iHeartMedia is acquiring the programmatic advertising startup Jelli to help it expand its digital advertising capabilities.
The acquisition, which the company announced today, builds on the past two years of testing since iHeart first began using Jelli’s platform in 2016. The technology allows iHeart to use consumer data to target listeners across 250 platforms and 2,000 devices while also adding attribution capabilities. According to iHeartMedia CEO Bob Pittman, Jelli lets advertisers create impression-based media buys. Pittman said the company has been disrupted by Facebook and Google, but Jelli’s platform will help it and its more than 850 stations better compete.
“Rather than trying to convince the advertisers, ‘no, no, no, no, don’t do that,’ we said if that [kind of service is] of value, we have to build that same capability for our advertisers,” Pittman told Adweek.
Indeed, audio consumption and the complexity of audio advertising is growing across some of the largest streaming platforms. According to a report by Edison Research and NPR earlier this year, 18 percent of Americans—or about about 43 million—now own a smart speaker. A quarter of those surveyed said they listen to audio most often using a smart speaker, while only 17 percent cited AM/FM radio as their medium of choice.
The acquisition of Jelli comes as other audio companies are scooping up ad-tech companies of their own. In March, Pandora announced it was acquiring of AdsWizz for $145 million, and Spotify bought MightyTV a year earlier. Terms of iHeart’s deal for Jelli were not disclosed.
Jelli’s technology won’t only be used for iHeartMedia. Instead, the company will continue to offer programmatic audio services to other broadcast companies.
“This is a unique group of silicon valley digital technologies who have really taken the time to understand the broadcast radio business and help us modernize it and make it compatible with other media,” said Brian Kaminsky, president of iHeartMedia’s SmartAudio and Analytics Group.
In December, iHeartMedia is expected to have confirmation hearings related to its Chapter 11 bankruptcy filing earlier this year, allowing the company to emerge with $5 billion in debt rather than the $20 billion it had amassed when it filed for bankruptcy protection earlier this year. Pittman said the move will free up the company to use more of its earnings on “other things” than paying its debt. He said iHeartMedia isn’t looking to acquire any more companies. However, he said, it does plan to be more active in the digital advertising space.
“Suddenly, audio is the shiny new thing, and we want to make sure we’re completely prepared for that demand,” Pittman said. “You don’t get many chances to be a shiny new thing.”
Apple is also reportedly eyeing iHeart as a shiny object, though in a different light. According to the Financial Times, Apple is considering taking an equity stake in iHeart as a way to boost its streaming service. A deal, reportedly worth “tens of millions,” could also be a marketing partnership rather than a direct investment, according to FT.
Pittman declined to comment on the report.