Interactive voice advertising startup Instreamatic, which can insert interactive voice ads into an audio stream, has raised $6.1 million in a Series A funding led by Progress Ventures, joined by Accomplice and Google Assistant Investments.
SF-HQ'd Instreamatic lets brands that advertise through streaming music apps and podcasts (for instance) have interactive voice-based dialogues with consumers. So instead of an audio ad playing in a one-way experience (as all adverts currently do), the listener can talk to, and interact with, the ad.
For example, when an Instreamatic advert says “Hello! Need help sleeping?” the microphone on the device it's playing on opens, and the listener can respond however they like. If they say “Yes” then the brand's voice (perhaps it's a mattress brand) will respond with “Then we will sing you a lullaby". If the user doesn’t respond then the ad experience is over and the content resumes playing. There are also more complex versions of this scenario. The key is that Instreamatic knows what happened and can tailor future ads to match the listener's past engagement. Here’s an example.
The company says its technology can understand the "intent and tone" of consumers’ natural responses to take the next action.
The upshot is that this AI-fueled voice ad could be coming to an audio stream near you soon. And with audio exploding following the pandemic, the platform is likely to benefit.
CEO Stas Tushinskiy, CEO, Instreamatic said in a statement: “Consumers don’t like being fed annoyingly repetitive ads. Brands are under ever-increasing pressure to make those moments meaningful while supporting strong ROI demands. On the publisher side, audio and video platforms need a better way to prove their audiences and ad inventory deliver their promise to brands. Our voice AI infrastructure, deployed by brands such as IKEA, Infiniti, and HP and across platforms like Pandora and Gaana, is empirically demonstrating that conversational marketing benefits brands, consumers, and publishers alike.”
Instreamatic says its voice ads can reach an average of 12% engagement, with some campaigns reaching 19%. These figures are quite unusual for the online advertising industry -- the average CTR of mobile advertising is 0.6%.
The company says that a recent campaign by Infiniti saw 5.5% of listeners who declined the offer in the first conversation ask to receive more information about the vehicle after the second (and more personalized) chat.
Instreamatic also says it can achieve what it calls "continuous dialogues" with consumers, not dissimilar to an Alexa or Siri device.
Because of the platform's complexity, Instreamatic also says it can build up a profile of the user based on an individual consumer’s previous interactions with a brand, allowing it to customize future campaigns.
So far brands that have used the platform include Pandora, Salem Media, Gaana (the Indian streaming music service), as well as a recent deal with Universal Electronics to expand voice ads into the smart-TV industry. It is also working with Triton Digital, one of the larger audio ad networks.
“Consumer demand for audio and video content, and the ubiquity of smart devices delivering that content on-demand, continues to accelerate,” said Nick MacShane, the founding partner at Progress Ventures, the venture capital arm of Progress Partners, a full-service merchant bank. “What hasn’t caught up is how brands and publishers can effectively engage those audiences in the same medium and analytically prove the ROI of their audio and video platform ad spend.”
A competitor to Instreamatic is AdsWizz, which, instead of voice, allows users to shake their phones when they are interested in an ad. But its interactions are obviously, therefore, more limited.
According to Juniper Research, the voice-based ad market will grow to $19 billion in the U.S. by 2022, growing the market share from the $17 billion audio ad market and the $57 billion programmatic ad market. Voice assistant usage is booming. Some estimates put it at more than 3 billion, and half of all searches are expected to be done via voice. Some 55% of teens use voice search daily.
As well as Tushinskiy, the Instreamatic team also includes co-founder Simon Dunlop (former CEO/founder of Bookmate, a subscription-based reading and audiobook platform, and Zvuk; Victor Frumkin (co-founder at Zvuk, a mobile music streaming app in Eastern Europe, and Bookmate); Ilya Lityuga, CTO, one of the original team members at RuTube; and Andy Whatley, U.S. radio industry veteran.