How Audio Advertising Became a Blindspot for U.S. Brands

With the state of the U.S. economy still unclear, more advertisers are tightening their belts and re-evaluating their media mix. In a recent study by WARC, 96% of retail and CPG marketers said they’re evolving their advertising approach and tapping into digital audio advertising as a way to ensure a smooth path-to-purchase.

According to Paul Kelly, chief revenue officer at AMA, a streaming audio adtech company, audio is a missed opportunity for many top retailers and CPG brands. He says that by coupling sonic branding with programmatic and dynamic creative, it’s possible for brands to capture higher attention levels through audio channels than any other media today.

“In an increasingly digital world, where visual content dominates the advertising landscape, audio provides a distinct and often overlooked avenue to reach and influence audiences,” Kelly says.

Although audio is often seen as an upper funnel or brand building channel — a holdover from broadcast radio — Kelly says advancements in technology and modern capabilities have opened the door to more precise targeting and opportunities for personalized engagement.

“The competitive and margin pressures of retail force a bias towards lower funnel or performance led media,” he says. “You can’t execute a data-driven omnichannel approach without digital audio. So, not only are the merits of the channel often overlooked in isolation, but its new prominence within the channel mix increases the opportunity cost.”

Given the time Americans now spend with digital audio — a whopping 1 hour, 40 minutes per day for the average U.S. adult and 2 hours, 17 minutes per day among active digital audio listeners, according to data from eMarketer — it’s clear that audio in its current form is under-monetized. 

Despite his position within the audio advertising industry, Kelly acknowledges that the logic against audio, until recently, had been relatively sound. Audio was great for reach, but significantly trailed other digital channels in terms of addressability and measurement. Now, he says that’s changed. Advancements in programmatic advertising technology are enabling precise targeting and measurement to maximize the impact and efficiency of campaigns. Brands are quickly discovering that they need to pivot their strategies if they want to tap into the explosive digital audio market.

Programmatic advertising has especially revolutionized targeting capabilities, allowing advertisers to reach specific audiences based on demographics, interests, and behaviors. The precision ensures that ads are delivered to the right people at the right time, increasing relevance and effectiveness. 

Streaming platforms and podcasting have also surged in popularity, providing a larger and more engaged audience for audio ads.

“The best CPG marketers are achieving results that mirror the outcomes in other channels and formats. Audio now has shoppable formats, like social or commerce media, interactive formats, like CTV and display, and creator endorsements from host-reads in podcasts, like influencer marketing,” he says. “They’re also able to leverage their customer data as they do in other channels thanks to dynamic creative which automatically versions or optimizes the message or call-to-action based on individual purchase history [and] product preferences.” 

Kelly reiterates that nearly every CPG and retailer today understands that the modern customer journey is non-linear. That understanding highlights the need to create more integrated, omnichannel opportunities to respond to the changing dynamics.

Integrating Audio into Everyday Life

Considering the rise of voice-activated devices and smart speakers, consumers are also increasingly integrating audio into their daily lives. This presents a unique opportunity for brands to reach consumers in a way that’s non-intrusive. 

Kelly says there’s a window of opportunity for retailers to capture additional value by more efficiently increasing share of voice across the channel, relative to any other media. There’s also a “window of necessity” for the industry to narrow the monetization gap, before the current investment levels “calcify to a baseline.”

“With full due respect to the relentless pace of advancement across digital, no channel can boast the simultaneous confluence of innovation across all three of the pillars that provide the infrastructure to all ad supported media. These pillars include device and hardware, such as smart speakers and connected cars, content — think podcasts and voice assistants — and ad tech, as in new ad formats and placements, dynamic creative, and insertion,” Kelly says. “In aggregate, this constitutes an entirely new architecture and surface area for audio, thus an entirely new proposition to advertisers.”