As with everything to do with online digital entertainment it’s important to understand who your audience is and what their habits are. In a study conducted by GroupM Nexus and the Interactive Advertising Bureau Europe, the teams joined forces to better understand the landscape surrounding ad spend and online entertainment as a whole so that future advertisers have a better understanding of how to market their client’s products and services.
There’s no denying by this point that audio content is a force to be reckoned with, with ever-growing numbers of people tuning in to their favorite podcasts weekly while they go about their daily commute or hit the gym.
The ease of tuning into audio content encourages users to opt for podcasts as a key way to consume content and intake information. Of course, it was only a matter of time before advertisers and agencies caught on to this trend. Many are now opting to increase their advertising spend for audio content over the next couple of years.
To get a better understanding of the growing audio landscape, we’ll be taking a look at the results of the report and highlighting some of the key takeaways which serve as valuable information for creators and marketers alike.
New Report Shows That 60% Of Audio Adspend In Europe Is Allocated To Podcasts
The 2023 Programmatic Audio Report was compiled by GroupM and the Interactive Advertising Bureau Europe to determine current investment levels, growth drivers, barriers, and opportunities within digital audio advertising in Europe.
The survey leveraged the national IAB network in Europe and received 549 buy- and sell-side responses from 29 markets between May and June 2023.
GroupM, which is comprised of two of the top global media agencies, provides media strategy, creative and technology-enabled services. The Interactive Advertising Bureau Europe (IAB Europe) is the European-level association for the digital marketing and advertising ecosystem. Members of IAB Europe include media, technology, and marketing companies and national IABs
Participants in the survey included agencies (50%), advertisers (30%), and publisher/media owners (20%). The survey received 548 responses from buyers and sellers located across 28 countries.
According to a new survey by WPP media investment company GroupM Nexus, more than half (58%) of buyers’ digital audio advertising budget is directed towards investing in podcasts.
The survey, titled the Europe Digital Audio Advertising Report 2023, was created in partnership with the Interactive Advertising Bureau (IAB) in Europe. highlights the evolution of digital audio advertising in the region. The report features data derived from a survey conducted by GroupM Nexus through the national IAB network in Europe. This survey included 549 buy and sell-side responses across 29 markets between May and June 2023.
Key takeaways from the survey include:
- Buyers are allocating budgets to include a wider range of audio formats beyond traditional audio channels.
- The most popular audio formats include streaming and podcasts (59%); online radio (57%); on-demand (40%)
- Publishers are realizing increased revenues and opportunities for ad selling within podcasting.
- More ads (68%) have been sold on podcasts than on any other medium.
- Streaming ads generated 46% of ads sold.
According to IAB Europe chief economist Daniel Knapp, “The pandemic served as a cyclical catalyst for digital audio, particularly podcasts, due to a rise in consumption.” However, structural enhancements like improved measurement, simplified buying and automation continue to advance the market.”
“The advertising industry’s emphasis on attention in a screen saturated media environment, quality of reach and brand safety positions digital audio as a promising investment channel for advertisers and a potent platform for publishers to exploit context.”
According to Knapp noted the IAB anticipates that the European digital audio market will surpass the €1 billion mark by 2025, approximately a 23% increase from where it was in 2022. Knapp also highlighted the results of the IAB Europe AdEx Benchmark study, which measures ad spend for display, audio, social, and video, that showed digital audio had outpaced all other advertising channels in the region from 2018 to 2022 in terms of compound annual growth rate.
The survey identifies advertisers’ and agencies’ top three drivers for investing in audio. This includes enhancing wider media plans, raising brand awareness, and reaching targeted audiences. Reaching wider audiences and increasing engagement in the future will be realized through the use of intelligent speaker interactive ads and dynamic audio ads which are part of the latest wave of innovations within the digital audio advertising space.
Concerns highlighted in the survey included measurement capabilities, brand safety, fraud, and transparency. To identify and fix these issues, advertisers have begun partnering with companies like Barometer which utilize artificial intelligence to scan episode transcripts and label the risk level of podcasts.
Looking towards the future, most buyers (74%) and publishers (64%) indicated plans to invest more in digital audio due to greater opportunities for investment over the next 18-24 months.
- Enhancing Wider Media Plans
Our findings indicate that 65% of European buyers consider audio’s ability to enhance wider media plans as the top driver for investment, highlighting the crucial role digital audio advertising plays in the broader marketing mix, thereby solidifying its position as a strategic tool for capturing audience attention.
- Rising Investment in Digital Audio
The remarkable surge in interest surrounding digital audio advertising is highlighted in the report. The report notes that two-thirds (66%) of media buyers surveyed indicated their intention to invest more in digital audio within the next 12 months.
- Diverse Formats and Channels
The increase in digital audio formats and channels has captured marketers’ attention and is changing the marketing investment mix. Podcasts, online radio, and streaming, which cater to diverse audience preferences and consumption habits, lead the way as preferred ad formats.
- Optimism in Digital Audio Advertising
Digital marketers and creators alike are optimistic about the future of podcasts and where audio advertising leads to. A whopping 76% of advertising agencies are forecasted to increase their ad investment in podcasts over the next two years. This is a testament to the new form of advertisement effectiveness, especially when it comes to brand messaging that is more intricate and complex.
- Key Drivers for Digital Audio Spend
The study further highlights the reasons for increased audio ad spending. Some of the main factors are enhanced reach, new and improved messaging techniques such as dynamic advertising optimizations, and effective targeting.
- Mobile Audio: A Valuable Opportunity
An impressive 7 out of 10 marketers that participated in the survey stated that they are anticipating a rise in audio advertisements via smartphone devices because it offers an excellent opportunity for brands to engage with their audiences sporadically throughout the day.
Link to the Report
The “2023 Programmatic Audio Report” by GroupM and IAB Europe can be found on their website, along with other interesting studies, research reports, and blogs that share interesting insights into upcoming social media trends, data, platform-specific news, and strategies.