Presenter: On this episode of The Sonic Truth, Scott Peretti, President of Katz Digital, sits down with Veritonics Kristen Sherrin to discuss the driving forces behind the utilization of audio in today's media mix, including how brands should be thinking of streaming and podcasting, how the measurability of the medium has propelled its growth, and more. Thank you again for listening, and welcome back to The Sonic Truth.






Kristen: Welcome back to The Sonic Truth. Thank you so much for checking out this episode. I am thrilled to be joined today by Scott Peretti, President of Katz Digital Audio. Welcome, Scott.






Scott: Thank you, Kristen. Excited to be with you.






Kristen: Excited to have you here, and it's been a little while, so thanks again for coming on. Let's talk why audio, why now? So, what do you think is driving the increased utilization of audio and podcasts as a marketing vehicle?






Scott: Yeah, well, great question. First of all, I think if you look back over the last 5 to 10 years, I think you would notice a constant trajectory up for audio, both in terms of consumption and media spend that's following that. But I think as it relates to right now, there's a lot of exciting things going on with audio, both in terms of its development. When I think about that, I think about some of the great content being created on the podcasting side and about how that business continues to accelerate. But I also think about the new emerging forms of audio.






I think gaming audio, connected television audio, obviously much more streaming content that's out there for more traditional-based streaming audio. I mean, there's just a lot of good product out there. And at the same time, what we're seeing is advertisers really taking notice. And I think the stat from the IAB was for the last two years that digital audio has had the highest percentage increase in spend. And that's not surprising because dollars are following the consumer in terms of where they're spending their time.






Kristen: And how much of the increase in consumption, would you say, is due to the fact that it's a screenless medium and it's really high engagement? It's a companion medium, right? Whether you're walking your dog or cooking or working out or commuting, you can pop in earbuds and engage with your favorite hosts and content and music from anywhere. Do you think that's something that advertisers are clinging to as they potentially invest more in the medium?






Scott: Sure, sure. I think we're on the go. We're an on-the-go society, so we're always on the move, and audio is the best companion to follow us. I think that natural state of where we are, always on the go, coupled with really the increase of technology and ways that we can consume, you mentioned earbuds. Obviously, you can kind of consume audio anywhere now across your mobile devices, probably the most common way. But whether it's in the car, whether it's listening on devices, there are fridges that produce audio, all kinds of different devices. And I think the smart speaker, all of that, making it easier to use, easier to find, and coupled with great content out there is just really expanding where the format is.






Kristen: Yeah, and especially from a branding perspective, too. I think, not for that to go unnoticed, but if you hear a truck quacking, you associate it with Amazon, or you hear the ka-ching and the Panera app. There's so many functional sounds, or the hum of a Prius, right? There's so many functional sounds now associated with brands that I think some people forget, too, that that's a huge part of the experience, especially from a memorability perspective.






Scott: Well, I think you're right, Kristen. I think those examples that you gave, I think as you were going through them, people were thinking in their head, oh, I know that. I remember what that sonic identifier is. That just speaks to the power of audio.






Kristen: Sure.






Scott: I think you're right about the branding perspective. Look, clients, advertisers are, I think now more than ever, although you can make an argument that they always have, they're really cautious about where they spend their money. They want to spend money where it's going to be the most effective and the most helpful in terms of tying their message in with reaching consumers. There's no doubt audio just does that better than, I think, any other format that exists out there. So, I think that's getting advertisers to lean in more and spend more and ask good questions. And candidly, I think some of the work that is being done on the attribution side that's really proving that out and giving us some hard data to support that belief and story is really making a difference right now.






Kristen: Going back to the advertiser side of things, how should they be thinking about audio in terms of their overall marketing mix? We have a lot of, you hear about a lot of advertisers and brands that are just dipping their toes in. They're experimenting with ads on podcasts or ads on streaming audio or with the creation of a Sonic logo. As they evaluate, especially as we come closer to the end of this year, how much they're spending in social and email and display and video and audio. How should they be thinking about their investment on this side of the house?






