How marketers can capitalise on the growth of digital audio

The 2023 IAB Australia Audio Summit took stock of the streaming and podcast advertising market in Australia, showcasing the findings of the recent Audio Advertising State of the Nation report as well as case studies from BWS, Audible, SCA and Budget Direct. 

The half-day session ended with a panel titled Ways for Marketers to Make the Most of Digital Audio Opportunities, moderated by Stephanie Famolaro, senior director of business development at The Trade Desk. 

Featuring panellists Julian Ho (APAC head of commercialisation at YouTube), Zac Selby (national programmatic solutions lead at Dentsu) and Matthew Waldbauer (senior manager of global partnerships at Soundcloud), the discussion covered the reasons behind the growth of digital audio advertising, the barriers to investment for brands and the future of the industry. 

Famolaro: According to the State of the Nation report, 75% of media agencies now have streaming digital audio advertising as a regular part of their activity, while 70% of media agencies included podcast advertising as a regular part of their activity. Why do you think we're seeing all this growth in the last year?

Ho: “There's been tremendous growth in the quality and the volume of content available to us. The other thing is a lot on the younger generation gravitating towards audio. Podcasts have been growing tremendously, but also music streaming.  

“A lot of our younger generation are native listeners - they've always got headphones in, so there's always an opportunity to reach these users. I think advertisers and agencies understand that and that's where the value is starting to shift.” 

Selby: “The channels have a growth of consumption - a lot of that's based on the nature of the channel itself. Wireless headphones you can use while multitasking, so it’s quite easy to consume.  

“But then from an investment perspective, advertisers have a clear state of mind where audio plays primarily in that upper funnel, so planning teams and agencies are planning audio, alongside other channels, and seeing those competitive CPMs and more frequently tapping into it.  

“I think, importantly as well, the networks now really understand the digital offering and are recommending it more.” 

Waldbauer: “Over the past 10 years, streaming particularly has had the benefit of having the disruption of the music industry really be a catalyst of the growth that we've seen. I think brands really leaned into that and recognized this wasn't going anywhere – it was here to stay.  

“Platforms like SoundCloud have had the benefit of having that and having brands come to the platform just because we've had such natural growth. And then that lights a fire underneath all of us to really just adapt to it to build new products and measurement tools for our brands and advertisers alike.” 

Famolaro: The report showed that 82% of agencies are intending to buy audio programmatically in the next year - this is up 64% for the previous year - so it's clearly the fastest growing buying method. Why do you think this is? 

Selby: “It’s just a by-product of digital growing; more and more of the digital supply slowly becoming programmatically available and then also that supply is more intertwined and integrated with buying platforms.  

“From there, when there is the programmatic opportunity, people tend to tap into that for the benefits. There's the addressability and omni-channel benefits. There's the investment benefits with flexible budgets, but probably the key one is accountability - the ability to place a pixel on the site, report an attribution, measure ROI and justify the investment in the channel is probably the key reason that programmatic is increasing.” 

Famolaro: What do you want planners to be considering when buying audio? 

Ho: “Context is king and relevancy really matters. When folks are listening to audio content, they tend to be paying more attention, even if they are doing other things. Audio allows us to understand a user's state of mind, much better than other formats.  

“The second thing is multiformat strategy. Audio works well as a standalone format, but even better as a supplemental or complementary format. The ability to surround the user and engage across multiple surfaces I think is very, very powerful.  

“Going back to context, being able to reach a user who's interested in sneakers while they're doing the dishes is one thing. Being able to reach that same user who is running on a treadmill is a completely different, and arguably a much better outcome.  

"Bringing those two together, in addition to a video campaign that can drive a story and a narrative, is very powerful.” 

Famolaro: What can publishers be doing more to challenge the status quo? 

Ho: “We've heard that measurement and data is incredibly important and I think one of the obstacles to a lot of advertisers buying audio is the ability to standardise the measurement and data and ROI across all devices.  

“The first thing would be to make it easier to understand the ROI and effectiveness of audio ads. The second piece is around packaging - publishers understand their content better than anyone, and by extension their audience, and the ability to segment and package content, based on relevancy and category will really help advertisers reach their intended audiences.” 

Famolaro: Some of the top barriers to further investment into audio were identified in the report as lack of measurement and tracking metrics, lack of evidence of effectiveness and lack of addressability - what are some of the initiatives that the industry could take to address some of these challenges and ultimately make it easy up for buyers to activate on audio advertising? 

Ho: “Measurement and data already exist across the industry, so I think it's really a question of standardising and baselining and exposing the effectiveness of audio ads across the board. Whether this be by case studies or whether it's by standardisation, we should all be playing our part in trying to drive home the effectiveness.” 

Selby: “From an addressability and targeting standpoint, I don't really see too much of the concern - we look at audio, it’s slightly behind compared to their digital channel counterparts at the moment, but when we fast forward 12 months when cookies are gone, audio is largely contextual, all first party data, with logged in users, so they'll probably become the gold standard in doing the right thing.” 

Waldbauer: “Standardising these measurement solutions to work with first party cookies and first party registration data is going to be crucial in that sense, because it does take a little bit longer, but in the long term, that's really valuable data that audio platforms do already and always have had to offer to advertisers"

Famolaro: What do you see as the future trends? What are you excited about? What do you hope that we're discussing in one year's time from now?  

Selby: “I'm sure it's been said on an audio panel before but I think smart speakers are quite interesting. From an awareness perspective, there might be a lot of co-listening and it might be an incremental reach channel and it might become a strong performance and eCommerce channel as well.” 

Waldbauer: “Something I've been thinking a lot about since I started at Soundcloud is having creators and content userscreating partnerships with the brands directly. Having them get paid really shows a value to the brands and the creator alike; it becomes a true partnership.  

“Seeing how we can build on that from an audio perspective, from an event perspective and original video content. When you're reaching users in a multi format perspective, we see a lot of value and that leads into the measurement and the brand's ROI as well.” 

Ho: “I think there's tremendous opportunity around screenless devices, smart home speakers and the like. Obviously one of the barriers with smart home devices is an increased perception of invasion of privacy.  

“When you're asking the weather, you don't expect to hear an ad at the same time, but when you're listening to music through a playlist, I think that that's a viable means. The other thing that I'm actually super excited about is digital dynamic, creative work. I'd love to see more examples of that across the industry as I think it's incredibly powerful.”