Listen up: The rise and future of digital audio

In an age rife with all things 'on-demand', the rapid rise of digital audio is attracting the eager eyes of advertisers everywhere--and rightfully so. Digital audio’s easy accessibility, wide range of programming, and multiple platforms is drawing huge audiences.

You may have seen the shift firsthand. Have you noticed how small talk in the company lounge often turns into a discussion about everyone’s favorite true-crime podcast? Or how your workout has never been better since you started sweating to Spotify’s Beast Mode playlist.

The point is, consumer interest in audio platforms and programming is at an all-time high.

Just look at the data…

Recent reports estimate that 72 percent of millennials, the generation currently boasting the most consumer clout, listen to digital audio. With more than 95 percent of Gen Z owning a smartphone (and 25 percent of those owning one before age 10), these numbers will continue to skyrocket.

There’s no doubt that the modern era of digital audio is currently booming (pun intended), and it offers a prime opportunity for advertisers to dive in and grab their share of attention. In this post, we dive into what’s causing digital audio’s surge in popularity, explore what’s at stake for advertisers, and show how you can capitalize on the next big thing in the industry.

What do we mean by digital audio?

Digital audio doesn’t mean the same thing to a musician that it does to a marketer. For marketers, IAB sums it up nicely in its Digital Audio Buyer’s Guide:

“Digital audio refers to partially or entirely advertising-supported audio programming available to consumers and delivered via the wired or mobile Internet.”

This encompasses various audio mediums such as streaming music, podcasts (or “on-demand programs,” if we’re being formal), and even traditional AM/FM radio (the OG of the broadcast audio space) that is accessed online.

IAB also notes that digital audio is often used interchangeably with terms such as “digital radio” or “internet radio.”

The rapid rise of digital audio

The statistics on digital audio are clear: it’s up and to the right.

IAB reports that the monthly audience for digital audio is expected to exceed 190 million in 2019, up almost 20 percent in only five years.

In 2017, Nielsen estimated that of all music consumed, 41 percent was streamed, up from 32 percent in 2015. Also in 2017, the Recording Industry Association of America reported that streaming music accounted for 65 percent of total U.S. music revenues. (It’s worth noting that this metric also saw a consecutive two-year increase for the first time since 1999!)

When it comes to podcasts, it was only just a few years ago that less than half of the population was even familiar with the term. In 2018, Edison Research data estimates that more than 124 million people listened to podcasts, up 12 million in just one year.

The rise of digital audio had a clear impetus: the smartphone. And that smartphone usage continues to drive listeners today.

With the launch of the first iPhone in 2007 and the emergence of mobile apps, the perfect channel for easy access to music and on-demand radio was born. But the meteoric rise, especially of podcasts, can be seen even more recently. From 2014 to 2018, 157 percent more people were listening to podcasts on their smartphones.

And stats from streaming music service Pandora show that smartphone app time has surged past AM/FM usage.

Another interesting player in the rise of digital audio that cannot be overlooked is the proliferation of smart speakers, such as Amazon Echo and Google Home. A study from NPR and Edison Research shows that smart speakers are most often used to stream music, so as these devices become more prevalent, digital audio will continue to gain popularity.

Advertising in digital audio: Why you need to reach digital listeners now

If the clear and continued rise of digital audio isn’t enough to convince advertisers to invest, there are a number of other reasons why it’s time to get serious about this market.

Not only is the digital audio audience increasing, but it has deep pockets.

• Edison Research reports that 45 percent of monthly podcast listeners have a household income over $75K, and 16 percent of those make more than $150K a year.

The audience is really, really listening.

• Listeners turn to Spotify as the world’s most popular music streaming service with more than 207 million users and 40 million+ songs.

• Podcast listeners are similarly obsessed. Statistics show that a “weekly podcast consumer” listens to an average of over 6 hours of programming. It's estimated that 80 percent of these listeners tune in to the entire episode of the shows they stream or download.

Digital audio is a great access point to mobile consumers.

