A significant 66 per cent of buyers have intentions to increase their investments in audio within the next year, says a the Europe Digital Audio Advertising Report 2023, unveiled by GroupM Nexus, the media investment group of WPP, in partnership with IAB Europe.
The study involved 549 advertisers, agencies, and publishers across 29 European markets, with data collected through a survey conducted by GroupM Nexus, utilizing the national IAB network, between May and June 2023.
An impressive 47 per cent of the surveyed advertisers and agencies rated audio advertising their top choice. Three main drivers for audio ad spend were identified by buyers: the channel's capacity to enhance broader media plans (65 per cent), increase brand awareness (55 per cent), and target specific audiences (48 per cent). The report also found diversification in investment across various audio channels and ad formats. The majority of buyers directed their spending towards streaming (59 per cent), podcasts (59 per cent), or online radio (57 per cent).
Marketers have a positive outlook on digital audio advertising. Specifically, 66 per cent of buyers plan to invest more in this sector over the next 12 months, with nearly a quarter (24 per cent) expecting an increase of between 11 per cent and 30 per cent in their spend. These forecasts indicate a high level of confidence in digital audio as an effective channel for reaching target audiences.
Daniel Knapp, Chief Economist at IAB Europe, highlights that digital audio has outpaced all other advertising channels in Europe from 2018 to 2022 in terms of compound annual growth rate. The pandemic acted as a catalyst for digital audio's growth, especially for podcasts, due to increased consumption. Furthermore, enhancements like improved measurement, simplified buying, and automation have contributed to the advancement of the market. The focus of the advertising industry on attention, quality of reach, and brand safety positions digital audio as an attractive investment channel for advertisers and a powerful platform for publishers to exploit context. The projection is that the European digital audio market, which reached €772 million in ad spend in 2022, will surpass €1 billion by 2025.
Surveyed marketers ranked incremental reach (46 per cent), innovative activation like dynamic creative ads optimization (DCO) (43 per cent), and targeting efficiencies (42 per cent) as the top three drivers for digital audio spend. These factors are expected to play a significant role in attracting further investment in the next 18-24 months. Interestingly, 76 per cent of advertisers and agencies plan to increase their audio ad spend during this time period. Smart speaker interactive ads are considered the most significant opportunity for increasing digital audio budgets in the future, followed by dynamic audio ads. Cross-channel insights and activation technology, along with advanced contextual targeting, are also seen as significant opportunities to unlock digital audio growth. The capabilities to capture audience attention, drive consumer action, and execute informed cross-channel campaigns are vital for securing higher ad spend.
Audio ads are expected to connect with audiences primarily on mobile devices, according to seven in ten marketers surveyed, followed by desktops and laptops (48 per cent), and tablets (44 per cent). Mobile's prevalence as a key audio device presents a valuable opportunity for marketers to engage with audiences throughout the day. The survey respondents also believe that audio ads can reach audiences via Connected TV, game consoles, and standalone radio devices, highlighting the extensive reach of audio.
Harry Harcus, GroupM Nexus EMEA, emphasized the tremendous potential in the audio channel, with buyers and publishers anticipating notable growth in the near future. Audio, being a medium that reaches highly engaged audiences at moments when visual counterparts may not, can complement broader plans for buyers and enhance media offerings for publishers. Advancing the technologies that enable audio advertising can unlock cross-channel optimization and performance, making audio inventory even more appealing and driving revenue for publishers.