digital audio

Podcast advertising: not just a phase

July 27, 2022 16:49 Comments Off

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There was a sharp increase in the number of people listening to podcasts during lockdowns. This opened the door to a lucrative podcast advertising sector, with brands eager to reach highly engaged listeners. Many speculated, however, that listener numbers would decrease as the world opened back up – but that hasn’t happened.

Aren’t podcasts a thing of the past?

During the pandemic, there was a sharp increase in the number of people listening to podcasts, with lockdowns highlighting the human need for 1-1 connections – something a lot of listeners feel with their chosen podcast hosts. This increase was not expected to continue, with some even suggesting that, as life began returning to normal, podcasts would see a decline in their number of listeners. However, the opposite has happened. According to the latest Statistica statistics, global listener figures in 2020 were over 330 million, and are likely to rise to 500 million by 2024, with some podcasts reaching the same listener numbers as radio shows. These encouraging numbers are leading to approximately a 40% increase in podcast advertising spend in the UK, as shown in the IAB 2020 Digital Adspend report.

Podcasts are a prime place to advertise

Listeners’ relationships with podcasts are what makes them such an integral part of a digital advertising portfolio. With a defined listening pattern that compliments their daily routine, context is more important than ever. Due to the immersive nature of podcasts, the choice of podcast is likely linked to the listener’s mood. 45% of listeners say they’re more likely to buy a product if the audio connects with them in the right way. This means that brands need to pay close attention to all contextual factors.

By taking advantage of the listener’s emotional connection with audio content, brands can make themselves heard very effectively. Listening to music releases dopamine and so creates a relaxed mental state. By contrast, podcasts require a reasonable level of concentration. Listeners have an active interest in the podcast they’re listening to, meaning the mind is most receptive to advertising information. 76% of UK listeners have taken action after listening to a podcast, whether that’s making a purchase or visiting a site.

As a result of increasing privacy and tracking restrictions, there are challenges around increased personalization. This is an important aspect of digital audio ads. Some listeners say that they would be happy to receive personalized ads – so this must become a priority. With people now listening to digital audio on connected devices, advertisers are able to obtain greater access to first-party data. This first-party data gives brands more control over who hears their ad and when, thereby enhancing targeting precision.

Dynamic or host-read podcast advertising?

Although dynamically inserted ads are on the rise in podcasts, some agencies and brands are wary of this. There is concern that more dynamic ads could give podcasts a radio feel, diminishing the value of podcast ads. Dynamic ads do however make the process quicker and easier due by avoiding a long approval process. This method is the cheaper option and ads can also be trafficked in a more targeted way than host-read.

As previously mentioned, listeners feel they have a close relationship with the host of their chosen podcast. For this reason, host-read ads are likely to see the best performance. Not only do they promote authenticity, but they also avoid the abrupt change in voice of dynamic formats. This change indicates the start of the ad and therefore reduces the listener’s attention. There are drawbacks, however. These include the long lead times for approval, as well as the inability to trial an ad within the podcast. Host-read ads are more expensive as the host is paid to endorse the product, but they often see greater returns. A Nielsen study from 2020 found that host-read ads had a recall of 71%, compared to 62% for non-host-read. The best format, though, depends on both the type of product and the target audience.

Is podcast advertising an efficient way to reach consumers?

The pricing structure of digital audio advertisements is usually calculated using the cost-per-mile (CPM) model. This means that there is a fixed rate for every 1,000 listeners. Of course, there are numerous factors which will affect this rate. Some variables include the size of the podcast audience, which section of the podcast the ad will appear in and, of course, the length of the ad. AdvertiseCast released average rates based on nearly 3,000 podcasts; the CPM for a 30-second ad is $18 and for a 60-second ad it is $25. As previously mentioned, this does of course vary from podcast to podcast, with some instances even employing different pricing structures such as flat rate and CPA (cost per acquisition), but CPM is the most common.

