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Instreamatic signs deals to allow people to talk to adverts on streaming services like an Alexa

Mike Butcher

Most in tech would agree that following the launch of Alexa and Google Home devices, the "Voice Era" is here. Voice assistant usage is at 3.3 billion right now; by 2020, half of all searches are expected to be done via voice. And with younger generations growing up on voice (55% of teens use voice search daily now), there’s no turning back.

As we’ve reported, 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.

That means that voice shopping is also set to explode, with the volume of voice-based spending growing twenty-fold over the next few years due to voice-based virtual assistant penetration, as well as the rapid consumer adoption of home-based smart speakers, the expansion of smart homes and the growing integration of virtual assistants into cars.

That, combined with the popularity of digital media -- streaming music, podcasts, etc. -- has created greenfield opportunities for better brand engagement through audio. But brands have struggled to catch up, and there have not been many ways to capitalise on this.

So a team of people who co-founded and worked at Zvuk, a leading music streaming service in Eastern Europe, quickly understood why there is not a single profitable music streaming company in the world: subscription rates are low and advertisers are not excited about audio ads, due to the measurement challenges and intrusive ad experience.

So, they decided to create SF-based company Instreamatic, a startup which allows people to talk at adverts they see and get an AI-driven voice response, just as you might talk to an Alexa device.

Thus, the AI powering Instreamatic’s voice-driven ads can interpret and anticipate the intent of a user’s words (and do so in the user’s natural language, so robotic “yes” and “no” responses aren’t needed). That means Instreamatic enables brands which advertise through digital audio channels (streaming music apps, podcasts, etc.) to now have interactive (and continuous) voice dialogues with consumers.

Yes, it means you can talk to an advert like it was an Alexa.

Instead of an audio ad playing to a listener as a one-way communication (like every TV and radio ad before it), brands can now reach and engage with consumers by having voice-interactive conversations. Brands using Instreamatic can also continue conversations with consumers across channels and audio publishers -- so fresh ad content is tailored to the full history of each listener’s past engagements and responses.

An advantage of the platform is that people can use their voice to set their advertising preferences. So, when a person says "I don’t want to hear about it ever again," brands can optimize their marketing strategy either by stopping all remarketing campaigns across all digital media channels targeted to that person, or by optimizing the communication strategy to offer something else instead of the product that was rejected. If the listener expressed interest or no interest, Instreamatic would know that and tailor future ads to match past engagement -- providing a continuous dialogue with the user.

Its competitor is AdsWizz, which allows users to shake their phones when they are interested in an ad. This effectively allows users to “click” when the audio ad is playing in the background. One of their recent case studies reported that shaking provided 3.95% interaction rates.

By contrast, Instreamatic’s voice dialogue marketing platform allows people to talk to audio advertising, skipping irrelevant ads and engaging in interesting ones. Their recent case study claimed a much higher 13.2% voice engagement rate this way.

The business model is thus: when advertisers buy voice dialogue ads on its ad exchange, it takes a commission from that ad spend. Publishers, brands and ad tech companies can license the technology and Instreamatic charges them a licensing fee based on usage.

Instreamatic has now partnered with Gaana, India’s largest music and content streaming service, to integrate Instreamatic into Gaana’s platform. It has also partnered with Triton Digital, a service provider to the audio streaming and podcast industry.

This follows similar deals with Pandora, Jacapps, Airkast and SurferNETWORK.

All these partnerships means the company can now reach 120 million monthly active users in the United States, 30 million in Europe and 150 million in Asia.

The company is headquartered in San Francisco and London, with a development team in Moscow, and features Stas Tushinskiy as CEO and co-founder. Tushinskiy created the digital audio advertising market in Russia prior to relocating to the U.S. with Instreamatic. International Business Development head and co-founder Simon Dunlop previously founded Bookmate, a subscription-based reading and audiobook platform, DITelegraph Moscow Tech Hub and Zvuk.