The audience for streaming audio continues to grow, and advertisers are taking notice. A 2021 survey found that 68 percent of U.S. listeners listened to digital audio in the previous month, compared to 47 percent in 2014. While streaming audio advertising still lags behind traditional radio, changes in consumer privacy policies at Apple and the effect that’s had on social media platforms has prompted brands and small businesses to explore their options. Roughly $5.7 billion will be spent on U.S. digital audio ads in 2022, up 14 percent over 2021, according to Interpublic Group’s Magna media unit.

The unit projects radio advertising will total $11.3 million, increasing only 3 percent this year. “You can’t deny the numbers: It’s a way, undoubtedly, to be able to reach younger audiences, cord-cutters,” Omnicom Media Group head of enterprise partnerships Bryan Master tells The Wall Street Journal.

Examining the subset of national advertisers working through agencies, WSJ says last year marked the first time they spent as much on U.S. digital audio as they did on traditional radio, citing Standard Media Index. “Such digital-audio spending was a third of overall audio advertising in 2019,” WSJ said, noting that “the pool of advertisers examined by SMI is often indicative of the market moving forward.”

Among the major national brands, podcasts currently account for less than one-fifth of digital audio ad spending, but it’s the fastest-growing genre, and there is still lively  competition among the top streaming services for exclusive rights to the most popular podcast hosts and shows, according to WSJ, which says such content “can draw both audiences and advertisers.”

The influx of advertisers and audiences has, however, driven podcast ad prices higher. “Podcast CPMs — or the cost of 1,000 audience impressions — rose to $26 in the third quarter of 2021, up from $22 for the same period in 2019, rising above streaming TV ad costs in the process, according to SMI’s data,” WSJ reports.

Challenges remain, however, with unscripted podcast talk shows often teetering out of the advertisers’ comfort zones for “brand safety,” Joe Rogan’s Spotify dust-up being a prime example. And measurement of audiences and ad effectiveness can be more difficult to measure than in other digital media, WSJ writes.

But the bottom line is, while advertisers continue to spend billions of dollars on established social brands like Meta Platforms’ Facebook and Instagram, they’re getting more adventurous.

Related:
Podcasts vs. Radio: What’s the Difference for Advertisers?, Spotify, 3/22