Although it is the most comparable advertising type, radio advertising is open to more price variation than podcasts, making it difficult to compare pricing. The disparity in radio advert costs is due to the extreme number of differing options available, with region, time of day and the number of times per week having the greatest impact on price. So whilst it is difficult to make a price comparison between radio and podcasts, it is generally accepted that podcast ads are more effective than those on the radio: if they come at a premium, this may be worth it for the greater returns.

How can advertisers improve their podcast advertising experience?

For brands to ensure their podcast advertising is successful, they need to widen their audience by reaching hitherto untapped audiences. To do this, brands should look for more niche podcast genres and smaller shows. The top-rated podcasts currently have the majority of advertising. By targeting independent creators and micro-influencers, brands will be able to reach more diverse target groups.

Context is crucial when it comes to podcast ads. The nature of digital audio requires seamless positioning, so advertisers should ensure that the podcast’s content and host’s personality compliments their brand. With so many exciting creative opportunities in digital audio, there are endless avenues to explore to benefit from the exponential growth of podcasting.

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Is the future all talk?

April 19, 2021 14:10 Comments Off

For 100 years, radio dominated audio media, entirely unchallenged. It still attracts the lion’s share of listeners and therefore advertisers: 92% of Americans listen to AM/FM radio every week – more than TV viewership (87%), PC use (54%) and smartphone use (81%). However, its dominance is becoming less certain with the rise of podcasts and now, social audio. So what does the future of audio look like?

The impact of the pandemic on our listening habits

The pandemic has had an impact on the way we live our lives, and that includes our listening habits. Despite fears that radio listener numbers would crash as commutes turned into 30-second walks to the kitchen table, in many countries, numbers increased as people turned to this trusted medium for information, comfort, connection and entertainment. In the UK, 40% of people working from home listened to the radio for an extra two hours and eight minutes a day. However, there is a belief in some quarters that, despite this increased listenership, advertising may have suffered because of radio’s great reputation for brand-building: amidst the hardships and budget cuts of the pandemic, marketers have been under pressure to deliver short-term sales results at the expense of longer-term brand-building ambitions.

Podcasting followed an interesting trajectory over the course of 2020. Podcast downloads decreased by 10% when the US went into lockdown, and it seemed that the pandemic was threatening to throw off podcasts’ meteoric rise. However, as people adapted their routines, download figures recovered and are even improving. The top 10 US podcast publishers saw a 20.6% increase in downloads in the summer of 2020 compared to the previous summer.

2020 was also the year that saw the rise of ‘social audio’: with people seeking connection but sick of screen time, social audio apps came on the scene, offering the ‘Goldilocks’ of connection – not too much, not too little, but just the right amount. But more on that later…

Ad dollars are following ears

More and more people are listening to podcasts: about 41% of Americans aged 12 and up now listen to one podcast a month, compared to 37% in 2020 and 32% in 2019. Ad dollars have inevitably followed: IAB PwC estimated that US podcast ad revenue would increase by 14.7% to near $1 billion in 2020, despite the pandemic. In 2020, 37% of marketers said they would likely advertise in a podcast over the next six months – compared to 10% in 2015. The highly engaged audiences that podcasts enjoy have shown a propensity to take action when hearing an ad, which is of course very attractive. What’s more, digital audio has the great advantage of not being reliant on cookies in the same way that other digital channels are. It offers other, privacy-centric ways of targeting listeners, such as topic-based targeting – indeed, this type of contextual targeting is likely to become more common across other digital channels after the death of the cookie.

That said, it is difficult for marketers to track which users end up purchasing their products after hearing a podcast ad. Many are hoping that Spotify and the other podcast platforms will develop a pixel tool, similar to Facebook’s, which will be able to track user activity across the platform. Podcast platforms are aware that marketers need more tools if they are to continue growing their investments in the platform. This awareness has led to acquisitions such as Spotify’s purchase of Megaphone, a podcast ad tech company, in late 2020 in order to expand its self-service advertising platform. Megaphone claims to be able to target ‘types’ of users, so only listeners who fit a specific demographic will be served an ad.

