Music to Advertiser’s Ears?

Here’s an easy question: did you listen to music on your phone or another streaming device in the last few days? How about a podcast? If you listened to one recently, you are a part of the 73 million Americans who listen to a podcast at least once a month. There will be 201.5 million US digital audio listeners (of music, podcasts, and audiobooks) this year according to eMarketer, making up 76.6% of all internet users. By 2023, that number is likely to grow to 216.2 million or nearly 64% of the entire US population.


Naturally, marketers are excited about that kind of reach. But connecting with digital audio listeners is somewhat complicated. Here’s the breakdown by type of media:

While streaming music subscriptions grew by 50.5% in Q4 2018 vs Q4 2017, ad-supported music subscriptions experienced slower growth, up just 18.2% for the same period according to BuzzAngle Music. Digital audio advertising simply has not grown at a rate corresponding to the amount of time users spend with digital audio content. US users spend 18% of their time on mobile devices listening to music apps such as Pandora, Spotify, Amazon Music, and Apple Music, according to comScore. The corresponding increase in ad spend would equal to about $10 billion in revenues for those apps alone, speculates eMarketer, admitting that direct comparison is imperfect since some popular music streaming services are subscription-only. But still- the IAB estimates that digital audio made just $1.6 billion in 2017.

Podcasting on the whole seems to be better positioned for advertisers. As one of the fastest-growing advertising media, US podcasting is likely to see ad spending revenues grow to $659 million by 2020, from just half that in 2017. Its highly engaged, affluent millennial demographics is like catnip to advertisers, who also value podcasts’ strong ROI and the “more organic” advertising experience of the hosts reading the ads. Yet, despite the success of direct-to-consumer brands such as Casper, Dollars Shave Club and MailChimp with the form, podcasting has not attracted the ad dollars of big, mainstream brands.


Several challenges are slowing down advertising in the digital audio category, including a fragmented publisher landscape, not enough programmatic buying options and insufficient measurement, all of which the industry is working hard to resolve.

Until it does, consider dipping your toes in digital audio via alternatives, such as branded podcasts or sponsored content. Gimlet Media and Anchor, a producer of branded content and a podcasting services firm, respectively, can make it easy for brands to make their own podcasts. Both were recently purchased by Spotify. Branded podcasts have a good track record: for example, Trader Joe’s podcast ranks in the top 1 percent of all podcast downloads, regardless of genre. GE’s fictional show, “The Message,” is regarded by many as the most successful branded podcast ever, garnering more than 8 million downloads since its release. And the best branded podcasts, have three things in common, says AdAge: they go easy with the sales pitch, sound authentic, and talk about issues relevant to their target audiences.


From a marketing management perspective, here are some questions to consider:

  • As a manager, what things would you look for when deciding whether to enter a new medium? How would you determine if audio advertisement placements were “too soon” for your brand, or if you were “getting in at just the right time”?
  • Digital audio streaming today is much different than playing a radio commercial in the 1990s due to the capability of targeting based on consumer data. How would you decide where to run your audio advertisements, and what metrics would you want to report out on?
  • The integration of digital audio can be one more tool in a cross-channel marketing plan. Where in the marketing funnel would you want to utilize digital audio? What tactics would you use to precede or follow digital audio?