As the audio landscape continues to grow in popularity, podcast advertising has emerged as a powerful and effective medium for reaching audiences in a personalised and engaging manner. Digital audio remains a powerful brand builder, with seven in 10 agencies saying that it is effective at increasing brand awareness. To gain a deeper understanding of the current state of audio advertising, the Interactive Advertising Bureau (IAB) recently released its highly anticipated Audio Advertising State of the Nation Report 2023. Find out why agencies plan to increase investment in podcast ads, how it is being bought in omnichannel plans and what the challenges are for wider adaptation. We will explore the key insights and trends highlighted in the report, shedding light on the exciting opportunities that lie ahead in the podcast advertising in 2023.
Podcast advertising on the rise with media buyers
Despite greater economic uncertainty looming, agencies intend to increase expenditure in digital audio formats this year. As podcasts have grown in popularity and content volume, consideration of podcast advertising in agencies has increased significantly year on year. The study found that 70% of agencies consider podcast advertising, up from 59% in 2020.
The report noted that 71% of media agencies intend to increase their investment in streaming audio in 2023 and 78% intend to increase investment in podcast advertising. It comes just two days after the release of the IAB Online Advertising Expenditure Report which found digital audio revenue reached $221.2m for CY22.
Amongst media agencies, advertisers explained the appeal of podcast advertising over other channel options is due to “contextual advertising” and “highly engaging content that is most often listened to in a 1-1 capacity.” 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.
Director of Research of IAB Australia, Natalie Stanbury, says, “This years’ Report shows that brand and advertisers see the effectiveness of digital audio for engagement and reach. 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.”
Programmatic, bundled buys on the rise
“Audio works well as a stand-alone format, but even better as a supplemental or complementary format,” says Julian Ho, head of YouTube content and music monetization in APAC (The Current).
Agencies continue to buy audio advertising programmatically, with 82% intending to purchase programmatic audio in the next year. This is a large increase from 64% in 2022. Intention to buy bundled with other media has also increased significantly this year, to 60% (from 51% last year).
iAB CEO, Gai Le Roy, says, “One of the most pleasing results in the study is the marked increase in planning and buying audio in combination with other digital activity. There is great potential for digital audio to increase its share of the digital ad pie with eight in ten agencies who use digital audio now considering its use alongside digital video as well as the increase in omni-channel programmatic buying.”
Challenges for advertisers
Amongst media agencies, the amount of challenges with podcast advertising have reduced over time, indicating that they are understanding and utilising the channel more and more. However, respondents identified three key areas holding back audio advertising being a larger proportion of ad volume. Brands and advertisers noted their main issues as developing compelling creative and a lack of understanding across all formats, while industry noted measurement and standardised metrics as an opportunity for improvement.
This ambiguity around measurement is what propelled us to utilise an audio attribution solution to enable our clients to accurately track and measure podcast ad performance. Veritonic’s end-to-end measurement and analytics capabilities allow us to gain actionable insights that furthers the ROI on advertising dollars.This holistic picture of how our client’s audio is performing and the actions it’s driving enables us to truly understand, optimize, and maximize the performance and ROI of our podcast advertising.
Veritonic’s suite of Campaign Performance tools also includes Brand Lift and Attribution, which enables brands to understand the impact of their audio creative across any app, hosting platform, or listening device. The solution allows users to glean actionable insights on how audio is driving action on a given landing page, including site visits, cart activity, transaction data, and more. The attribution data can also be enhanced with benchmarks, norms, and unparalleled second-by-second engagement and brand lift data to provide the industry’s most comprehensive set of lifecycle audio measurement analytics available today.
What’s next for 2023?
The future of podcasting is lively and filled with innovation and potential. 2022 should have been a slow year for the industry, with rising interest rates meaning tightened budgets and a majority of the population returning to the office in some capacity, meaning less time for entertainment. 2023 had brought several economic challenges to the industry due to interest rate rises and increased cost of living. However, podcasts have evolved to become hubs for global conversations on many varied issues with voices spanning to all corners of the world and across all social groups. It’s through those conversations that we can keep up that feeling of connectedness and belonging, regardless of borders or boundaries, lockdowns or recession. We predict that 2023 will continue to be the biggest year yet for podcasting, as innovation and more data allows us to get further insights on the attention sweet spot and how best to entertain and inform audiences, through both podcast content and ads. As we get better at measuring the impact of podcast ads, we’ll see increased ROI at a time when each dollar needs to go further.
For more analysis, insights, and commentary on the growing podcast industry,sign up to our newsletter or feel free to contact us anytime.
The Audio Advertising State of the Nation Report is a collaborative industry project, supported by 15 different media and tech companies, as well as industry body Commercial Radio and Audio. Fieldwork was conducted by independent research company Hoop Group across December 2022 and January 2022 with 249 survey responses collected.