XAPPmedia CMO: Audio Doesn’t Have The Viewability Problem Of Display

zap_edited-1Interactive audio ad firm XAPPmedia closed a $3.8 million round of Series A-1 funding on Thursday, which it will use to crank up its offerings for Internet radio publishers.

With its latest funding, XAPPmedia will add staff and develop new interactive capabilities, many of which are being designed at the request of customers such as NPR, Amazon, StubHub, Fandango, United Healthcare and Ford.

The round, led by a group of private investors, brings the DC-based company’s total funding to $6.8 million.

XAPPmedia used its last round to launch interactive audio functionality for NPR, which it used as the foundation for tools around voice-activated content discovery and app navigation. XAPPmedia also extended its service to more than 300 radio stations via a partnership with mobile app developer and monetization firm jacapps in January.

Though Internet radio audiences are growing, advertising spend is lagging. According to eMarketer data, the industry is expected to spend about $2.75 billion on Internet radio advertising this year, which stacks up to 4.7% of digital ad spend. XAPPmedia CMO Bret Kinsella said that means there’s a $4.7 billion gap between ad spend and attention from consumers in terms of media.

“We have more advertiser demand right now than we have ad inventory, which we’re working on fixing by getting more publishers online,” Kinsella said. “There’s really strong advertiser interest in the space because there’s large reach and what we do is measurable.”

As listening time grows in 2015 to an estimated 43 minutes per day on average for American adults, up from 30 minutes two years ago, Kinsella said advertising dollars will follow. More listening time means increased ad loads, he explained, which expands the amount of inventory available to advertisers.

“Internet radio really hit a tipping point last year,” he said. “We started to see the reach of the platform exceed 50% of the US population. We believe that in 2015 and 2016 we’re going to hit the tipping point in terms of advertiser migration.”

One of XAPPmedia’s selling points are CPMs that are four to five times higher than other mobile ad units. XAPPmedia’s other pitch points out that as mobile device usage increases, users aren’t always looking at their screen. XAPPmedia claims 79% of listening happens when touch interaction is off the table, hence the value of voice-activated formats.

Today, XAPPmedia offers dozens of interactive audio actions, among those the ability to send coupons and emails, and a function to redirect listeners to purchase pages. Clients have asked for expanded services like the ability to save events to calendars, find nearby locations and share content on social media.

“If you look at the primary objectives of Internet radio advertising providers, No. 1 is growing audience, No. 2 is improving ad rates and No. 3 is improving sell-through rates,” Kinsella said. “We’ve been enabling these additional capabilities so they can be enabled simply thorough voice activation.”

XAPPmedia provides its clients with metrics by measuring engagement with its interactive ads and when a spot results in a purchase. That’s a step up from terrestrial radio, where Kinsella said measurement is often anecdotal, survey-based or imprecise.

“Internet radio has been important in raising the bar because every session is tracked,” he said. “We don’t have the viewability problem that digital display has.”

XAPPmedia is gearing up to unveil a number of integrations next quarter with broadcast radio stations that have an Internet presence in the US.

“The next step for us as we move from trial and integration is to go live with large audio publishers,” Kinsella said, “and to make sure we have the infrastructure in place to support them adequately.”

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