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  • Writer's pictureOlly Hutson

5 Reasons Why you Should Move Your Budget From Radio to Podcast Ads

By Olly Hutson


Ensuring your ad budget is working hard for you is more important than ever in the constantly-shifting economy. The reach and effectiveness of the ever-expanding audio marketplace is increasingly gaining more consumer attention and advertiser dollars. Where is the most efficient space to put your budget? What type of podcast advertising has the edge over commercial radio? Should radio and podcast ads both be on your media plan? Read on to find out 5 reasons why we recommend that you move your radio budget to podcasts.



1. Share of Ear


Recent data from the audio industry and online advertising sector show online audio attracted $221.2 million of advertising in 2022, with podcast advertising comprising $82.5 million of that in Australia (AFR).

Ford Ennals, chief executive of Commercial Radio and Audio (CRA), the peak body for the audio sector says: “Listeners have found it, but it’s taken a while for advertisers to respond. It should be twice the size, around $180 million, I reckon. But it’s $82 million. It’s taken a while for advertisers to grasp the scale.”

This means that whilst the podcast advertising industry has had consistent, rapid growth, it is still underutilized as a medium, with significantly fewer brands competing for attention. This gives advertisers the opportunity to command more share of ear and first move advantage against their competitors.

One of the common bugbears of radio listening is the frequent, disruptive ads, designed to grab your attention. Radio is an ideal format for creating memory structures with its audiences, opening up “mental availability” through repetition. With podcasts, typically there will be only 1-2 ad spots per episode and played at a low frequency. This is why there is marginal ad-skipping and higher brand recall.



2. Tune In VS Opt In


Imagine this scenario - you often listen to a particular radio show on your commute and you really enjoy it, plus it’s a great chance to catch the latest news headlines and weather updates. However, that morning you decide to work from home and you miss the radio show that day. You don’t want to listen to it on catch up as it will be old news by then.

That evening, you browse through your favorite streaming service to select a podcast while you cook dinner. With podcasts, there's no more waiting for—or missing—an exact time slot to hear your favorite stories. You choose a show that goes deep on a niche interest that you have. Researchers at UC San Diego’s Rady School, UCLA, and UC Berkeley found that audio messages heard while wearing headphones make a deeper and more intimate and emotional connection – and can be twice as persuasive (Next Broadcast Media).

Radio advertising is a one-to-many outlet. On the other hand, podcast ads give brands the opportunity to deliver a tailored message that's relevant to both the listener and the moment, driving valuable one-on-one connections. Listeners have around 34% more engagement on Spotify compared to traditional radio (Spotify).



3. Contextual Insight


In terrestrial radio, the tuned-in audience numbers are a bit of a mystery. For analytics, radio stations provide advertisers with a general estimate of their audience based on blanket demographics and location information. Radio measurement providers collect this data from surveys—but it's hard to know how accurate the responses are.

As new privacy changes roll out in various markets across the industry, it's crucial for businesses to tap into platforms with a robust audience understanding. As most people listen to podcasts on their phones, streaming services can gather data around what time they are most likely to log in, plus where they are (for example, in the car or at home via a smart speaker). This means that they gather signals and use them to know how to deliver a brand’s message in the right context with the right ad format. For instance, if someone is actively scrolling, they can tell that they’re engaged and serve up a video ad on the streaming service. If they can tell a consumer has been listening in the background, they’ll know that an audio ad is right for the moment. You get your ad in front of people that are relevant and interested – reducing budget wastage.

Spotify reports that context fuels great ad experiences for users, and for brands: 75% of Spotify listeners say they remember ads more when the ads recognize their moment or setting. (Spotify).



4. Cost


Radio ads costs vary largely depending on location, time of day and volume. Podcast ad costs also vary on several factors, but one thing is for sure - podcast advertising is generally cheaper. Spotify reported that advertisers spend an average of $13.70 per podcast listener—roughly a quarter of the $52.10 they’ll spend per on-air radio listener. (eMarketer). Not only does that suggest that there’s still plenty of runway for podcasting as an ad channel, it also suggests that investing in podcast ads can get more bang for your buck.



5. Futureproof your Ads


When ad spends took a hit in the pandemic, radio experienced a -17% percentage decline. Whilst this bounced back +26% in 2021, there has been a gradual decline in spend for 2022. (eMarketer). This is largely due to changing habits around working from home and commuting, plus consumers getting more familiar with and engaged in digital streaming rather than tuning into live radio. If this trend continues, podcasts could outweigh radio in popularity for the first time ever.

“Podcast listening has gone from niche to mass. Forty per cent of all Australians listen to it. When you get to half the population, that gives you real scale, and it’s the highest in the world – it’s 38 per cent in the US,” said Ford Ennals, chief executive of CRA.

This means that a move to podcast ads is one in keeping with global trends - moving to a format with headway for further growth.


Podcasting and radio can work very well together on a media plan as they serve different ends of the funnel. However, if you can only choose one option, why not go for the one with a more engaged, opted-in audience who connect intimately with the content at the time of their choosing. To find out how to harness this highly powerful medium, drop us a line.


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