Scott: One word comes to mind and that's foundation. I think audio should be the foundation of any media plan. It's effective. It's intimate. It has the ability to target audiences to reach the consumer that they're looking for. It's ubiquitous. I think it's not something that you test, although we'll take that for people that haven't been in audio. I think where it is and its ability to impact any form, any category of advertisers, it should be the foundation of every buy, I think that comes down. Obviously, that's something that us at Katz Digital Audio are advocating for. Not only the formats that exist out there in audio that can be taken advantage of, but just that audio should be looked at as the base buy of any campaign.






Kristen: Based on what you're seeing with your clients, is there any one vertical or verticals that are embracing it more than others or that perhaps audio was like a natural no-brainer fit or the early movers, if you will?






Scott: I get asked that a lot. It's funny. I'd love to have a better answer for it, but we see all verticals and categories expanding in there from auto to finance to insurance to travel. We're just seeing across the board success across all kinds of advertisers that want to get their message out there. It's hard to pinpoint one specific vertical that's out there, but we're seeing all forms out there. Now, advertisers might have different focuses. Even though they might use digital audio as a foundation buy, what we're starting to see now is what we call on our side the upselling of maybe it's podcasting that's new there.






Maybe it's multicultural audiences that they're looking to reach and be a little bit more sophisticated about their buys there. Maybe it's emerging audio formats that they're looking to test. Even within the audio universe, I think there are other elements of audio that customers can use to expand to, again, reach that audience that they're looking for. For us, Kristen, at Katz Digital, we're really focused on making sure we provide every form of audio at scale, best partners, best publishers and platforms to be able to sell the audiences that our customers are looking for to generate the results that they want.






Kristen: Based on your experience servicing your clients, what role is the measurability of audio, be it creative measurement, brand lift, attribution, playing in the increased use of the medium by brands and their agencies?






Scott: A bigger and bigger role is what I would say. I think there's no doubt within the media space that there's a lot of scrutiny on agencies, on people placing dollars. They want proof that it works. I think everybody's leaning in to partner with different data and measurement companies to show the success that the audio could have. From our standpoint, it's really just confirming what we knew to be true, but it's exciting to have that validation from these big data companies that are coming in to prove that out.






Kristen: How often do clients come to you with custom KPIs that they're looking to measure?






Scott: I would say somewhat frequently, but a lot of times they're going to give us in a brief what they're looking to achieve on a more macro level and then work with us to figure out how we can achieve that to the audiences that we're delivering. Again, it's often very fundamental. They're looking to create some kind of action and reach the consumers that they're looking to sell their products. That's the main goal for most every advertiser that we're working with.






Kristen: Do you find as though the data from the case studies that you produce are used widely across the teams within an advertising client? The performance team, the marketing team, the business team, so that decisions can be more informed moving forward, or is it really just kind of siloed?






Scott: Yeah, I think it could be better. I think that would be my broader answer. It could be shared more effectively, but I think it's getting better and better. I think that, again, it's a collaborative approach in the divisions, within the agency, the client, the vendor in this case, which would be us, and working together to share the right data, to feel comfortable doing it, and get that information back to the client where everybody looks good. They perform by, we reach the right audiences, the data supports what the goals of the campaign were, and everybody's celebrating that success.






Kristen: With good reason. Do you find that there are, I know you mentioned a few specific audiences a couple minutes ago, but are there any trends that you're seeing as of late with specific audiences that are seeing an uptick in terms of being targeted, or is it really still kind of all over the place depending on the client?






