A 2021 study by WARC found that consumers were spending a whopping 31% of their media time with different forms of audio, but advertisers were earmarking only 9% of their media budgets for audio investment.
Three years later, the Interactive Advertising Bureau says that imbalance is even more pronounced as digital audio now accounts for one of every five minutes U.S. adults (18+) spend with digital media, but only accounted for 3.1% of digital ad revenue in 2023 based on IAB data. In an effort to help close that gap, a working group at the IAB has released a new guide to help steer more ad dollars into audio and podcasting.“The number and the diversity of brands who are achieving incredible marketing outcomes in audio has really been growing at a very rapid clip, and those outcomes are becoming easier to measure,” says Matt Shapo, Director of the IAB Media Center. “Advertisers who aren’t maybe as leaned into audio as they could be, could be missing out on opportunities to reach, engage and grow their customer base,” he said Wednesday during a webinar.
The report offers a collection of data that makes the case for audio overall, and digital audio specifically. It points out digital audio listenership has nearly doubled in the past decade to reach more than 200 million weekly listeners, while podcast listenership has jumped 325% to nearly 100 million per week. But the report says audio continues to receive a “disproportionately low” advertiser investment. “The fact remains advertisers continue to spend far less time with audio than the consumers they want to reach do,” it says.
Measurement is often cited as a hurdle by advertisers for why they don’t spend more on audio ads. But Wondery Head of Ad Measurement Alyson Sprague says in the past decade “a lot of progress” has been made to address that. She said podcasters have moved beyond download numbers to offer more insights that can be used when a media plan is being developed.
“In many ways, it’s a myth in audio and podcasting that it’s not measurable,” Sprague said. “We’ve come pretty close to parity with other digital media.” She said audio companies can now offer data to show whether audio campaigns hit the targets they were looking to drive.
But other hurdles remain. Soundrise Senior VP Jay Green said they often run into planning teams trying to use video buying methods for audio.
“You don’t want to fit a round peg into a square hole,” he said. “We want everybody to understand what the opportunities are here, because the audio opportunity is so great, and we don’t want anyone to miss out just because of an assumption.”
Jen Soch, Executive Director of Channel Solutions at GroupM, says podcasts allow advertisers to engage with listeners in new ways since whether they are listening to comedy or sports is very personal. “That’s a huge sell for us,” Soch said, adding that AM/FM radio is also “incredibly important” for her clients. But she said to get a bigger share of ad budgets, audio still needs to bring more to the table.
“What we are struggling with on our side is that we’ve got some decent measurement in terrestrial space, and we have some measurement in the streaming space, and now we have some new measurement in the podcast space, but we don’t have one place for everything,” Soch said. “That is what clients are missing.”
Soch said when they are working with the clients, they urge them to look at all media types, including audio, and that the potential reach can be additive to what else they are doing. Soch said they also demonstrate to clients that audio can be added without a significant increase in creative costs.
Rich Tunkel, Managing Director of Nielsen Audio, said it is “urban legend” audio doesn’t produce meaningful results. Nielsen has analyzed thousands of campaigns to determine the role audio has played in mixed media plans, and it shows AM/FM radio was among the top third of ROI media, followed by streaming audio. More data is still needed about podcasting to score its performance.
“We’re working with industry partners to be able to make available to marketers via their subscribing agencies that ongoing feed of data for radio so that they can easily access it and plug it into their models,” Tunkel said. “That will improve the read that marketers are getting for audio going forward.”
Green said publishers and networks also must work with advertisers to make sure they understand what’s going on during the campaign, including whether it is working. “Optimization is a key for our relationships,” he said. “It’s become an opportunity to bring in new clients for us who might not have been in the media before. It’s also working with advertisers and brands that have tried the medium before but may not have seen some of that success.”
Download the IAB’s Getting Audio & Podcasting on the Media Plan report HERE.