You might assume that digital radio ads only have an audio component, but there’s more to it than just that. Typically, online radio ads are a combination of audio and visual — audio creative is complimented onscreen with a banner ad that serves as a visual accompaniment. In some cases (like with Spotify) you also have the ability to run video ads.

Spotify self-serve dashboard – review metrics for your digital radio campaign at any time.

Spotify and Pandora are the two largest music streaming services that play ads. For these ads you have two options: self-serve and brand. The main difference here is budget — the minimum spend to use self-serve is $250 per month for both platforms. Brand campaigns are just a teensy bit more expensive, with Spotify’s minimum at $25,000 and Pandora’s minimum at $15,000 per campaign. We’ll assume, if you’re reading this, that the former is more applicable. (And we’ll go more in-depth there in a bit.)

So when it comes to advertising, why digital radio?

For starters, it captures a traditionally difficult target market to reach: young people, especially Gen Z. (Gosh, there’s really no way to say “young people” without sounding like an old fart, but we digress…) Over 50% of Spotify users are between 18-34, and over 90% of teenagers and those in their early 20s listen to music through online streaming. In fact, 83% of 16-24 year-olds report having listened to music on a streaming platform in the last month, and 63% say they have in the last day.

Meanwhile, almost ¾ of millennials and Gen X use online music streaming, while only about 40% of those 55 and older use these platforms. Regardless of age, smart speakers are becoming more common and bringing music streaming with them.

Advertising on these platforms also gives you the ability to diversify your marketing by reaching people when they’re away from a screen; for example, half of Gen Z and millennials report listening to digital audio while doing other tasks like cooking or cleaning.

What are some of the aspects of advertising here?

Breaking it down

The active users on four of the biggest digital radio services include Spotify’s 78 million, Pandora’s 58 million, Amazon Music’s 46 million, and Apple Music’s 35 million. There are some important things to keep in mind as you navigate these platforms and develop your approach. Spotify’s audience size is projected to increase to 99 million by 2023. Meanwhile, Pandora’s active user base is actually projected to decrease to 52 million in that same span. Then there’s Apple Music, which doesn’t currently have an ad platform set up for the service.

Like we mentioned earlier, music streaming audiences tend to skew a bit younger. Most of Spotify’s users are between 18-34 (or even younger), while the largest segment of Pandora users are 25-44. Depending on the needs of your business, it may make sense to push your ad spend more heavily on one platform than the other.

While both Spotify and Pandora have their own self-serve ad platforms, what they actually push out to is slightly different. Spotify an advertising platform unique to their streaming service, while Pandora uses a unified platform called AudioGo. In addition to Pandora itself, AudioGo also serves ads for Stitcher, iHeartRadio, and TuneIn. Regardless of which of these you’re advertising on, the minimum spend for self-serve is $250.

Then there’s the actual production of the ad itself. Don’t get overwhelmed — even though it’s a different ad type than conventional online marketing, it still boils down to writing good copy.

Choose your specific ad format and platform in Spotify’s Ad Studio.

First, your ad type options: On Spotify, your choices are audio and display, vertical video, or horizontal video ads. Via AudioGo for Pandora, your only choice is audio and display. In audio and display ads, regardless of platform, the primary medium that will contain the bulk of your ad copy is the audio part, while the display component typically features your brand/product. The display part isn’t anything too complicated — if you’re already running a display campaign, you can likely repurpose the ads you are running already for digital radio.

For the time being, these ads are only available for music — not podcasts — as long as you’re using self-serve. If you’re interested in advertising on Spotify podcasts in the future, you can sign up for their beta waitlist.

To give you a boost, Spotify offers free voiceover work with your choice of different actors; depending on your goals and audience, you might want to use a teenager, young woman, old man, etc. Background music is also included. Pandora has a similar service but charges a nominal fee of $10 for their work. Although these services do exist, we’ve personally noticed the best performance from audio that is independently developed by your team or agency. If you have the capacity to do so, we recommend creating the ads yourself so that you have full creative control over the final product.

How we do it

Spotify and Pandora’s self-serve ad platform is best used for impressions and brand awareness. Ads on these platforms serve very similar goals as display or programmatic efforts do, hitting people who may be much higher in the funnel than those in search campaigns. They also reach people in the same way – instead of hitting people when they are browsing websites, audio ads hit people when they are listening to music. In a way, this means that your opportunities to reach your audience are potentially much more vast. Instead of relying on people searching for things on the web, you can reach people while they are commuting, working, or even doing household chores.

We also seriously recommend having tight, deliberate targeting; it’s a waste to target outside your immediate market, age range, and the interests of your preferred audience. Spotify determines a listener’s interests by their recent podcast and playlist listening. They also offer targeting for contexts in real-time — meaning specific moments in a playlist they’re listening to. Your options for interest targeting can range from “in-car listening” to comedy to running or history. There’s a bunch. You can also target users who listen to certain types of music genres. Depending on your budget and how well you know your target market, it could be worth your while to test interests versus genre for performance.

Leverage granular targeting options to reach the most relevant audiences.

You have the opportunity to get granular with your targeting with age ranges and location. If you know your target age range starts at 23, you can start at 23. Since these platforms require accounts to access them, your ability to drill down with ages is more robust than most other services. Location targeting also lets you get fairly exact. Depending on the metro area you are targeting, you can get as specific as certain neighborhoods or zips in your city.

In general, advertising with digital radio can be an effective accompaniment to your other campaigns. By raising brand awareness here, it’ll set the foundation for more efficient conversion-focused campaigns elsewhere.