Why is Digital Audio Advertising So Popular for Businesses? (Hint: It’s All About the R-O-I)
Any time you see someone wearing headphones or earbuds—which is a lot, these days—the odds are high that they’re listening to digital audio: music, podcasts, audiobooks, or other digital content either stored on their smartphone or streamed online.
The market for digital audio has exploded over the past decade. So has the market for digital audio advertising. While traditional radio still has a place in modern-day advertising, digital audio ads offer unique targeting capabilities and cost-effective ad delivery that makes this channel a great addition to any local ad strategy.
Here’s a quick breakdown of why digital audio has become such a key advertising channel—and why that value is likely to maintain in the years ahead.
Younger generations are leading the way when it comes to digital audio consumption: According to Insider Intelligence, 91.1 percent of consumers ages 16 to 24 listen to digital audio at least occasionally.
But digital audio has the power to reach consumers across all age brackets. Edison Research found that half of all digital audio listeners are over the age of 35, and this rate of adoption among older demographics is likely to increase over time. Digital audio has become a mainstream entertainment channel for a diverse body of consumers, and that doesn’t look to be changing anytime soon.
Market penetration for digital audio increased again in 2022, with 74 percent of U.S. internet users listening to digital audio. More than 222 million Americans now consume digital audio content, a number which will increase in the coming years.
This high adoption rate is one reason the audience growth of digital audio has started to slow significantly. While slow growth is often viewed unfavorably, this slowdown is more indicative of the high adoption of digital audio, and the maturation of the market.
Adoption is expected to continue to increase, by an average of 1.6 percent every year through 2026, but the leaps and gains made by digital audio growth in past years is likely a thing of the past. But while the audience growth is slowing, total listening time still has space to grow. In 2022, that’s exactly what happened: U.S. internet users listened to an average of two hours, 54 minutes of streaming music and podcasts every day, coming close to the amount of time spent watching broadcast TV.
Streaming music consumption alone increased by 12 minutes from 2021, a double-digit gain that underscores the growth opportunities facing digital audio in the future.
For the first time, streaming audio accounts for more than half of all digital audio consumption, according to Insider Intelligence, which is good news for businesses looking to advertise. As a mobile and broadly accessible media channel, streaming can be a great vehicle for delivering advertisements to a broad range of consumers.
Streaming has asserted its dominance through its convenience and flexibility. Consumers can listen to podcasts and music while commuting to work, doing the laundry, or even going for a run. Meanwhile, leading streaming apps like Spotify have successfully developed ad products and solutions that make it easy to plan, launch and optimize a digital audio campaign.
The slowdown in digital audio audience growth does offer some potential benefits to businesses eager to advertise through this channel. Because of the high market penetration of digital audio, businesses can use ad targeting tools to refine ad delivery to a carefully selected audience.
Even a niche audience can be targeted and engaged through digital audio ads, helping you focus your ad spending on opportunities that will drive engagement and ROI for your business. This targeted approach isn’t available through traditional radio, and it wouldn’t be as effective—or as valuable—in prior years when digital audio adoption was still in its early stages.
For today’s small businesses, digital audio is a great way to get in the ear of your target audience—literally. Cox Media’s experts can help you build a digital audio campaign that incorporates the leading best practices and is aligned with both your advertising budget and business goals.
Connect with a Marketing Expert
Stay On Top of the Newest Business and Marketing Insights
Sign up for our monthly newsletter to get the latest industry information, business trends and marketing updates.
Connect With Your Local Marketing Expert
You know your business. We know advertising. Together, we can bring your business to more people. Contact a member of our team today. We’d love to help you grow.