As the debate continues about whether the U.S. is officially in a recession, there is a belief among some audio practitioners that audio may actually benefit from an economic downturn. The thinking is that as major brands scrutinize their media budgets with an eye toward more efficiency and economy, audio, with its lower price point, may look more attractive.
“From a dollars standpoint, it's a question of, ‘Where am I going to get the most for my money now?’ and that’s created an interesting dynamic for the audio advertising space,” says Scott Simonelli, founder and CEO of the audio creative research and analytics company Veritonic. “People are definitely starting to be a little more price conscious.”
The current downturn arrives at an inflection point for audio as marketers have moved from a let’s-try-it-out mentality to taking the channel more seriously. At the same time, audio is seen as a safer, more trustworthy alternative to digital by many advertisers.
Because it provides audio optimization, measurement, and research services to big advertisers, Simonelli says Veritonic is able to see the early stages of this dynamic developing. “With some of the larger brands, as people start to look for more economical ways to reach their audience, we’re seeing that they’re looking for ways that it can be quantified.”
While the price of media advertising overall has increased at jaw-dropping levels since the pre-COVID era – with television leading the pack, as CPMs are up 40% in the U.S. since 2019 – radio continues to be a bargain for advertisers, with prices at the same levels during 2019, according to WARC Media's recent report on the rising costs of incremental reach. On a global basis, total audience impressions with the same spend nosedived 18% for TV from 2019 to 2021, while the decline was a more modest 6% for radio.
“Audio is just not going to be as vulnerable to that inflation as maybe a video spot because it requires less people and less resources,” says Simonelli. “And audio has an advantage already because you can reach more people with a very powerful asset. It's more powerful than an ad banner but it's not as expensive as a TV ad. So, there's a sweet spot there.”
A growing number of major advertisers are large audio users, on broadcast radio, podcasting, or both. They include the online mental health brand BetterHelp, meal-kit company HelloFresh, online retailer Amazon, employment services Indeed and ZipRecruiter and insurance carriers Progressive, GEICO, Liberty Mutual, Allstate and State Farm, according to data from Media Monitors and Magellan AI.
More anecdotally, “The Bill Simmons Podcast” has gone from carrying ads for Me Undies to State Farm and other major advertisers.
More Brand Building Audio Campaigns
Simonelli says Veritonic is seeing an uptick in clients contracting for its brand lift studies, a sign that audio has expanded beyond performance marketing campaigns designed to increase clicks to include more marketers using the power of sound to build their brands. Consumer packaged goods, pharmaceuticals and mental health are among audio’s growth categories with big pharma companies increasingly interested in creating audio logos.
“People are spending a lot of time thinking about how I can build a sonic strategy around, not just an audio logo, but an audio advertising campaign with sound design and the right music and the right voice that's going to fit together,” Simonelli says. “That intimate relationship that you have with audio – it’s like you're in their ear, you're in their car, like someone's talking to you. You can really connect with somebody in a way that you can't with any other, certainly any visual medium.”
While Simonelli says Veritonic has yet to see an ad pullback, if there is one it could work to audio’s advantage. “We haven't seen that kind of retreat in ad dollars and ad spending yet. And I do think if there is an overall one, audio is still going to be the growth area. If anything, it'll be a shelter,” he says. “In the conversations I have, people are just a little more conscious and a little more aware right now and are putting a little more thought into what they're doing, which is encouraging for us. And I think overall, that's good for audio advertising.”