US advertisers are predicted to spend $1.6 billion on digital audio ads in 2018, with a majority of spend (81.3%) going to mobile devices, according to research by WARC.
The data also shows that digital audio format targeting features have improved considerably which in turn has made the format more attractive to users. Spotify recently announced that half of its ad impressions were now being delivered programmatically.
At the same time, podcast ads are still trailing behind a little, but have been shown to offer very specific benefits for advertisers. Indeed, studies have highlighted that the format can outperform pre-roll video ads for purchase intent in 57% of cases. Additionally, 78% of US consumers are absolutely fine with podcast ads as they value being able to listen for free.
“Broadcast radio continues to be a staple for advertisers, and its share of display investment has grown in the majority of key markets, most notably China, where reach is high and CPMs are low compared to other media,” said James McDonald, Data Editor, WARC.
“In the US, advertisers are investing more in digital audio, lured by the format’s targeting capabilities on platforms such as Spotify,” he added. “Podcast sponsorship also presents an opportunity, as consumers seem willing to tolerate advertising in exchange for supporting the content they love.”
WARC also found that display ad spend from broadcast radio dropped 1.6 percentage point over the last decade due to the increase in digital audio formats.
With ever more US consumers now owning smart speakers and consuming audio content digitally, the traditional radio broadcasting market is changing swiftly.
Overall, radio ad spend reached $32 billion globally in 2017 and is expected to increase by 1.3% in 2018.