How is digital audio evolving? And what does it mean for advertisers?

19 May 2021

Released last month, IAB UK’s 2020 Digital Adspend report includes digital audio for the first time, a move that reflects the growing prominence of audio within the digital landscape. The results show that the overall market grew by 17% year-on-year to a total of £103.7 million, including podcast spend which rocketed by a massive 43%.

Meanwhile, an IAB UK/YouGov survey sheds more light on how listener behaviour has changed over the past year. Of those who already listen to online audio, 66% have listened to podcasts more since the start of the pandemic, while 54% have streamed music more. Why? Relaxation, entertainment and “keeping me company” rate most highly among driving factors. So what does all this mean for advertisers looking to enter the audio space? Members of the IAB UK Audio Group give their views on changing trends and emerging opportunities.

Digital audio spend grew at 17% YOY, do you expect it to continue to rise at this rate?

Faye McDowall, head of Dax strategy, Dax: “Yes, digital audio has truly secured its place on the media plan. Advertisers have embraced how audio adapts to the changes in our daily lives and many brands are just starting to leverage the power of the media. Advertisers are taking advantage of more great content combined with targeting and measurement capabilities across streaming and podcasts. In recent months, we’ve also seen brands embrace onboarding first-party data in a privacy safe way, using audio to drive to smart speaker purchases and generate influence through podcasts.”

Why do you think we saw such strong investment into podcasting in 2020?

Ruth Fitzsimons, managing director, Podfront UK: “IAB UK and YouGov’s study shows that podcasts can effectively reach audiences at home and those fans plan to keep podcasting as a part of their new normal. What’s more, our podcasts have evolved over 2020 with new formats, from wellness to narrative fiction, coming to the fore. Perhaps this explains why 39% of audiences see podcasting as a unique form of entertainment.”

How did podcasting listening habits change in the pandemic? How will these habits evolve as we come out of lockdown?

Mike Newman, head of UK content partnerships, Audioboom: "The common perception was that podcast listening was intrinsically linked to the commute, so when the commute went away and podcast listening actually grew, it underlined the passion listeners have for podcasts. People have carved out different parts of their day to get their podcast fix - listening shifted later in the day for example - and so whatever the new normal is, listeners will continue to make room for podcasts in their lives."

How are brands using podcast advertising effectively? Can you give an example of a stand-out campaign?

Jack Preston, director of Acast Creative UK & US: “At Acast, we saw a 51% increase in listeners across our network in 2020, as well as increasingly creative executions. Our in-house creative ad solutions team delivered a 250% increase in revenue from branded content in 2020 and we’ve just introduced Sponsored Stories, giving brands longer spots with high production value, greater share of voice and the chance to work with top podcasters. The Department of Education has used this format to promote its ‘Get Into Teaching’ programme - collaborating with The Guardian’s Football Weekly podcast with the hosts talking to teachers about why it’s such a rewarding profession. This has led to more than 70% of the target audience agreeing that teaching is a career for them.”

How do you think smart speakers impacted audio listening at home in 2020?

Michael Buckley, director of sales, Spotify: “Time at home brought with it new routines, and on Spotify we saw this reflected in where people listen. For example, listening at home on smart speakers, gaming consoles, and connected devices increased significantly. We also saw advertisers, such as cosmetics brand NARS, leverage the increase in smart speaker listening by using our platform in an innovative way to solve a marketing challenge. It created a voice-activated campaign, the first of its kind in the UK, targeting smart speaker listeners through the platform. This enabled audiences to order samples directly to their door at a time when physical retailers were closed.”

How have people engaged with online radio in the pandemic, and how do you see this changing over time?

John Firth, head of sales, Bauer Radio: “Digital radio streaming increased throughout the pandemic, with many turning to the medium for trusted information, entertainment, escapism and a connection to the outside world. According to our recent research, 26% of people said that they listened to more radio during the pandemic than they had previously, and of them, 81% agreed that they will continue their increased listening habits once normal life returns. Between shifting media consumption, new working patterns and digital acceleration, we believe that online listening will continue to grow, especially with the rise of smart speakers, social listening and screen fatigue.”

What digital audio trends are you most excited about for the year ahead?

Benjamin Masse, managing director, market development & strategy, Triton Digital: “Despite the disruptions caused by the global pandemic, the digital audio industry has continued to expand and grow. An increasing number of brands are embracing programmatic advertising, leveraging local and global DSPs to reach their target audiences. In 2020, we saw a 341% increase in audio ad spend within our global programmatic marketplace, and we anticipate continued growth throughout the year ahead.”

Source: Catherine Cribbin, IAB UK