Scott: Yeah, I mean, I think broadly we're seeing podcasting get more, it starts to evolve a little bit as a business. For us on the Katz side, we're selling audiences at podcasts. We pretty much represent every large podcasting platform that exists, so it's about finding the right audiences and content that we can deliver for a customer. I think we do an excellent job of that. There's a lot of interest in figuring out how to do that. It becomes fairly overwhelming, so I think that's a pretty big example of that, but just figuring out what's the right kind of spending levels, what are the markets that are going to create the right actions, finding audiences and drilling down with those is going to be key.






There's also a lot of interest, or I would say growing interest, around producing the right creative, the actual spot itself, the commercial, and kind of testing against that and making sure that they're delivering the right messages to the right audiences. We've seen a lot of evidence that if you do that right and effectively, you're going to see better results. Again, that's a collaborative approach that a lot of clients, agency customers are leaning in with us to try to make sure that we have the right message out there on the right platforms to deliver the results, to maximize the opportunity to deliver the results that they're looking for.






Kristen: Absolutely. I know one of the most common things that are reiterated in terms of creative is you never repurpose creative, right? It's not best practice to take a radio ad and throw it on a podcast or something like that. Do you think that that is something that is widely understood now, or do you still get a lot of questions around repurposing creative versus coming up with something new and unique and testing that for the channel and the audience?






Scott: Yeah, I don't. Look, you're going to find advertisers and clients with different points of view of that. I mean, there are some clients, advertisers that really have a message, a creative, a voice talent. I mean, you talked earlier in this interview about Sonic Identifiers. They spend a lot of money to get the creative right, and they want to push that message out. So, it's not always that it needs to be different. Again, I think we have examples of it, and some of the work that we've done with Veritonic show that if you take the time to customize that creative for the audiences that you're going to deliver, it can be more effective. It's not a one-size-fits-all. It can be different depending on the advertiser and how they want to take advantage of the platforms. But I think just more interested around how do they maximize the campaign and results, and creative plays a big role in that.






Kristen: And can you think of any, maybe a recent example of success that your clients have seen from testing and optimizing before they put an ad in market?






Scott: Yeah, I think we have a good example of a big healthcare company that was looking at different states in terms of how they were marketing to get people more on board in signups. And they took a more, what I would call a localized approach to the creative by state to kind of craft up and work up some different messaging unique to that state and marketplace. And we did a test along with that. We saw really a spike in results during that same, as we compared it to the same level of spend the year before. So, this was just the same level of spend a year over year with a different approach to the creative.






And the results that came back in terms of signups and engagement were all significantly higher. So, for me, that's an example of taking a little bit of a deeper dive into the creative, not going so unique, but specializing it by state, localizing it a little bit more and getting a better lift on really what would be the same product and offer that was being done the year before.






Kristen: That's great. That level of customization, optimization, if you will, like having that data must just be so valuable for an advertiser.






Scott: It is. It is. And while we're doing that study for one specific advertiser, we try to take some of that knowledge and what we learned. And we're constantly learning, all of us, I think, in this space.






Kristen: Sure.






Scott: As we learn certain things, we try to share that knowledge on behalf of the audio industry to coach people and help people on how to run better, more effective campaigns and see the results that we know audio can deliver.






Kristen: Absolutely. And we talked a lot about the rise in consumption, the rise in the utilization of the medium. How do you think moving forward that will impact spend in other channels like social, digital, video? Do you think it's going to be as popular as maybe some other channels might start to fall by the wayside? How do you think if you had a crystal ball that might evolve over the next couple of years?






Scott: Yeah, I definitely see audio as rising. From my perspective, and I think there's been some studies recently that have showed this, audio hasn't got its fair shake. And so, we're kind of on our march not to get clients to overspend with audio, but just to get back what we feel like we deserve. And if you look at the time spent by all of us engaging in audio, and then you look at the percentage of dollars that are spent against the space, there's a disparity there. And so, I think what you're seeing is things are moving in a positive direction. It needs to move faster.






