Audio Advertising: Basics of Digital Audio Ads

The popularity of podcast platforms has fluctuated since the pandemic, although it has demonstrated rapid growth recently. Following the digital audio advertising trends, businesses began to allot budgets to digital channels, namely, streaming services.

This has proven to be an effective strategy since they received 37% more profits in 2020 compared to the previous year.

In 2021, the audio advertising market in the US grew twice as fast as the overall digital advertising market. It demonstrated a 72% increase to $1.45 billion when the overall market enhanced by only 35% – PwC & IAB Internet Advertising Revenue Report. The IAB states that, in the next two years, audio advertising will demonstrate the same growth as it had in the last decade. In such a way, according to the estimation of the Statista Research Department, the audio ads spending are to increase from $5.92 billion in 2021 to $10.01 billion worldwide in 2027. Hence, audio advertisement is a promising digital marketing tool, which creates remarkable opportunities for businesses.

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What is Audio Advertising?

Digital audio advertising is the automated sale and insertion of ads into audio content through online streaming platforms, such as podcasts or music streaming apps, e.g. Spotify, Apple Podcasts, Pandora, etc. This audio content can be broadcasted on different devices: smartphones, smart speakers, desktop computers, and Smart TV.

Based on the general principles of digital advertising, audio ads also allow for targeting certain audiences and geolocation. However, advertising in audio can sometimes be even more effective than other types of media advertising. Keep reading to find the reason.

Why are Digital Audio Ads Effective?

Audio content is the most engaging. According to IAB, two-thirds of people listen to a podcast with their full attention. Podcasts gather a community of listeners with similar interests, mood, and sense of humor, that independently choose the topic and are happy to get engaged in it. Therefore, high-quality and well-targeted audio advertising is perceived organically and encourages action.

Spotify Research found that, after listening to an episode, 81% of listeners took some action, namely searched for the product online, connected with the brand on social media, or discussed it with others. Moreover, respondents say that they are happy with a relevant ad because it creates a small break from focusing on a single topic.

Types of Digital Audio Advertising Solutions

Digital audio advertising works on the same principles as display advertising, requiring you to set up a campaign for targeting and choose the format that best fits your campaign goals. Here are the most popular formats:

Linear Audio Ads. According to the period of launch in audio marketing content, it can be qualified as pre-roll, mid-roll, or post-roll. Usually, Linear Audio Advertisements last for 15, 30, or 60 seconds and have no visual effects. Besides, the customer cannot skip it.

Audio Ad Pods. This type of audio ad includes several recorded advertising tracks that are united by a common story and follow one another. Marketers apply it to increase brand awareness.

Skippable Ads. Skippable ads have much in common with the first type, namely Linear Audio Advertisements, although in this case, the customer can close the ad before it ends. It is a great opportunity for advertisers to experiment with content and understand what resonates best with their audience.

Companion Display Ads appear with audio ads and provide an opportunity for the customer to click on them and navigate to the site while it plays.

Rewarded Audio. The user is invited to listen to ads in exchange for a reward in the app or service. Even though such ads usually have a video format, audio also works well. It’s also important to keep in mind that native advertising is also an effective tool. When the podcast host reads the advertiser’s text during the broadcast, the customers perceive it even more organically. In such a case, we consider DAI (dynamic ad insertion), which is a server-side video ad technology that allows inserting video ads into live linear programming and video-on-demand content, that inserts the advertiser’s announcement into ready-made audio products. Brands do value native advertising and podcasters as thought leaders. DAI’s rapid growth indicates its effectiveness and high demand among marketers. The technology allows you to target customer segments according to their listening habits, interests, geographic location, and, even, mood. All leading audio platforms, including Spotify, iHeartMedia, and Pandora, offer such a targeting.

Examples of Audio Ads

Pizza Hut

Using precise demographic and interest targeting in Spotify Ad Studio, Pizza Hut placed ads among audio content that addresses parents, gamers, and sports fans. The brand managed to succeed and capture the attention of the target audience competing with other media advertisers, so the campaign performed well. Orienting on Spotify’s CTR benchmark of 0.06%, Pizza Hut managed to reach 0.23% CTR in the segment of sports fans, and 0.57% CTR in the parents and gamers segment.

Learn more and listen to the audio ads on the Spotify website.  

Primark

After mitigation of the strict quarantine in the UK in 2020, womenswear brand Primark was once again ready to open its doors. To attract customers after a long pause, the company identified a target audience, formed the advertising message, and used precise targeting by geo and interests. Primark’s campaign also beat the benchmark and achieved an impressive 1.65% CTR.

Learn more and listen to the audio ads on the Spotify website.  

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How to Make Audio Advertisement

Spotify streaming service is interested in cooperation with the advertisers and supports them in creating advertising content. The company has published a guide on how to run audio ads, and here are its main tips:

1. Focus on one key message.
2. Use short, simple sentences.
3. Do not try to include too much information in the audio recording: the optimal number of words for a 30-second clip is 60-65.
4. Use background sounds to immerse the listener in the content and create the right mood.
5. Mention your brand or make hints about it.
6. End the audio ad with a call to action.

Traditional Radio vs. Audio Ads

Despite the fact that streaming audio advertising and the radio ads have a similar format, they still vary considerably:

• Buying radio ad time is always limited by stations, shows, and time slots;
• The effectiveness of radio advertising is more difficult to track;
• Digital advertising is more flexible and versatile: you don’t need to compete for prime time, as users can broadcast audio whenever they want;
• Digital audio advertising allows brands to choose specific artists or themes of podcasts that resonate with the interests of their target audience. In addition, it enables more personalized ads;
• Audio advertising in streaming services is more informal, which is usually “closer” to the user.

Benefits of Audio Advertising

1. Precise targeting. We would like to emphasize this advantage one more time. Detailed targeting improves the Return on ad spend (ROAS) metric.
2. High conversion. According to Nielsen Research Company, listeners prefer audio ads compared to display ads. In addition, the customers remember audio ads 24% better than media advertising, which increases purchase intent by two times.
3. Lower price. Digital advertising has a lower cost compared to traditional radio advertising. Besides, advertisers can easily track the listens to campaign cost ratio. Digital audio ads allow advertisers to implement flights more effectively.

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“In the next two years, the podcast niche will grow like yeast. Listeners have proven that even when working from home, podcasts are their preferred type of media content. And advertisers benefit from new technologies and have the resource to make podcast advertising even more personalized and precisely targeted, and its results are even more measurable than ever before”.    Erick John, IAB Media Center Vice President

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Audio Advertising Metrics

KPIs of audio advertising have much in common with the media advertising metrics.

1. Audio Reach. One of the main KPIs in digital audio advertising is Audio Reach, which indicates the number of unique users who heard the ad. Listen through Rate also allows you to estimate the effective reach. LTR is the ratio of users who fully listened to an audio ad to the total number of users for whom it was played. The benchmark of the US market is 94%. To get such a result, audio ads need to have high sound quality, and targeting needs to be not too broad.‍
2. ‍Audio Advertisement Conversion Rate. Audio advertising also has a click-through rate (CTR), which is applied to audio ads with accompanying banners. The CTR benchmark set by Spotify audio ads is 0.06%.

Even though audio advertisement is still not as popular as other digital marketing tools, the marketers of Primark and Pizza Hut have already managed to reach impressive results due to it. If you also want to become one of the pioneers to implement audio ads to your marketing plan, just contact us.

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