top of page

New Research Uncovers Audio Spending Gap, Huge Opportunity For Advertisers.

It may sound like the call letters of a radio station you’ve never heard of but WARC is one of the most respected providers of marketing research, case studies and data in the world. It’s out with a new deeply researched report that shows how advertisers underutilize audio in their media mix and the substantial opportunity to harness the growing medium to drive results for clients.

As first reported by Inside Radio on Monday, "The Investment Gap: Understanding the Value of Audio" shows that audio captures 31% of media consumption but just 9% of ad spend – and that 25% of advertisers do not invest in audio at all.

While WARC forecasts audio advertising spend in the U.S. to reach $13.9 billion this year, a double-digit recovery (+10.9%) from pandemic-fueled 2020 cuts, the report highlights a large audio investment gap and the vast opportunity that exists in the “mass reach and high engagement audio advertising market.”

Conducted by WARC for iHeartMedia in September 2021, the report portrays audio as “an escape” from the sensory overload of nonstop visual media, while offering “strong levels of engagement that people trust.” The study show audio as a medium with “growth accelerating over the remainder of this decade” and urges brands and agencies to “invest and test to understand the channel’s full potential.”

While these are themes radio industry leaders have been preaching for some time, they carry significantly more weight coming from WARC, which has enormous credibility among advertisers and agencies across the globe.

“Bridging the investment gap would seem like a viable way for brands to increase visibility,” the report says. “When the competition is under-spending, it is easier to secure an unfair share of attention.”

While audio commands a strong level of engagement, the nature of that engagement varies by format and content, WARC says in the report, pointing to the growing number of audio platforms and devices. “The wide range of audio contexts allows brands to select the communication environment that best matches the objective.”

Calling audio listeners “highly receptive,” WARC says they are “trusting of and predisposed towards commercial messaging,” whether turning to audio for companionship, education or entertainment. It cites multiple research studies from Nielsen and others demonstrating “audio’s ability to drive positive business outcomes.”

The study also offers these highlights of the effectiveness of audio advertising across every stage of the marketing funnel:

Increases Brand Awareness: Audio delivers wide reach and high frequency. Nielsen Share Shift data shows that adding audio to a TV campaign improves performance by 20% while reducing costs.

Creates Favorability: Because audience members have close relationships with their preferred stations and platforms, audio boosts brand familiarity and consideration.

Sparks Conversion: By delivering urgent calls-to-action at the most relevant times and places, audio motivates the actions and interactions brands require.

While WARC’s research found underinvestment in audio to be true across all demographics, the gap between consumption and ad spend was particularly pronounced among men, younger people in general (16-34 year-olds in particular) along with Black and Hispanic audiences, and people with higher incomes.

“The study investigates whether there’s a disjoint between consumer consumption and media allocation of audio as a channel,” Paul Coxhill, Managing Director, WARC, said in announcing the study. “The findings are fascinating and demonstrate a real opportunity for brands to expand their brand reach and, if done well, their share of consumer attention by expanding the role of audio in their media mix.”

Gayle Troberman, Chief Marketing Officer, iHeartMedia, called the study “the single-biggest growth opportunity for brands. “Too many brands are on mute,” Troberman said. “Brands that right-size their audio investments and begin spending and innovating across radio, streaming and podcasts outpace competitors in finding new audiences, building brand affinity and driving sales.”

The report identifies these three trends shaping the future of media.

A Connected World: Internet-enabled devices are growing ever more popular, especially among younger, more digitally savvy users. “Audio is a powerful way to engage audiences across these devices, with podcasts in particular seeing high growth rates,” the study says.

Crumbling Cookies: As marketers enter a new world without tracking cookies and mobile ad IDs, privacy-first strategies centered on interest-based targeting will become increasingly important, WARC’s researchers predict. Audio’s strengths in contextual targeting are likely to play to its advantage,

Immersive Experiences: Emerging technologies are offering new ways for audiences to interact with all types of content. Innovations such as 3D audio will be part of this trend. “Podcasters, content creators and their listeners can expect a new wave of immersive audio experiences,” WARC says.

Download the full report HERE.

24 views0 comments
bottom of page