And again, I think that when there's more scrutiny on dollars that get spent, when we as Americans, consumers, as people out there are on the go consuming media differently all the time, but digital audio continues to grow and accelerate, I think you're going to see it continue to grow. Now, where that comes from, that's anybody's guess. Is it a little bit from socials, a little bit from videos? I mean, it could come from all of these areas, but no doubt we're going to see it continue to grow and expand.






Kristen: That's great. I hope that's the case. I'm sure that is the case. I mean, obviously we at Veritonic believe that to be true.






Scott: It will be interesting.






Kristen: It will be, I know. Power of positive thinking.






Scott: That's right. That's right. You know, I'm teasing a little bit, but the evidence is there. I mean, the stats that we're seeing, the increase of budgets. I mean, I look at our business and I look at the number of advertisers. I mean, at this point in 2023, I mean, we have somewhere of almost 50% more advertisers that we had on prior to the year. And that was 70- I mean, the acceleration of advertisers that are taking advantage of digital audio, not only on our platforms, but across the space is magnified and getting bigger and bigger. So, there's good evidence for it. So, keep the faith, Kristen. Keep the faith.






Kristen: Always.






Scott: All right.






Kristen: So, last question, how do you think organizations like industry associations like the A&A, for example, can help with the evangelism of audio and the education around its effectiveness and how to get started and things like that? Because you look at these large associations that hold a number of events throughout the year and audio is still such a small piece of the overall message and the dialogue that is had at these events. And that personally is something that I would like to see increases in an effort of us all working together to further educate advertisers and their agencies on the power of audio.






Scott: Yeah, I mean, some of that's on us, quite frankly. You know, all of us in the audio industry, we need to be much more active and take a better leadership role at some of the events that you mentioned. So, I think we need to own that. I do think it's getting better. You know, I look at all of these different events and the ones I'll attend every year. There's a little bit more buzz about audio, a little bit more commitment to audio, a little bit more time spent. You know, I think things, whether it's different vendors in the audio space, different publishers, platforms, the IAB is playing a big role.






You know, I think people are seeing that opportunity and knowing where we have to lean in. So, I think it's all of our responsibility to keep telling a story and creating these platforms. It could be a podcast like the ones that you guys are producing. It could be participating more aggressively at the A&As. All of these things coming together, finding opportunities to evangelize, to tell our story and magnify it. I think all of that together will have a positive impact on the continued acceleration of audio spending and consumption.






Kristen: Completely agree. That was my last question, Scott. Is there anything else that you want to leave our listeners with in terms of happenings at Katz? How they can contact you to learn more, get started or any other general thoughts about audio?






Scott: Yeah, I think. So, thank you for that opportunity. I think for those that don't know Katz check us out. I mean, we are we're doing a lot around the audio space to provide the audiences that that advertisers are looking for. I talked about some of the studies that are being done. If you go to www.katzdigital.com, you'll see all of our case studies on there, many of which we've done with Veritonic that we're proud of that are some really good studies as we look to tell the great story of audio. But we're doing a lot of, I think good things to evangelize and highlight the success of audio for our industry. And that's a role that we take a lot of pride in for our business.






Kristen: We certainly are. And again, we are so thrilled to be working with you all and continuing to work with you all and to promote all the great things that you're doing to help move the audio space forward. So, thank you for all for everything that you guys do.






Scott: Yeah, you guys are good partners and doing good things to help evangelize and sell the space. And we're glad to be partnered with you. Thank you, Kristen.






Kristen: Thank you, Scott. It's such a pleasure to have you on. And I hope to have you on again soon.






Scott: Great. Have a great day.






Kristen: Thank you. You too.






Presenter: At Veritonic, we remain committed to helping you get the most out of your audio strategy. If you're interested in learning more about audio research, testing, and measurement, visit veritonic.com or contact marketing at veritonic.com. [silence] At Veritonic, we remain committed to helping you get the most out of your audio strategy. If you're interested in learning more about audio research, testing, and measurement, visit veritonic.com or contact marketing at veritonic.com.






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