More than half (58%) of buyers’ digital audio advertising budget is going towards investing in podcasts, according to a new survey by WPP media investment company GroupM Nexus.
The survey, titled the Europe Digital Audio Advertising Report 2023, is created in partnership with the Interactive Advertising Bureau (IAB) in Europe and highlights the evolution of digital audio advertising in the region. Data featured in the report was derived from a survey that GroupM Nexus conducted through the national IAB network in Europe, which included 549 buy and sell-side responses across 29 markets between May and June 2023.
According to the survey, buyers are investing their budget in a wider variety of audio formats which go beyond traditional audio channels, with the most popular being streaming and podcasts at 59%, followed by online radio at 57% and on-demand at 40%. Similarly on the seller side, publishers also see a great opportunity within podcasting with more ads being sold on podcasts than any other medium (68%), followed by streaming at 46%.
“The pandemic served as a cyclical catalyst for digital audio, particularly podcasts, due to a rise in consumption,” said IAB Europe chief economist Daniel Knapp. “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.”
Knapp added that the IAB projects the European digital audio market to surpass the €1 billion mark by 2025, which is almost a 23% increase from where it was in 2022. He also highlighted that digital audio had outpaced all other advertising channels in the region from 2018 to 2022 in terms of compound annual growth rate, according to IAB Europe’s AdEx Benchmark study, which currently measures ad spend for display, audio, social, and video.
According to the survey, advertisers and agencies’ top three drivers for investing in audio advertisers are enhancing their wider media plans, raising brand awareness, and reaching targeted audiences. Innovation within the digital audio advertising space with the introduction of smart speaker interactive ads and dynamic audio ads can also do more to reach wider audiences and increase engagement in the future.
The survey highlighted that podcasts can also be challenging for buyers as one of the major concerns is measurement capabilities, followed by brand safety, fraud, and transparency. A number of advertisers have started to partner with companies like Barometer which use artificial intelligence to identify and fix some of these issues by scanning episode transcripts and labelling the risk level of shows.
In terms of the future, the survey highlighted that the majority of both buyers (74%) and publishers (64%) plan to invest more in digital audio as they see more opportunities for investment in the space over the next 18-24 months.
“Audio is a channel buzzing with opportunity as buyers and publishers expect notable growth in the near future,” said Harry Harcus, EMEA CEO of GroupM Nexus company Xaxis. “As a medium that reaches highly engaged audiences at moments when its more visual counterparts cannot, audio is capable of complementing buyers’ wider plans and publishers’ media offerings.”
“Advancing the technologies that enable audio advertising unlocks cross-channel optimisation and performance for buyers, making audio inventory even more attractive and driving revenue for publishers.”