UK-based Digital Audio Exchange (DAX) has acquired AudioHQ, a US-based digital audio sales rep firm that works with media clients like Major League Baseball, SoundCloud, TuneIn and Slacker. Terms of the deal were not disclosed.
DAX is a programmatic audio exchange owned by UK broadcast giant Global and consisting mostly of UK-based media supply. By snapping up AudioHQ, which has seven US-based sales reps, it enters the budding US programmatic audio market. It will also grow its audience from 130 million to 160 million globally.
The US digital audio market surpassed $1 billion last year, according to the IAB, while the US radio market will shrink by 4.4% to $13.4 billion this year, according to Magna.
“We’ve pushed into the US for a while now,” said Ollie Deane, director of commercial digital at Global. “We’re now a business that sells in multiple countries with an opportunity to recruit much bigger publishers.”
While the majority of AudioHQ’s business is IO-based, the firm gained some programmatic expertise when it became the exclusive US reseller for Triton Digital last year representing inventory on programmatic exchange a2x. Under DAX, the firm will gain access to technology and increase its programmatic sales capabilities as the category grows.
“We see programmatic as an important growth area in the US market,” said Matt Cutair, CEO of AudioHQ. “This gives us a lot more ammo as programmatic audio grows.”
DAX said it grew after launching in 2014 with the UK’s eight largest broadcast stations. In the UK, which has a robust programmatic audio market, DAX works with Deezer, AudioBoom, TuneIn, SoundCloud and Xaxis and is integrated with most major audio ad servers and demand-side platforms.
“Most of the publishers we’ve worked with, we have exclusivity to represent their inventory,” Deane said. “We’re their main monetization partner.”
Programmatic audio has been slower to take off in the US than in the UK. Spotify was the first major platform to launch the capability on Rubicon’s exchange in 2016 and SoundCloud followed suit earlier this year. AdsWizz powers a programmatic exchange called AdWave and a private exchange for iHeartMedia, and Triton Digital has a2x.
Among the late adopters is Pandora, which last year signaled plans to ramp up in programmatic.
Meanwhile US agencies are warming up to programmatic audio. At Horizon Media, the amount of digital audio inventory bought programmatically could grow double digits over the next few years as the available inventory becomes more premium, said Lauren Russo, managing director of audio investments and promotions at Horizon Media.
“[Programmatic audio is] a very robust marketplace,” she said. “That’s where we’ll want to do all of our transactions.”
But programmatic still faces barriers to becoming the primary way of buying digital audio in the US. It’s still not fully scaled, and audio buyers need more programmatic training, Russo said.
“[Programmatic audio is] just not there yet for my division,” she said. “We’re trying to find scale. We have to get familiar with the platforms. It’s about testing, learning and getting brands comfortable.”
Still, the US represents a huge opportunity for DAX to enter a market that’s on the cusp of taking off.
“[The US is] ready to embrace and grow programmatic,” Deane said. “We’re looking at a really big market with a lot of room to grow programmatic.”
This post was syndicated from Ad Exchanger.