Interactive ads aren’t new.

Neither are audio ads, which made a name for themselves on the radio but have recently experienced a podcast-induced resurgence. Podcast advertising in the U.S. drove almost $1.5 billion in revenue as of 2021, representing a 72% increase from 2020.

While voice ads of this variety—especially those read by hosts—are nothing new, their interactive counterparts are a relatively new frontier for ad tech companies and brands.

In an era of heightened concerns regarding consumer privacy (a la GDPR, CCPA, third-party cookies, and Facebook scrutiny), interactive voice ads represent a double-edged sword.

How can brands and media companies realize the benefit of highly engaging audio ads without risking the alienation of their audience? 

What Are Interactive Voice Ads?

Interactive voice ads are a format that allows B2B and B2C brands to engage with consumers by starting a conversation with their digital assistant or smart speaker. Pandora was the first major player to launch voice ads in 2019, but other industry mainstays have followed suit, including Amazon and the dedicated voice marketing platform, Instreamatic.

Pandora Makes the Big Move

Introducing interactive audio ads wasn’t a surprise; Pandora announced the test in 2019, with plans to launch in Q4 of that year. In early December, the test ads went live. 

“Pandora has begun to test a new type of advertising format that allows listeners to respond to the ad by speaking aloud,” Sarah Perez explains at TechCrunch. “In the new ads, listeners are prompted to say ‘yes’ after the ad asks a question and a tone plays. The ads will then offer more information about the product or brand in question. The ads begin by explaining what they are and how they’ll work. They then play a short and simple message followed by a question to which listeners are supposed to respond.”

Doritos, Ashley HomeStores, Unilever, Wendy’s, Turner Broadcasting, Comcast, and Nestlé were some brands giving the new ad format a whirl.

Wendy’s ad, for example, asked listeners if they were hungry. If they said “yes,” the ad recommended what to eat.

Meanwhile, DiGiorno took a comical approach, asking listeners to say “yes” if they wanted to hear a pizza-themed joke.

Amazon Follows Suit

Amazon isn’t one to sit idly while other industry players innovate and attract ad revenue—Pandora generated $1.5b in advertising revenue in 2022.

In 2022, Amazon officially launched “interactive audio ads” that “make it easier than ever for listeners to engage with brands or services whose messaging they find relevant using just their voice.”

Amazon’s interactive audio ads play while people listen to Amazon Music’s ad-supported tier on an Alexa-enabled device.

Consumers can reply to the call-to-action by voice, request more info via email or set a reminder.

Kendra Tal, a Senior Partner Manager at Amazon Ads, said: “These interactions create millions of opportunities for brands to connect with customers in a variety of different ways, places, and times. And as a brand, you’re likely looking for, or at least open to, new and unique ways to engage customers wherever they’re spending their time.“

Why are brands excited about interactive video ads?

The emergence of interactive voice ads comes in the wake of society’s adoption of smart speakers. In fact, smart speaker ownership reach 35% of the U.S.

Although smart speakers haven’t gained ubiquitous status, voice technology has.

In 2022, 62% of Americans over the age of 18 used a voice assistant on smart speakers, smartphones, TV remotes, in-car systems, computers/laptops, tablets, etc.

“The growth in purchases of connected TVs and smart speakers means that consumers are spending more time interacting with these devices than ever before,” Tal said. “These devices not only allow you to reach relevant audiences with video and audio ads, but they literally put the control in the hands of the user with their TV-remote and with their voice. Amazon has the unique ability to bring together our ad products, our devices, and our voice assistant to bring interactive ad experiences to customers.”

Amazon’s take on interactive voice ads fundamentally operate in the same way as Pandora’s; however, the former has something the latter lacks: shopping data.

Tal continued, “Alexa CTAs (calls-to-action) simplify the customer experience and offer utility through voice-forward experiences. For example, when customers may not even remember the name of the product, they can simply say, ‘send me more information,’ and an email is sent to them with information on that product. This makes the customer experience more frictionless and adds time-saving convenience for listeners who would like to engage with the ad.“

As futuristic and experimental as these ads seem, all signs point to them working.

According to Amazon, the ad format has 18% higher engagement and click-through rates than dynamic video and standard pre-roll.

The Risk and Reward of Interactive Voice Ads in the Post-Cookie World

The potential for brands to increase engagement with their audience through interactive audio ads can’t exactly be understated. One survey found that 39 percent of those who responded to a voice ad (“yes,” meaning “I want to hear more”) went on to purchase the product later.

“The ad format arrives when consumers have become more comfortable talking to digital voice assistants, like Siri, Alexa and Google Assistant,” Perez continues. “There’s also an increased expectation that services we interact with will support voice commands.”

Many consumers enjoy this interaction, and the numbers show they respond to it even in advertising; 50 percent of the U.S. uses voice search features daily.

But the potential for reward does not come without risk. 

Sensitivity to consumer privacy is higher than ever, with GDPR in effect and FAANG companies under scrutiny and “consumers’ appetite for interactive voice advertisements is still largely untested,” Perez concludes.

Either way, the format is set to outpace traditional audio ads – the only question is how brands and ad tech companies will use them without stirring up the consumer fears associated with highly personalized advertising.

While privacy and sentiment concerns will persist, all parties will have to act fast in the best interest of consumers.

With third-party cookies falling by the wayside in Google’s ecosystem in 2024, advertisers will actively seek alternatives to engage with consumers.

Given the rise in smart speaker ownership and the slow embrace of mCommerce shopping, it seems likely that more advertisers will give it a shot.

That said, platforms like Instreamatic must work diligently to ensure the ads don’t cross lines, ruffle feathers, and ultimately deliver an optimal experience for brands.

And it’s done that.

In 2022, the company launched Speaky, a many-to-one communication solution that enables “customers to instantly and easily speak their minds to brands or content producers by leaving brief audio messages at any physical or digital brand touchpoint.”

Speaky taps into Instreamatic’s voice AI to analyze the ideas, advice, suggestions, and other valuable insights that customers verbalize—and then deliver reporting for brands to put that insight into action.

For more insights, sign up for MediaRadar’s blog here.