Why is Digital Audio Advertising disrupting the Traditional Models of Advertising and Marketing?

I’ll start with a question, or more a statement; ‘Digital audio’ is in its rudest health ever, and disrupting the digital mainstream. But why, and more importantly, how?

When you think of digital advertising, display and video ads will no doubt instantly come to mind. Real time bidding (RTB), programmatic, retargeting, and sequential…all tools and metrics that have helped maintain a growing digital business that can track and prove the return of investment (ROI) of every digital dollar spent. With the launch of more and more apps, and more and more digital brands, excess inventory outstrips demand.

There are so many digital formats out there trying to reinvent each other but essentially each tablet, mobile or desktop delivers multiple display ads and video ads, all of which are simultaneously fighting for the eyeball’s attention. But it’s only recently that audio has been considered a ‘digital format’.

Commercial radio has existed for over 40 years, but commercial audio has really only been measured by digital metrics in the UK over the past 6–7 years. Spotify, arguably, put digital audio advertising on the map when it launched in Oct 2008 but lacked the scale that commercial radio could offer. Compare radio listening in a digital online environment (i.e. listening via online or mobile app) versus the 34.4m weekly commercial radio listeners. Only 2.27m listen whilst connected to the web and therefore only they can only be measured fully by digital metrics. Digital audio scale on its own, maybe not.

However, the digital audio market is now growing through other areas. With Spotify, Deezer, Rdio, Soundcloud, Mixcloud, Blinkbox et al, all part of that digital streaming world, shows this digital marketplace in the UK and globally is clearly booming. Global Radio has cleverly created a digital audio exchange (DAX), and has signed up a handful of these brands to create a digital audio network which offers digital audio reach at scale, entering the world of programmatic. As audio becomes measured by digital metrics, it can naturally move away from the low cost per thousand (CPT) that radio currently trades by and can start to command a higher digital based cost per mile (CPM). How successfully DAX can measure ROI and success remains to be seen but this is definitely a boost for the audio space and one I’m sure they’ll prove in due course.

The more audio gets consumed via newer connected devices, such as connected cars and smart watches, the longer this industry will continue to disrupt the now traditional digital display and video industry.

There is, however, a forgotten medium that has been relatively overlooked until now: the podcast. Podcasts should now be seen as a medium of its own in the on-demand digital audio world. The ad industry is beginning to realise its full potential and it’s starting to be considered the most premium audio environment available.

Podcasts are consumed in the UK by approximately 12m weekly, almost a quarter of the ‘adult’ population. In the US, Pew Reports have found that 27% of total US internet users listen to podcasts. According to research from Edison, 46m people in the US listen to podcasts every single month; that’s 17% of the population. The BBC here in the UK announced in August 2014 that their podcast consumption had risen a massive 36% year-on-year, with 24m UK downloads a month. Serial, the most famous podcast is not even 6 months old and has amassed over 68m downloads of just its first 10 episodes.

So, why are podcasts the most premium audio environment? Let us consider it. Radio and music are a ‘company’ medium, they work in the background while you read a paper, send emails, chat, dance, tweet…whatever. Podcasts cover a myriad of subjects, much like a magazine and the majority of its content is spoken word which is predominantly consumed via headphones. Try emailing whilst listening to a podcast, it’s very challenging as the host is essentially talking to you. Radio is a one-to-many experience, podcasts are a one-to-one experience providing fully engaged, on-demand listening defined by the lifestyle subject of the content (football, gaming, finance, tech etc). Podcasts also offer plenty of advertising opportunities. The most valuable of advertising opportunities is the host-read endorsement.

Host-read endorsements are delivered in the unique style of each host, giving complete editorial scripting rights over to the host. These are also delivered with true sincerity to a completely engaged, lean-forward audience which already has an incredibly close personal relationship with the host.