Social audio – the new kid on the block

With the popularity of social media and podcasting, it was perhaps only a matter of time before someone created ‘social audio’, where people connect through conversation. The pandemic was the optimum time for these chat rooms to take off, with people yearning for connection but fed up with their screens. Clubhouse is making waves with conversations that people can sit in on or participate in, and its success has spurred established platforms like Twitter and Facebook to create their own equivalents. Twitter’s Spaces and Facebook Rooms are still in the beta phase.

Clubhouse is, so far, ad-free and seems to actively discourage hard-selling. This means that working with the app’s influencers to create relevant, interesting conversations is the best way for brands to share their messaging with users – and has the added benefit of reaching people who have chosen to be in the room. However, as the social audio apps mature, it’s likely that advertising will become more prolific, as happened with the social media platforms. Experts predict that the explosion in social audio platforms will lead to a secondary explosion in analytics and marketing tools that will help influencers and, most significantly, brands understand their reach and impact in the social audio space.

Digital audio: the new frontier

Digital audio is the new frontier in advertising, with plenty of opportunities to engage with interested, relevant audiences. There is still some way to go in the development of tools for marketers to understand the impact of their investment, but they are in the making – this is not a space to be overlooked.

The future may not be all talk, but there will definitely be more talk.

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The reincarnation of audio

March 22, 2019 16:50 Comments Off

The last decade has seen a huge focus on digital and visual innovation in the advertising industry; but marketers and practitioners have always known the value of non-intrusive, highly accessible and limit-free advertising, which is why we are seeing a recent re-incarnation of audio for this generation.

Divergence and evolution

The audio marketplace has seen a divergence and then evolution from the standard radio format towards the podcast and music platforms, although radio still remains crucial. The beauty of these mediums for the advertiser is the ad: no blocking and no ‘peak-time’ engagement driving up prices.

Demand for on-demand audio driven by commutes and smart speakers

On-demand audio streams surpassed 400bn in 2017, compared to 252bn in 2016. Commuting times are rising as people seek more peaceful lives outside of cities, and rail commutes are on average 2 hours and 11 minutes: it’s no wonder that the demand for podcasts and other on-demand audio has risen so dramatically. Furthermore, smart speaker streaming helped to drive an 8% increase in the number of hours spent listening to digital broadcasts in 2018 versus 2017. The resurgence of audio should not go unnoticed.

Is the marketplace ready for digital audio?

Whilst the marketplace re-aligns with its audio roots, it is inevitable that there will be challenges for media planners, advertisers and auditors alike. The proliferation of streaming, smart devices and wifi has given consumers greater autonomy over their time and their method of consumption. Whilst this provides excellent opportunities for reach and brand awareness for advertisers, it begs the question: does the marketplace have the tools and devices ready to provide accountable and accurate tracking and analytics? Until these tools are standardised and harnessed across the market, it is likely the adoption of digital audio into media planning will remain consistent, but slow. Investment into this medium will be a lower priority until it can be demonstrated that digital audio outputs add strong, measurable value.

Alongside this tracking and analytics issue, the industry will need to work out how to harness the increased quantity of data in order to drive further engagement with consumers. While digital audio attracts investment with an environment that is free of ad-blocking, it does create a transparency issue for the consumer-agency-platform owner relationship.

An exciting future for audio

The future of digital audio is an exciting one. The integration of programmatic audio is set to propel audio back onto the main stage of advertising channels. Programmatic advances will increase campaign ROI, augment automation and decrease audio costs. The combination of these factors, alongside the accessibility and increase in the number of platforms will see marketers, advertisers and auditors being forced to become more innovative and dynamic in a format once seen to be traditional and static.

All hail the return of audio: finally, our eyes will be given a rest from mobile screens!

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Tag Archive: digital audio