Streaming digital audio and podcast advertising is continuing its strong growth, according to a report released today by Australia’s peak trade association for online advertising. The IAB Audio Advertising State of the Nation Report found that, despite greater economic uncertainty looming, agencies intend to increase expenditure on digital audio formats in 2023.
Beginning in 2017, the annual report covers usage and attitudes to advertising in broadcast radio, streaming digital audio, DAB+ and podcasts. For the most recent study, an independent research group collected 249 survey responses from decision-makers or influencers in the allocation of marketing spend over December and January.
The results found 71 percent of media agencies intend to increase their investment in streaming audio and 78 percent intend to increase investment in podcast advertising in 2023. This comes just two days after the release of the IAB Online Advertising Expenditure Report, which found digital audio revenue hit $221.2 million in the 2022 calendar year.
Major findings from the report
Digital audio remains a powerful brand builder, with seven in 10 agencies saying digital audio is effective at increasing brand awareness. Streaming music and radio are seen as highly effective reach extensions to broadcast radio, while podcasts are rated highly effective for accessing hard-to-reach audiences and increasing engagement.
With these objectives in mind, 75 percent of media agencies now have streaming digital audio advertising as a regular part of their activity, while 70 percent of media agencies include podcast advertising as a regular part of their activity (increasing from 36 percent in 2020 and 59 percent in 2021).
Integration is also more consistent, with planning and buying digital audio in combination with other digital advertising types continuing to rise. Eighty percent of agencies now at least sometimes buy digital audio in combination with digital video advertising. And 69 percent of agencies intend to buy digital audio bundled with other media opportunities (up from 51 percent last year).
Agencies are still choosing to buy audio advertising programmatically, with 82 percent of agencies intending to buy programmatic audio in the next year (up from 64 percent in the year prior).
Interestingly, although brand building is the predominant objective for digital audio campaigns, only 27 percent of agencies consistently use sonic branding. But that may change, with the intention to introduce consistent sonic branding now at 43 percent.
What’s holding digital audio advertising back?
Despite the expansion of digital audio advertising, respondents identified key areas holding the sector back from biting off a larger chunk of the ad volume.
Brands and advertisers say challenges include creating compelling creative in broadcast and streaming radio, and a lack of understanding across all formats. The predominant challenge continues to be a lack of measurement and standardised metrics, although this was also reduced in 2022.
“This year’s’ report shows that brands and advertisers see the effectiveness of digital audio for engagement and reach, but will need more proof of the effectiveness of audio for brand building,” says IAB Australia’s director of research Natalie Stanbury.
“This should be a top priority this year for all in our industry considering the role of long-term brand building to business success during and after economic downturns.”
The company’s CEO Gai Le Roy says “one of the most pleasing results” of the study was the marked increase in planning and buying audio in combination with other digital activities.
“There is great potential for digital audio to increase its share of the digital ad pie with eight in 10 agencies who use digital audio now considering its use alongside digital video as well as the increase in omnichannel programmatic buying,” she says.
To learn more about the business of marketing in podcast format, listen to Marketing Mag‘s podcast Not So Serious.