Local advertisers may not be a large share of where podcast advertising dollars come from, but some Main Street businesses are beginning to wake up to the opportunity to reach their customers via highly-targeted audio messages. A new survey of local business by Borrell Associates shows a 45% increase in the number of small businesses that plan to use digital audio advertising in the year to come. Among those surveyed, 11% told Borrell they are buying streaming audio ads in 2022. But when asked about their plans for the year to come, 16% said they expect to use the format in 2023.
Digging deeper into local businesses’ marketing plans for next year, Borrell asked how many plan to cut back on streaming audio spending. Two percent said they plan to. But that pales in comparison to the eight percent that said they plan to either start spending or increase their spending on streaming audio.
“Everybody's talking about a reason to do it. Here's the catch. The number one reason that local advertisers say they're not buying streaming audio, is nobody's pitched them, and also have the perception that it's too expensive, probably because no one's pitched them. And an almost equal amount saying they don’t how to buy streaming audio,” said Borrell Executive VP of Local Market Intelligence Corey Elliott. “So there's a lot of entrance interest in it, but also a lot of ignorance,” Elliott explained during a webinar.
Borrell’s survey also asked both local businesses and agencies about how they view streaming audio in terms of its effectiveness. It found a disconnect between the two groups. Borrell says that while ad agencies view streaming audio as highly effective, local businesses that buy directly consider streaming audio as one of the less effective advertising options.
That could be a factor in why when ad agencies were asked where they thought their local clients may cut back on spending next year, five percent predicted their streaming audio budgets will be under pressure.
Yet the bigger picture is extremely positive for digital audio as it is one of the ad mediums that agencies say they are seeing the most interest in from their clients. Among the agencies surveyed, Borrell says 37% said that streaming audio has piqued client curiosity. Only streaming video, social media, and search engine marketing scored higher.
Borrell’s survey of local businesses shows 11% report they bought advertising on streaming audio this year – a measure of both podcasting and streaming radio services. They said their average investment in the format was $7,211. That compares to 43% that used AM/FM radio with a $23,173 average budget. Search engine marketing ranked first at 42% and $58,907.
Fielded Sept. 3-Nov. 16, Borrell’s fall 2022 advertiser survey includes completed surveys from 359 local ad agency respondents and 1,983 direct buyers. What do they look like? Eight in 10 direct local buyers are independent companies with about $3 million in gross revenue. Typically exceedingly small businesses, three in four direct buyers don’t have a great degree of marketing experience, suggesting they need and/or want help. They spend an average 4.6% of their gross revenue on advertising but 72% spend less than 3% of gross revenue on advertising.