On Monday 12th November, MTM held one of our regular forums focussing on trends across the media landscape. The topic this time was the growth of digital audio advertising, and particularly the opportunities and challenges facing advertisers.
The digital audio market is growing rapidly – on average at about 20% CAGR – driven by new inventory supplies such as podcasts, devices such as home assistants, and new ad formats and products. As new entrants join, incumbents such as Global Radio and Spotify have adapted, innovating and developing as the market heats up.
This has led to a growing interest in the potential of digital audio advertising. In order to help answer some of the questions around what the future of digital audio advertising looks like, we were delighted to welcome five experts working at the forefront of this industry to share their thoughts:
Zuzanna Gierlinska – Head of Automation, Spotify Europe
David Denny – Vice President, Publicis Media Precision
Laurence Miall-d’Août – Chief Commercial Officer, Deezer
Paul Cocks – Product Strategy Lead, Google EMEA
Ryan Rummery – Commercial Digital Director, Global
The fascinating discussion ranged from discussing the current state of the digital audio market to a future-focused angle, discussing the next few years and what challenges and opportunities lie ahead.
We’ve outlined some of the key take-outs from the forum below:
Let’s Get Digital!
Beginning the forum with a discussion around the current state of industry, the panel agreed that engaging audiences in unique moments is a key differentiator of digital audio advertising. Advertisers are increasingly able to get their message in front of audiences at key moments e.g. commuting, going to the gym, cooking dinner, in the bath etc. which have previously been harder to reach.
Importantly, our panel was particularly enthused by figures which suggest the growth of digital audio isn’t coming at the expense of traditional radio listening. Instead it is helping to complement and to grow the receptive audience, increasing the availability of inventory.
Panellists were quick to highlight that the ‘closeness’ of digital audio and its ‘in-ear’ proximity also offers a great opportunity to deliver messaging to audiences in a way that feels personal and relevant.
“Audio allows you to connect with users away from screen time, it allows you to weave in and out of that customer journey throughout the day”
The panel then discussed the success that clients are seeing from digital audio advertising spend. While there are still questions over effective measurement and attribution, the rapid growth of the market suggests increasing demand amongst advertisers and audiences for digital audio.
“If you do it well, people will come back. There’s a reason why the business is growing, advertisers are returning and returning because they see the value in what’s offered”
Data Ruins the Party
Two major barriers emerged throughout the discussion:
The biggest barrier to growing digital audio advertising highlighted by the panel was measuring the impact and success of digital audio campaigns. In order to justify spend, clients need effective measurement to understand where digital audio advertising fits within a broader campaign strategy and how it complements other parts of their media plan.
“If we can’t consistently track users then it’s hard to track anything like frequency, how do you begin to feed it into your wider attribution models?”
The issue of third-party verification was highlighted as possibly the most pressing requirement within measuring the impact of digital audio advertising. Currently there’s a whole range of metrics being used to measure advertising reach and impact; clients are often forced to rely on data from media owners without independent verification. Although companies like Triton are beginning to emerge, this sub-sector of the industry is still nascent. Once third-party verification becomes more widespread, and clients can understand the impact of campaigns, our panel expect confidence in the industry to grow and accelerate spend on digital audio advertising.
Much of the discussion around digital audio advertising centred on the growth of targeted, programmatic advertising – data-supported automatic ad trading. Given the data-driven nature of user-targeted advertising, GDPR was highlighted by our panel as having been a consistent ‘thorn in the side’ of this growing industry, and one that is estimated to have set the industry back by a year or so. Advertisers had to ‘wind-down’ their targeted advertising capabilities until they knew exactly what GDPR would entail.
The panel agreed that the next ‘leap forward’ in this area will be in being able to consistently promote the same advertising across user’s audio, video and visual journeys so that you can target consumers with consistent messaging across all these channels. The panel agreed that this is an area where the industry needs to improve and has been hampered by GDPR which limited capabilities for data-driven targeting.
“GDPR probably set us back a year as an industry but we’re starting to get back on track now”
Podcasting: a star is born!
Our panel were (unsurprisingly) excited by the opportunities for digital audio advertising in podcasts, and the growth of the podcast industry more generally. The increase in time spent listening to podcasts internationally was seen as a huge opportunity for the industry, particularly as this behaviour has so far been seen to complement traditional audio listening rather than replace it.
“The appetite and enthusiasm for podcasts is phenomenon, what’s interesting is that we don’t see podcasts eating into consumers other audio listening time”
Within the digital audio advertising markets, podcasts were an area which was felt to be particularly nascent with phenomenal potential for growth. Currently though, our panel felt as though the industry still needed to understand what the best ad-experience is with podcasts without harming the user-experience. Whether that’s sponsorship or dynamic ad-insertion, podcasts will play a huge part in any digital audio advertising campaigns going forward and will be a fascinating area to follow.
It’s an exciting time for the digital audio market, particularly from an advertising perspective and it was a pleasure to be able to hold this fascinating forum on the state and future of the industry.
If you would like to discuss our forum or any of the topics outlined above, do not hesitate to get in touch.