Instreamatic Raises $6.1M Series A to Revolutionize Audio Advertising

Instreamatic Secures $6.1 Million in Series A Funding

Instreamatic, a startup pioneering interactive voice advertising, has successfully closed a $6.1 million Series A funding round. The investment was spearheaded by Progress Ventures, with participation from Accomplice and Google Assistant Investments.

Revolutionizing Audio Advertising

Headquartered in San Francisco, Instreamatic empowers brands to engage consumers through interactive, voice-driven dialogues within audio streams. This represents a shift from traditional, one-way audio advertisements.

Instead of passively listening to an ad, users can now actively participate. For instance, when prompted with a question like “Hello! Need help sleeping?”, the device’s microphone activates, allowing the listener to respond.

How Interactive Voice Ads Work

If a user replies “Yes,” the brand – potentially a mattress company – might respond by offering to play a lullaby. If no response is given, the ad concludes, and the audio content resumes.

More sophisticated interactions are also possible. Instreamatic leverages user responses to personalize subsequent advertisements, tailoring them to individual preferences and past engagement.

Understanding Consumer Intent

The company’s technology is designed to interpret both the “intent and tone” of consumer responses, enabling appropriate follow-up actions.

This AI-powered approach to voice advertising is poised for widespread adoption, particularly given the recent surge in audio consumption.

CEO Statement and Brand Adoption

According to Stas Tushinskiy, CEO of Instreamatic: “Consumers are increasingly averse to repetitive advertising. Brands face the challenge of creating meaningful ad experiences while demonstrating a strong return on investment.”

He further stated: “Audio and video platforms require improved methods for validating their audience reach and ad inventory performance. Our voice AI infrastructure, utilized by brands like IKEA, Infiniti, and HP on platforms such as Pandora and Gaana, consistently demonstrates the benefits of conversational marketing for all stakeholders.”

Impressive Engagement Rates

Instreamatic reports an average engagement rate of 12% for its voice ads, with some campaigns achieving as high as 19%. This significantly surpasses the typical 0.6% click-through rate (CTR) observed in mobile advertising.

A recent Infiniti campaign revealed that 5.5% of listeners who initially declined an offer subsequently requested further information about the vehicle after a more personalized follow-up conversation.

Continuous Dialogue and User Profiling

The platform facilitates “continuous dialogues” with consumers, mirroring the functionality of voice assistants like Alexa or Siri.

By analyzing past interactions, Instreamatic can construct user profiles, enabling highly customized advertising campaigns.

Expanding Reach and Partnerships

Current platform users include Pandora, Salem Media, and Gaana, alongside a new partnership with Universal Electronics to integrate voice ads into the smart-TV ecosystem. Collaboration with Triton Digital, a prominent audio ad network, is also underway.

Industry Perspective

Nick MacShane, founding partner at Progress Ventures, commented: “Demand for audio and video content, coupled with the proliferation of smart devices, is accelerating rapidly.”

He added: “However, the methods for brands and publishers to effectively engage these audiences and analytically demonstrate the ROI of their ad spend have not kept pace.”

Competitive Landscape

AdsWizz represents a competitor to Instreamatic, offering an alternative interaction method – shaking a phone to express interest in an ad – though with more limited capabilities.

Market Growth Projections

Juniper Research forecasts the voice-based ad market to reach $19 billion in the U.S. by 2022, expanding from the existing $17 billion audio ad market and the $57 billion programmatic ad market.

Voice assistant usage is experiencing substantial growth, with estimates exceeding 3 billion users. Predictions suggest that voice search will account for half of all searches, and 55% of teenagers utilize voice search daily.

The Instreamatic Team

The Instreamatic team comprises Stas Tushinskiy, Simon Dunlop (formerly of Bookmate and Zvuk), Victor Frumkin (co-founder of Zvuk and Bookmate), Ilya Lityuga (CTO and original RuTube team member), and Andy Whatley, a veteran of the U.S. radio industry.