Loud and clear: Audio marketing investments gathering pace says IAB

As media agencies look for newer and more viable means to target consumers, advertising across digital audio platforms is rapidly emerging—and maturing—as one such viable option. IAB’s Audio Advertising State of the Nation Report, released today at the IAB Australia Audio Summit reveals that nine of 10 media buyers are placing ads in streaming services and three-quarters are embracing podcasts (up from 63% in 2018). 

The report, which is in its fourth year, also found that brand awareness is the main driver for the audio market growth, particularly for podcast advertising with 48% of agencies using podcasts primarily for branding, an increase from 35% in 2018. As marketers move from experimentation to deeper investments, podcasts are seeing the sharpest spike in interest, followed by digital broadcasting radio (DAB), even as interest in other audio formats stalls or stumbles. 

As advertisers increase their investment more focus is being paid to the metrics that are being used to measure success. Reach, frequency and completion are the most common metrics for both streaming and podcasts, though agencies are more confident in measuring these metrics for streaming audio compared to podcasts.

“It’s clear the market has evolved from experimentation into a more strategically driven brand building approach to digital audio advertising, reflecting the growing consumer consumption of audio formats, particularly podcasting," Gai Le Roy, CEO of IAB Australia, said in a release. As marketers and agencies get serious about their investments, they are turning away from old methods such as spot buys towards more programmatic purchases. 

However, despite the increased interest and investment in Audio, media agencies' level of satisfaction remains flat to down across the board. Creative was identified by the report as one of audio advertising’s greatest strengths and also one of its greatest challenges. The ease and speed of audio creative development has proven to be a great attraction for agencies, however only 17% of media agencies are consistently tailoring their creative to suit the different audio environments, which is vital when creative is the most important element of campaign impact. Although brand awareness is the number one objective of audio advertising, only one-third of the buy-side are tracking these metrics and only 25% are tracking sales.

Audio continues to be seen a ‘safe’ media to use for advertising compared to other media. Media agencies perceive brand safety is less of a concern for audio formats compared to other media options. Brand safety concern around podcasts has reduced year on year—in 2018 27% of agencies were more concerned about podcast safety than other media options, this has reduced to 21% of agencies in 2019.

The Audio Advertising State of the Nation Report was supported by 18 media and tech companies, as well as industry body Commercial Radio Australia. Fieldwork was conducted by independent research company Hoop Group in December 2019 with more than 250 respondents.

Richard Palmer, co-chair of the IAB Audio Council and Director of Market Development at Triton Digital said: “Over the next twelve months we anticipate the industry will come to understand the need to move from repurposing existing ads and instead look to produce creative campaigns tailored to suit the environment in which it appears.”

Despite his optimism, agencies are yet not fully sure of the way forward with audio advertising. While 15% of respondents said they had pieced together a voice marketing strategy in 2019 (compared to 9% in 2018), the number who planned to do so in 2020 and beyond fell, while those who were unsure of their plans rose.