GLOBAL: Broadcast radio’s share of global display advertising spend has dipped by 1.6 percentage points over the past decade, largely because of falling expenditure in the US where advertisers are investing more heavily in digital audio formats, a new WARC analysis indicates.
The latest monthly Global Ad Trends report, which focuses on radio and digital audio advertising, highlights how radio’s share of display spending has risen in key markets during that time, including China (+1.2pp), India (+0.6pp), Germany (+0.5pp), Australia (+0.5pp) and Canada (+0.5pp).
These gains have been eroded by a fall of 4.0 percentage points in the US, the world’s largest radio market at $13.6bn in 2017 (44.1% of all radio spend worldwide). With the US removed, radio’s share of display adspend has grown globally by 1.0pp over the last ten years.
The US audio market is changing as 39 million Americans now own a smart speaker and two in five (39%) are using it at the expense of traditional AM/FM radio. At the same time, 71% of owners say they are listening to more audio since purchasing a smart speaker.
WARC believes US advertisers will spend $1.6bn on digital audio advertising this year, most of which (81.3% – $1.3bn) will be delivered via mobile devices.
Research shows that the targeting capabilities provided by digital audio formats are particularly attractive to practitioners. The findings come at a time when company reports show that almost half (49%) of Spotify's ad impressions were delivered programmatically – leveraging consumer data – last year.
Podcast advertising has yet to attract the big bucks but it offers a couple of particular benefits to advertisers: research shows the format outperformed pre-roll video in driving purchase intent in 57% of cases; and four in five (78%) US consumers don’t mind ads or sponsorship messages because they understand these are supporting the podcast.
“Broadcast radio continues to be a staple for advertisers, and its share of display investment has grown in the majority of key markets, most notably China, where reach is high and CPMs are low compared to other media,” observed James McDonald, Data Editor, WARC.
“In the US, advertisers are investing more in digital audio, lured by the format’s targeting capabilities on platforms such as Spotify,” he added. “Podcast sponsorship also presents an opportunity, as consumers seem willing to tolerate advertising in exchange for supporting the content they love.”
WARC’s analysis of its data for the 96 markets included in its Adspend Database indicates that radio advertising spend amounted to $32bn worldwide in 2017, and is expected to rise by 1.3% this year.
Sourced from WARC