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Why marketers see audio as a ‘strong format’ worth investing in next year

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Why marketers see audio as a ‘strong format’ worth investing in next year

At a time when advertising across many sectors is slowing down, podcast and audio investments might remain strong in the next year.

The audio business is continuing to grow on platforms, from live streams to exclusive shows, with varying success. Players from Spotify to Pandora owner SiriusXM saw ad revenue grow in the second quarter, whereas tech giants like Meta saw dips. Additionally, with Twitter and YouTube recently introducing podcast features, there are growing options for brands and creators to generate additional revenue and reach another demographic.

Experts say podcast listeners are a sticky audience, and the content offers more flexible ad formats. That might explain why the podcast advertising spend has grown from $806 million in 2018 globally to $2.6 billion this year, according to research firm WARC. In 2023, it is projected to reach nearly $2.8 billion globally, accounting for 26.8% of all online audio investments. By comparison, global ad investments in radio will drop an estimated 2.4% next year.

“Most people are running or driving or doing something while listening, and I don’t think they’re skipping through the ads,” said Nadia Gonzalez, CMO at Scibids. “Audio ads are a strong format at the moment.”

The variety in ad formats and devices to reach consumers is helping drive interest to this medium – from earbuds and speakers to smart home devices and car listening. The podcast format is effective, especially if you have an audience that likes a show or its creator, said James McDonald, director of data, intelligence and forecasting at WARC.

Many shows integrate host-read ads, for instance, which currently account for the largest share of ad spend in audio, according to WARC. One downside to host-read content is the fact that it’s not easily scalable. But to believers in the medium, that’s not an obstacle.

“Listeners have been found to not only understand but accept the value exchange of podcast advertising when it supports the content, and this can be a potent draw for brands as audiences often have a deep engagement and affinity with shows,” McDonald said.

And with more devices for listening available, more adoption will lead to newer audio ad formats, such as shoppable or interactive ads. Paul Kelly, chief revenue officer of A Million Ads, believes podcasting as an ad-supported medium is “currently under-monetized.”

“Adding to cart [or] saving to a bookmarking list creates an entirely net new advertising surface for those moments where we are not actively consuming media,” Kelly said.

In fact, independent agency Ocean Media recently started a new podcasting team as more of its clients expand into that media. CEO Jay Langan said streaming and podcasting are by far their biggest areas of growth now. Ocean Media worked with car platform Vroom, for instance, aiming for a younger, tech-savvy audience with new media channels. After investing in a mix of podcasts and talk shows, such as “First Things First” and “Conan O’Brien,” the brand achieved 10% more efficiency in its upper funnel metrics and 43% more efficiency in the lower funnel.

“We’re pretty bullish on just the continued growth around podcasts,” Langan told Digiday. “It seems like something that at first people weren’t adopting as quickly and… in the last couple years, a lot of the audience members have just gone through the roof.”

Jared Lake, head of media investments at Ocean Media, explained that brands are very interested in the “high degree of affinity audiences have with shows.” He said compared to other channels, listeners find podcasts have less ad clutter. Brands also find that podcast content offers more creative flexibility than other ad formats elsewhere.

“Given the number of ads in most shows, there is ample opportunity for brands to leverage that affinity,” Lake said. “Podcasts are an excellent environment to experiment with messaging and storytelling and not be constrained to a 30-second ad format. When you combine that flexibility with the affinity audiences have for the shows they love using with host-read ads, you have a winning formula.”

The other upside to podcasts is their potential to tap into a younger demographic as their consumption increases. In March 2022, Triton Digital and Edison Research found that Spotify was the No. 1 digital audio service for teens and adults in the U.S., with 35% of listeners age 12 and older using the service most. In turn, Spotify saw about a 40% increase in average podcast listening for Gen Z in Q1 2022 compared to the previous year.

This year, more than a quarter of digital audio ad revenues will come from podcasts, according to Adludio, a firm that produces mobile ads for agencies and brands. But Adludio CEO Paul Coggins contends that companies like Spotify still have “a long way to go” in convincing advertisers their platforms are effective at reaching younger people.

“More and more tech giants are offering podcasts, but the likes of YouTube still need to prepare holistic ad solutions within their platforms in order to cement the trust of privacy-conscious audiences,” Coggins said.

https://digiday.com/?p=465290

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As PCWorld’s senior editor, Mark focuses on Microsoft news and chip technology, among other beats. He has formerly written for PCMag, BYTE, Slashdot, eWEEK, and ReadWrite.

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NASA Says Hurricane Didn’t Hurt Artemis I Hardware, Sets New Launch Window

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NASA Says Hurricane Didn’t Hurt Artemis I Hardware, Sets New Launch Window

NASA’s Artemis I moon mission launch, stalled by Hurricane Ian, has a new target for takeoff. The launch window for step one of NASA’s bold plan to return humans to the lunar surface now opens Nov. 12 and closes Nov. 27, the space agency said Friday. 

The news comes after the pending storm caused NASA to scrub the latest Artemis I Iaunch, which had been scheduled for Sunday, Oct. 2. As Hurricane Ian threatened to travel north across Cuba and into Florida, bringing rain and extreme winds to the launch pad’s vicinity, NASA on Monday rolled its monster Space Launch System rocket, and the Orion spacecraft it’ll propel, back indoors to the Vehicle Assembly Building at Florida’s Kennedy Space Center. 

The hurricane made landfall in Florida on Wednesday, bringing with it a catastrophic storm surge, winds and flooding that left dozens of people dead, caused widespread power outages and ripped buildings from their foundations. Hurricane Ian is “likely to rank among the worst in the nation’s history,” US President Joe Biden said on Friday, adding that it will take “months, years, to rebuild.”

Initial inspections Friday to assess potential impacts of the devastating storm to Artemis I flight hardware showed no damage, NASA said. “Facilities are in good shape with only minor water intrusion identified in a few locations,” the agency said in a statement. 

Next up, teams will complete post-storm recovery operations, which will include further inspections and retests of the flight termination system before a more specific launch date can be set. The new November launch window, NASA said, will also give Kennedy employees time to address what their families and homes need post-storm. 

Artemis I is set to send instruments to lunar orbit to gather vital information for Artemis II, a crewed mission targeted for 2024 that will carry astronauts around the moon and hopefully pave the way for Artemis III in 2025. Astronauts on that high-stakes mission will, if all goes according to plan, put boots on the lunar ground, collect samples and study the water ice that’s been confirmed at the moon’s South Pole. 

The hurricane-related Artemis I rollback follows two other launch delays, the first due to an engine problem and the second because of a hydrogen leak.

Hurricane Ian has been downgraded to a post-tropical cyclone but is still bringing heavy rains and gusty winds to the Mid-Atlantic region and the New England coast.

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