Amy Dasciano, Molly Cross and Natalie Murray.
The latest SMI numbers show that advertising demand for digital audio has soared 17.4%, but media agencies say they’re still seeing demand for advertising on commercial broadcast radio.
The latest data from IAB Australia shows online audio advertising revenue was up by 16.2% to $79 million in the September quarter.
Yango’s investment lead, Natalie Murray, said there’s been a shift towards digital audio and streaming over the last two years, and with its growing audiences and targeting capabilities, more clients are open to including it in their channel mix.
“We often see our clients using a mix of digital and traditional radio,” she said.
“Digital offers more flexibility in targeting, while traditional radio still has a role in driving that broad reach, and the ability to leverage on-station talent to build reputation in a bespoke way is desirable for brands.”
The Media Store’s senior trading manager, Mollie Cross, said across her agency’s client mix, there’s no significant migration in spends in either direction at present, with both traditional and digital audio continuing to hold positions in the early part of the year.
“That said, the overall market continues to trade short-term, as marketers hold funds back funds as they consider the impact of fluctuations in confidence and an increasingly challenging consumer landscape,” she told AdNews.
“This strategy benefits those channels with short-term avails and easy to produce assets; favouring audio formats over linear TV where inventory continues to be limited within the short-term, despite the medium to long-term continuing to be weaker than previous years.”
Enigma’s GM of media, Amy Dascanio, said the significant shifts in audio listening are not confined to traditional radio but reflect broader changes in audience behaviour across all channels, including digital.
“No platform has the luxury of standing still,” she said.
“These trends reflect what is happening in screen environments like CTV, BVOD, and linear TV, where consumers increasingly prefer on-demand and personalised experiences, and this is no different across the audio platforms of music, radio, and podcasts.”
Dascanio said that the digital evolution has been pivotal to audio growth, with radio networks introducing their own integrated solutions, such as iHeartRadio and LiSTNR, to unify and expand their audience reach and engagement.
Related to this, weekly streaming across commercial radio now reaches nearly 3.6 million listeners, and podcast listenership has grown by 42% over the past two years, according to the latest CRA report.
The Australian Internet Advertising Revenue Report (IARR), compiled by PwC, also reported podcast audio advertising expenditure as the fastest-growing format, climbing 26.5% to $31.4 million. Podcasts now account for 40% of total online audio ad spend.
Streaming also saw an uptick, earning $47.6 million and further emphasising the sector’s rising audience and influence, accounting for 60% of online audio advertising.
Commercial radio listenership rising
The latest numbers from CRA showed that commercial radio continues to reach a weekly audience of 12.3 million, with share of listening reaching 75.3%, the highest it has been in a decade.
Nearly half (49.9%) of commercial radio’s audience is now under 40 too.
Cross said radio continues to make sense for advertising, so long as it’s being considered for the right reasons.
“It all comes back to the perfect balance of alignment to campaign objective, audience alignment and measure of success,” she said.
“Radio can still work for most campaigns; especially for those brands willing to branch out beyond antiquated demographic targeting.”
Cross said that while utilisation of mass, trusted mediums may be ‘traditional’, they still perform a key function in driving a balance of short-term effectiveness with robust recall that builds brands.
“In a time of so much fragmentation in the digital sphere, with distrust increasingly on the rise, trusted channels and voices become increasingly powerful,” she said.
Dascanio said although consistent year-on-year declines in radio ad expenditure as indicated by SMI cannot be ignored, the rate of decline has slowed.
“For example, the drop was 3.6% from 2023 to 2024, compared to -6.4% from 2022 to 2023,” she said.
“Early SMI figures for December also show that radio experienced the lowest ad market declines for the month, which for a core retail period isn’t surprising to see investment being skewed back into radio.”
Dascanio said that traditional radio remains a powerful component of the advertising mix, capable of reaching large audiences effectively.
“Its superpower is promoting campaigns that have a direct call to action or building on that purchasing mindset, where cost effective reach and frequency is needed,” she told AdNews.
“Ultimately, success centres on targeting the right audience at the right moment, with the right message and radio can deliver on this and cut through the clutter.”
Murray said traditional radio still makes a lot of sense., as it’s not about one replacing the other but finding the right balance.
“People who listen to FM/AM radio tend to be very loyal to their stations and its talent, and it's a great way to drive reach for advertisers,” she said.
“We find it very effective in driving action for more of our performance-based clients. It also has good geographical coverage and is particularly strong when targeting specific areas in regional areas. “
State of the market
Murray said that the Australian audio advertising market is looking “pretty strong” to kick off the year, with both podcasts and streaming audio are the major drivers of this growth.
“I’d expect to see advertising revenue’s grow in line with this,” she told AdNews.
“Commercial radio in Australia remains a significant player in the advertising landscape, though it will continue to face challenges from the rise of digital platforms and increased competition.”
CRA’s Australian Podcast Report for 2024 found that with a 37% increase in listenership over the last two years, podcasts engage on average nearly 6 million weekly listeners.
Cross said that while The Media Store continues to see short trading across the audio market, there is improvement versus the start of 2024.
“With elections on the horizon, there is more proactivity to be in market across Q1; with a challenging Q2 ahead for those who continue to bank on short-termism to unlock efficiencies while still expecting to deliver campaigns in full,” she said.
“For digital audio, the expectation of rate declines across digital video formats in 2025 will drive a need for audio suppliers to follow suit, if they hope to remain competitive.”
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.