CMOs are working with limited spending power, prompting a critical examination of resource allocation and a quest for cost-effective yet high-impact solutions. Gartner reveals that 71% of CMOs believe they lack sufficient budgets to fully execute on advertising strategies, and GroupM expects U.S. ad spending to increase 5.1% in 2024, lower than India, China, Germany and Brazil.
The silver lining? Diversifying advertising budgets with omnichannel media, like digital audio, will help advertisers reach unique and performative audiences at scale, with mere clicks of a button.
One of the many platforms that brands have embraced over the last few years to make the most of their advertising budgets is Retail Media Networks (RMN). Retailers have begun leveraging their substantial customer purchase data to inform advertiser’s media strategies. With the help of programmatic platforms like The Trade Desk, hundreds of retailers can monetize their shopping data, or take monetization a step further by providing managed service advertising campaigns — allowing an agency to operate programmatic campaigns — targeted with their shopper data. According to McKinsey, the growth of RMNs could represent as much as $100 billion in ad spending by 2026.
Many RMNs, like Kroger, choose to offer a more hands-off approach to monetizing their shopping data, by offering self-service programmatic buyers the ability to target their advertising campaigns with shopping data via data marketplaces. This way buyers can choose what media channels perform best.
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Retail Media Networks that offer managed service advertising solutions are likely to take a more active approach to channel selection. They may partner directly with publishers to match data with their media or outsource help from inventory management teams. The goal of this complex equation is to find the optimal data and channel mix to achieve maximum value for brands.
Programmatic platforms have made embracing “other” omnichannel solutions, including digital audio, very easy for RMNs and self-serve buyers. Simply by checking a few boxes in your programmatic platform, new inventory types are ready to activate and test. You may be missing out on a great audience if you’re not testing with audio.
Digital Audio Meets Consumers Where they Spend Their Time
In 2022, 74% of US internet users, or 222.7 million people, listened to digital audio, according to eMarketer. Another report by eMarketer released this year claims that by 2024, digital audio will make up one-fifth of all time spent with digital media in the US. Digital audio will claim 2 hours, 20 minutes (2:20) per day from U.S. listeners in 2023, which is more time than Netflix (1:02), Hulu (0:53) or YouTube video (0:48), according to this report.
Audio also drives impressive engagement within a distraction-free, hands-free environment. On average, 41% of audio ads generated correct brand recall. compared to the 38% norm for other advertising studied by Dentsu.
An Opportunity for Share of Voice
iHeartMedia recently published that the average American spends 31% of their time with audio against all mediums, and considerable investment is flowing into digital audio, which indicates a favorable environment, but brands continue underinvesting in it.
Even though digital audio provides such a strong platform for reaching consumers, only about 3% of advertising dollars were spent on this channel last year, very significantly underfunded relative to channels like CTV that take center stage in most media plans.
The sheer number of hours spent listening to music streaming and podcasting digitally presents an opportunity for Retail Media Networks to provide brands with unparalleled share of voice in this channel for absurdly efficient CPMs.
If your RMN was offering 30-second targeted CTV ads in the U.S., it isn’t unreasonable to expect expensive CPMs upwards of $30. Selling digital audio ads, with the same duration and similar targeting methods, would reach an audience with better brand recall, at considerably lower CPMs.
What has Prevented Digital Music Streaming and Podcast Investment?
While there are a few reasons for the slower adoption of digital audio, perhaps the most central for programmatic platforms has been measurement and attribution. Many buyers perceive that the digital streaming assets of broadcast radio publishers won’t give the same attribution and measurement as other channels, even with extensive listenership on mobile devices and smart speakers. This misconception was warranted at one point, when supply-side platforms weren’t advanced enough to focus on addressability; however, this has since been combatted by strong tech partnerships with user identification companies.
Identity resolution for digital streaming has grown to be reliable and prevalent enough to be a very strong selling point for digital audio. Digital audio listeners are typically identifiable (the same way CTV listeners are identified) but often will be listening alone on mobile devices, which makes advertising more of a personal experience. Pair digital audio’s additional capabilities to identify and target users with the equitable measurement and attribution solutions used for other channels to find new consumers to drive performance for your brands.
If you are a retailer that wants to build awareness, grow customer engagement and increase sales for brands that trust you to carry their products, audio should be included in the marketing mix, as it provides contextual relevance, is brand-safe and — most importantly — consumer-centric. Leaving audio out is leaving money on the table.
Joshua Yamuder, Director of Partnerships, Programmatic Marketplace at Triton Digital, employs his agency experience and programmatic acumen to build confidence among brands and to help broadcasters extract more value from their audio inventory. Yamuder joined Triton Digital in October 2022 from Targetspot, where he was Programmatic Manager, North America. Prior to Targetspot, Yamuder held the position of Programmatic Specialist at Xaxis, a global GroupM programmatic-first agency. At Xaxis he consulted with large Mediacom clients to plan and execute omnichannel programmatic campaigns. In his current role on Triton Digital’s Revenue Team, Yamuder collaborates with key broadcast clients to align advertiser goals with broadcast’s diverse audio offering.
