In what continues to be a muted landscape for the tech industry, audio has only pumped up the volume. Having developed in tandem with technological advances, the medium has become increasingly diverse, creating multiple avenues for advertisers to reach audiences, spanning markets and demographics. With global subscribers to audio streaming services predicted to hit 1.3 billion by the end of the decade, and global ad spend in radio and digital audio forecast to reach USD$38.75bn (~£30.53bn) before the end of 2023, it appears that the audio market, and its opportunities for advertisers, are only gaining momentum.
To better understand the nuances of the audio landscape, we’re taking an in-depth look at the holy trinity – radio, music streaming, and podcasts – and how they are each contributing to the medium’s success.
Radio – someone still loves you
The oldest medium for audio advertising (discounting an overzealous town crier, of course), radio has maintained a strong position in global advertising, with ad spend expected to grow to USD$28,61bn (~£22.54bn) this year. This forecast growth is unsurprising, considering one of the medium’s core strengths is low production costs coupled with high ROI – radio advertising averages at an ROI of £7.70 for every £1 spent, the highest after TV. Considering the impact of inflation and the global economic downturn on the tech sector, which has deployed severe cutbacks to contend with rising costs, the value for money of radio makes it easy to understand its popularity amongst advertisers. It would, however, be unwise to reduce radio to a rainy day option – the medium consistently reaches a huge audience, with more adults listening to the radio each week than using Facebook in the US alone. Not only is radio’s audience substantial, it’s also incredibly varied, spanning age, gender, and interests, making the medium an appealing choice for advertisers hoping to reach a diverse audience. Radio’s status as a highly trustworthy medium – the most trusted amongst Europeans, in fact – cements it as a solid route for advertisers to connect with consumers, and has proven to be very effective to advertise on. Radio advertisements have been shown to increase consumers’ awareness of brands by 48%, in addition to boosting online browsing for advertised brands by 52%, signalling radio’s efficacy in influencing consumer behaviour.
Music streaming – seen and heard
While portable music has been available since 1979, the rise of music streaming over the past two decades now means listeners have more choice and control than ever before. Since launching in 2006, streaming giant Spotify has accrued over 100 million global users, 317 million of which subscribe to its ad-supported service. Music streaming’s core strength lies in its impact on listeners, with songs and artists evoking specific emotions or making them feel seen and understood (who doesn’t feel understood listening to Smoko on their morning commute, right?) According to research from Pandora, audio ads integrated within personalised playlists also have a much greater impact on long-term memory than both TV and mobile, highlighting the opportunity for advertisers to, not only reach their audiences, but stay with them long after their ad has played. With developments in measuring the success of ads on music streaming sites also underway, the medium is quickly evolving to offer marketers a holistic view of its advertising potential.
Podcasts – a little more conversation, a lot more action
Although considered a relatively new element of audio, podcasts have been a part of the landscape for years, with the term “podcasting” dating back to 2004. The medium has, however, only hit its stride within the last ten years or so, thanks to a couple of key moves from tech giants – Apple’s iOS update in 2014, for example, made it easier for customers to access Apple Podcasts by pre-installing the app on its devices. Spotify’s move to make podcasts available to all listeners in 2018 also boosted the medium, resulting in listeners skyrocketing by 175% by the end of the year. Today, a reported 464.7 million people across the world tuning into over 5 million different podcasts, with 34% of the world’s population listening to at least one podcast in any given month. Unlike traditional radio, podcasts dedicate their entirety to a specific topic or interest, making it easier for listeners to access the content they’re seeking – and for advertisers to reach the audiences they’re seeking too. With US audiences listing entertainment and education as the top two reasons for listening to podcasts, for example, advertisers can more easily match brands and services to particular programmes and target their desired audiences. And with listeners across several markets turning to podcasts during their commute, while exercising, or when out and about, advertisers have the opportunity to gain their attention while they are otherwise occupied, a perk denied to visual advertisements. This is an advantage shared amongst all audio advertising, however, podcasts are unique in their ability to build intimacy between the host and listeners. Some research even suggests that podcast hosts are up to 60% more influential than social media personalities, with 68% of listeners more inclined to consider buying from brands they hear about on podcasts than online or on social platforms. Beyond consideration, 1 in 4 podcast listeners have actually made a purchase based on a podcast ad, suggesting programmes like Four Finger Discount and Off Menu appear are a sound investment for brands and marketers.