Recently, I summed up my feelings about audio’s expansion in a post that effectively turns my fanboyism to 11, predicting audio will soon reach video as the channel/format of the future. It’s an ode of sorts to what makes audio great, and digital audio advertising plays a very important role in these future movements. As ever, there’s plenty of data to back it up.
A unique opportunity
On a very basic level, what should make any publisher giddy about digital audio advertising and audio ads is one simple fact:
people dig audio.
Podcasts, streaming audio, audio articles – you name it, people are listening and spending more of their time absorbing through their ears. With a fairly cheap cost of entry and growing listening interest, numerous brands and publishers are flocking to the audio landscape to get a footing in a medium that can engage their readers and build a new revenue stream.
The ever-increasing level of sophistication in digital advertising technology, namely the growth in programmatic buying opportunities, has also attracted many advertisers or at the very least, got them intrigued about the possibilities.
Streaming services such as Spotify and Pandora, along with the meteoric rise of podcasts and other forms of digital audio have boosted digital audio advertising. As the face of the audio revolution, smart speakers also have an important role in the digital audio advertising landscape: as enablers/accelerants of digital audio consumption, and a potential advertising outlet. So, the fact that 85% of advertisers and agencies plan to increase their investment in digital audio in 2020 shouldn’t come off as a surprise.
According to PwC’s and IAB’s report, digital audio advertising revenue reached $2.3 billion in 2018, a 22.9% increase compared to 2017 revenue of $1.8 billion. The continuous year-over-year growth is largely attributed to podcast ad revenue, which is projected to pass $1 billion in 2021, up from $479 million in 2018.
Why are advertisers so enamored with audio?
Looking from the user’s perspective, audio has an unprecedented ability to form an emotional bond with the listener. The one-on-one nature of the medium creates a sense of exclusivity and an increasingly personal and impactful experience. The rapid pace of innovation in voice technology has significantly added to the overall convenience factor, where modern life is more on-the-go and about efficiency, extending the reach of multitasking.
The intimate nature of the medium is what makes it perfect for conveying a message that will resonate with the users. On top of that, audio is an advertising format that doesn’t require visual stimulation and has very limited competition.
From a business standpoint, the ability to target a user in the right place at the right time, and within the right context is vital. It represents a huge opportunity to connect with people in an authentic, immersive, and contextually relevant way, filling a gap in the customer journey.
In fact, audio ads have proven to alter the listener’s perception and drive action. Podcast listeners are more likely to take action after hearing an ad in their favorite podcast: 45% will visit the website, 42% consider a new product or service, while 37% will search for more information about the product or service. On top of that, 90% of audio streaming listeners choose ad-supported listening.
Thanks to the use of contextual targeting through contech (content technology), audio as a channel is on par with the rest of the players in the digital industry. It’s not only about the reach, especially when it comes to young(er) people, but also about engagement and understanding the finer parts of the hows and the whats. If anything, it’s an opportunity to capitalize on this highly positive sentiment on audio in more than one way and develop a stronger relationship with the target audience.
It’s not only about the reach, especially when it comes to young(er) people, but also about engagement and understanding the finer parts of the hows and the whats. For instance, there are different types of content that engage with users by providing content that is contextually relevant to a user, as well as an advertiser. The traditional user-publisher interactions are disrupted by providing engaging content that looks and feels entirely native and facilitates a seamless user experience that ultimately yields a higher engagement rate.
If anything, all of this is an opportunity to capitalize on this highly positive sentiment on audio in more than one way and develop a stronger relationship with the target audience.
Better measurement and attribution will unlock more value
There is a reason why the title of this post has ‘potential’ in it. The measurement of digital audio engagement is a growing area, where a greater understanding is needed. The absence of uniform (or meaningful, if you want) metrics is driving away some advertisers. For instance, investments in audio content for smart speakers have been rather conservative, despite clear progress, due to unclear monetization. There are a lot of unrealistic expectations of what digital audio advertising can provide.
It’s important to note that audio in its digital form is still developing, and is en route to become the “upper funnel” engagement method many see it as. Technological advances will improve the standing of the digital audio advertising market as the industry comes up with more precise measurements and attribution metrics.
So far, digital audio’s ability to provide a wide array of creative opportunities, both in terms of content and advertising, is what has numerous publishers and advertisers glued to audio on their mission to deliver a more relevant and personalized experience. It’s a simple equation: as listening activity continues to spike, so will advertisers investment rise. With the industry continuing to innovate, everyone interested in having a piece of the action will need to keep pace in order to take advantage of the upcoming opportunities. And as audio has shown so far – there’s going to be plenty of them.