Is Digital Audio Exchange a game-changer for radio?

Can Global’s new radio advertising platform transform the opportunities available to brands within digital streaming? Jane Power, head of radio at the7stars, investigates.

The month of June brought two major developments in the digital audio arena. Firstly, the Official Charts Company announced that from July, music streaming will be included in the official singles chart – a strong statement that recognises the importance of streaming and a clear effort to ensure that the singles charts remains relevant to a technology driven audience.

Secondly, and more significantly for advertisers, June saw the launch of Digital Audio Exchange (dax), a new advertising platform that is set to transform the ad opportunities available to brands within digital streaming.

Starting with the basics – what is dax? Developed and launched by Global Radio, the largest radio media owner in the UK, dax gives a single sales point for audio inventory from over 30 traditional UK radio stations, music streaming platforms and audio social networks.

A single media buy can now be used to reach listeners of Global’s own Capital, Capital Xtra, LBC and Classic, as well as third-party services such as Spotify, blinkbox, Mixcloud, audioboo and Bauer’s Absolute Radio Network.

This is a particularly salient launch given the current transition of the UK radio landscape. At the annual RadioCentre conference held last week, Helen Boaden, director of BBC Radio, spoke of how recent developments in technology mean that the commercial radio industry is currently undergoing the greatest period of change in its 40 year history.

At the same event, Communications Minister Ed Vaizey MP echoed this sentiment by highlighting that competition for audiences’ attention across any platform or device is fiercer than ever, and in 2014 this battle focuses not only on what is being broadcast but also how it is broadcast.

While the launch of dax is definitely a step change for the radio industry, against such an increasingly digitally fragmented backdrop, it is not an entirely unexpected launch. Radio broadcasters realised some time ago that it made sense to provide their station’s programming to the growing portion of their listeners who expected to tune in online, and 51% of the UK population now tune in to digital radio every week, according to RAJAR.

With a noticeable shift in audio consumption from an ownership to an access model, the media owners responsible for listening platforms are keen to monetise the digital audio spot ad – dax is the vehicle for this.

While new to the UK radio market, this model has definitely borrowed some learnings from elsewhere. In fact, the trend in recognising the change in people’s media consumption habits and then charging a premium for the newest platform through which to access them is old hat in media.

What technology has changed, however, is that across any medium, the key difference between digital inventory and broadcast inventory is the degree of connectivity, which in turn facilitates greater targeting and accountability.

One need only compare the CPT for VOD to broadcast TV and it’s clear that dax hasn’t reinvented the wheel. That is not to say that there isn’t great potential for a digital audio exchange though. Across the pond where the digital audio ad market is more mature, it is valued at almost $1 billion.

The American streaming industry is also home to iHeartRadio, a wildly successful online radio service from Clear Channel, which only last week reached the threshold of 50 million registered users, a milestone only three years in the making.

So back on home turf, what does the future hold for dax?

With launch partners including Vodafone and Asda, the first campaigns on dax will focus on a “test and learn” approach. What the dax ad proposition currently lacks across the majority of its portfolio is clickable accompanying ads and rich targeting capabilities. The former is currently in the pipeline and we are told that plans are in place to overcome the lack of first party data to address the latter and validate both audience size and composition. While very much a nascent platform, dax will allow advertisers to reach and engage new audiences.

The research from the initial wave of launch partner campaigns will be highly anticipated and should be available for Q4 this year. Alongside this, the RAB are working on a research piece entitled “Audio Nation” to investigate how traditional radio and other streamed audio are consumed, and the IAB Audio Council are also working on a research piece; the findings of both are planned for publication towards the end of the year.

A similar study from America published a fortnight ago prompted Edison Research’s Larry Rosin to declare that audio is “the hottest space in the world of media”. On top of being the current Zeitgeist, we expect dax will mark a distinct change in the planning and buying of both radio and digital media campaigns from now on, and the first step towards the advent of programmatic buying in radio.

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