• As the internet becomes increasingly mobile, advertisers need to expand their tactics on how to reach consumers on their devices. Since smartphones continue to be the main mediums for consuming digital audio, it’s an obvious area to set your strategies and place your bets.

Go big and go global: digital audio is an international market.

• One click to Spotify’s Musical Map of the World shows you the global reach of the platform with listeners plugged in (not literally!) across all (livable) continents.

• A Reuters study highlighted the growing podcast audiences across the world, especially in the following countries:

• And Apple podcasts features content in more than 100 languages.

A millennial movement

The primary digital audio demographics are not to be ignored. IAB notes that listenership is strongest in the coveted 18-34 age range.

Considering that millennials make up the largest population group in US history, this is a strong selling point for investing in audio.

In an effort to help advertisers reach more millennials on their platforms, Spotify undertook an effort to understand people through music, pinpointing what they call “Key Moments.” Each moment is targeted at millennials during certain everyday activities they engage in, such as cleaning or driving.

They home in on details such as how users are listening (platform), what time of day to reach them, and ideas for which genres of music to target.

What’s next for digital audio and advertising? How to get tactical

The future is bright for digital audio and opportunities for reaching its listeners. It’s an exciting time to be in the space, not only because of the evolving technologies (AirPods, smart speakers, voice control, etc.) but because of the creative marketing techniques, in addition to robust audience and measurement tactics that are being put to use.

Some of these tactics include:

Playlist personalization

Playlists have become an increasingly popular format for music consumption, from serving as the modern mixtape to reflecting and influencing cultural movements in the case of Spotify’s RapCaviar, ¡Viva Latino! and Hot Country.

Spotify has revolutionized the concept of playlist curation by introducing personalized playlists such as Discover Weekly that utilize machine learning to deliver a listening experience tailored to an individual user’s tastes and preferences. Advertisers now have the opportunity to do a full-scale sponsorship of Discover Weekly, as well as dozens of Spotify’s flagship playlists, to align their brand with the positive and personal experience of listening to and discovering music. 

Authentic ad messaging

In the modern podcasting world, successful podcasters have essentially reached rock star status—for example, the ladies of the true-crime comedy show My Favorite Murder to PJ and Alex from Reply All. Both podcasts have garnered millions of downloads, and the creators have parlayed their success into full-blown media companies (Exactly Right and Gimlet Media, respectively).

These types of successful podcasts collect legions of fans who subscribe to their shows, follow them on social media, buy their merchandise, and even buy tickets to live shows held in world-famous venues such as Radio City Music Hall.

Leveraging these cult-like relationships, brands have been giving podcasters creative reign to read the ad copy how they prefer, inject personality, and even ad-lib their own experiences. This gives the promotion a more genuine feel, increasing the chance that listeners will pay attention.

Experiential brand activations

Digital audio, like its text and video counterparts, is not only about paid media; owned media is still important. Content is still king. Keeping this in mind, digital audio provides another opportunity to find creative ways to reach an audience and influence them in an indirect manner. A fun and unique way to do so is by creating your own original digital audio content.

For example, at a recent music festival, Toyota wired its new C-HR to be a musical instrument. Festival-goers could bang on the center console, or slam the dashboard for a live drum kit effect.

In the era of programmatic, the ability to understand our audiences and effectively measure results allows brands to realize better outcomes than ever before. By coupling the above creative marketing techniques with the implementation of a strategy with a focus on relevant reach, it’s a win-win for marketers and consumers alike.

What’s more of a “mic drop” than that?

Listen up…the future is boisterous

The audio renaissance by way of digital is just getting started--and pioneers such as Spotify and Pandora are at the forefront of the revolution. The opportunities continue to materialize. Brands are finding exciting ways to insert themselves into the experience, and data providers such as Oracle Data Cloud are focusing on the significance of audience and measurement assets among partners, bridging the gap between attention and outcomes.

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Contact the Data Hotline to learn more about the Oracle Data Cloud commitment to digital audio and how we partner with Spotify and Pandora to offer best-in-class data solutions.