertainment industries at IDC, the platform is a "major, major breakthrough" for the radio industry. According to IDC, programmatic radio advertising is growing rapidly, from $7.5 million in advertising in 2014 to $37.5 million in 2015. This year, the firm expects that number to more than quadruple to $187.5 million, with 2017 expected to reach around $663.1 million.

Advertisers might adopt programmatic radio faster than programmatic television, Weide said. In fact, he said he wouldn't be surprised if the platform—which removes the "very slow, very expensive, and very error-prone" process of buying ads through RFPs—improves radio advertising's effectiveness by a factor of three or four. 

"There is a lot of economic pressure on these guys for how can we keep up sales and run the business more efficiently," he said. "And so programmatic is going to be a major game changer, in terms of integrating the value chain."