Connected TV may be the current favorite digital medium for retail advertisers – with Disney and Peacock among the video content providers having partnered with retail media networks – but audio is poised to make its move, with the support of those in radio marketing and ad creative.
The numbers are working in audio's favor, according to eMarketer, which last year predicted that audio would account for 20% of digital media consumption in 2024. Now advertisers need to fall in line, as the Interactive Advertising Bureau projects audio will make up a disproportionately low 7.4% of ad spend this year.
“There’s a pretty big gap [between audio consumption and ad spend], and we’re trying to educate the marketplace,” SiriusXM Media Senior VP of Sales Steven Kritzman tells The Current. “As we think about it specifically related to the retail media network space, there’s a big opportunity. As people shop, they tend to consume audio. Our retail media partners look at that and think that’s a great way to engage with folks.”
As earlier reported by Inside Radio, Retail Media Networks (RMN) are one of the hottest channels in advertising as retail giants like Walmart, CVS, Target, Kroger, and Amazon make mountains of consumer purchase data accessible to marketers to target customers on the retailer’s digital platforms. The burgeoning RMN market was estimated to be worth $110 billion in 2023.
Paul Kelly, Global Chief Revenue Officer of A Million Ads, an audio-focused creative company whose clients include Target, Walmart, and other retailers agrees that while it “maybe isn’t as high-priority for retail media networks as CTV, audio will be next. Audio will enable retailers to deliver an advertising proposition that is across publishers and across channels and that is completely audience-centric, not just based on who the audience is but also based on where they are in the life cycle of purchase. And because of the data that retail media sits on, that is now technically possible.”
Industry experts see audio as a natural fit for retail media networks, especially with growing interest in programmatic audio and in-store audio ads, not to mention audio platforms' ability to leverage the recency and accuracy of retail media networks' first-party shopper data.
“We believe that audio is one of the few channels that can not only support a digital environment but also transcend the in-store environment,” says Justin Nesci, Executive VP of Advanced Audio and Data Revenue for iHeartMedia, which has produced branded podcasts for retail clients, enabling them to capture more customer data and re-target loyal consumers. “The audio experience as a media format can reach a consumer at work, in the car, online and in the store.”
As retail media networks become more effective at reaching customers via using first-party data for targeting display, video and streaming TV ads, some see an eventual convergence of retail media dollars and brand dollars, which should benefit audio. “I think it will be an opportunity for audio to really take a prominent place,” Kritzman says. “Audio allows for really great storytelling, and a creative 30-second audio spot resonates more than, say, a banner ad, when you’re on the go or walking around a store. The digital players that have really good data and really good logged-in users are going to benefit tremendously, because there’s only so much supply in the walls of these networks themselves.”