A small group with deep pockets – that’s an over-simplification of the typical local advertiser that buys streaming audio. “Although only 11% of local marketers planned to use streaming-audio advertising in 2021, they’re among the highest rollers in the advertising marketplace,” says a fresh study from Borrell Associates. “Their overall budgets are 3.5-times bigger, and they use nearly twice as many forms of marketing.”
With an outsized budget and above average marketing experience, streaming audio advertisers are placing their biggest bets on TV advertising and social media. “While TV budgets are in line with what others spend, social media spending is off the charts,” Borrell says. Digital audio ad buyers invest a whopping $95,319 a year on social, compared with $18,446 for all other advertisers surveyed. Spending on streaming video is also extraordinarily high, at $64,047 a year, with a 29% increase planned this year.
The results are culled from Borrell’s survey of 2,262 local advertisers conducted in Q2 and Q3 2020. Set to be published today (Feb. 17), “The 2021 Mindset of Streaming Audio Advertisers” isolated 227 advertisers (11% of the sample) who said they buy streaming audio advertising. The report also includes responses from a separate survey of 342 local ad agencies, of whom 163 (48%) buy streaming audio advertising.
While just over one in ten local advertisers use streaming audio, nearly half (47%) of agencies buy into the channel. Of those, half believe streaming audio grew more effective in 2020.
Streaming audio advertisers are bullish on audio in general. The Borrell data shows they spend 58% more on radio ($65,172 in 2020) than they do on streaming audio ($27,073). But they planned to increase their online audio allocation by 13% in 2021 compared to only a 5% bump for radio.
With money to burn, streaming audio buyers are all over the media map. They use more media channels in their marketing mix than the average and they plan to increases their 2021 overall ad budgets by 16%.
And they don’t view digital audio among the most effective forms of marketing. In fact, they rank it 14th out of 16 channels with web design, streaming video and search engine optimization most effective.In addition, 23% stopped buying streaming audio in 2019. COVID-19 was the top reason, although “difficult to measure” was second.
Digital audio buyers are concentrated within a small sector of business types. Half of them are in arts & entertainment, retail, civic/religious/professional organizations and healthcare. They are less inclined to be in real estate or construction.
“Streaming audio appeals most to local agencies and direct buyers who possess greater marketing experience,” the study concludes. “As a relatively new ad channel, it’s being adopted first by the largest advertisers. Expect smaller advertisers to adopt it when the value proposition has been clarified by the initial adopters.”