Ad Buying Opportunity in Podcast Advertising
and Streaming Audio Audiences

Online audio advertising is a rapidly growing opportunity. Podcast advertising has the ability to access highly targeted audiences. Is this the next big thing media buying? Is it time to transition social media advertising budget to audio?

Consumer behavior research firm Edison Research has published The Infinite Dial annually since 1998, making it the longest running survey of its kind. Its report for 2019 reported a clear trend across the major social networking brands and quantifies changes that articulate a growing opportunity to reach new audiences with online audio advertising. 

Troubling Signs For Social

Social media in the United States has a user base of some 223 million, huge by any measure. As a percentage of US resident 12 years old and over, users were up 2% after it losing 3% two years ago

Percentage of US Residents Using Social Media

12 years old and older

2017: 80%
2018: 77%
2019:79%
Total Users: 223 Million

While that may be a small positive on the overall outlook, when the usage is broken down by network the outlook is a bit more bleak.

Social Media Brand Usage

Total Population Age 12+
% Using Social Media Brand

It Is Time To Take Online Audio Advertising Seriously 1
  • 2017 67% 67%
  • 2018 62% 62%
  • 2019 61% 61%
It Is Time To Take Online Audio Advertising Seriously 2
  • 2017 34% 34%
  • 2018 36% 36%
  • 2019 39% 39%
It Is Time To Take Online Audio Advertising Seriously 3
  • 2017 29% 29%
  • 2018 31% 31%
  • 2019 31% 31%
It Is Time To Take Online Audio Advertising Seriously 4
  • 2017 30% 30%
  • 2018 31% 31%
  • 2019 31% 31%
It Is Time To Take Online Audio Advertising Seriously 5
  • 2017 22% 22%
  • 2018 22% 22%
  • 2019 22% 22%
It Is Time To Take Online Audio Advertising Seriously 6
  • 2017 23% 23%
  • 2018 21% 21%
  • 2019 19% 19%

Facebook Has A Demographic Problem

Facebook remains the clear leader in the industry. The Infinite Dial estimates Facebook has a huge user base of 172 million in the US. It has is just short of double the percentage of the total population of any of its competitors except Instagram, which it owns. It’s industry leading position is obvious.

There are significant signs of concern in how its user base is changing. It has lost some 15 million users since 2017. Even more glaring is how its age demographics are changing.

Facebook Usage

US Population
% Using Facebook

Age 12-34
  • 2017 79% 79%
  • 2018 67% 67%
  • 2019 62% 62%
Age 35-54
  • 2017 72% 72%
  • 2018 69% 69%
  • 2019 69% 69%
Age 55+
  • 2017 49% 49%
  • 2018 49% 49%
  • 2019 53% 53%
The sharp decline in the 12-34 year old bracket is shocking but could be driven by teens. In data gathered in the first quarter of 2018, Pew Research found that the percentage of Americans using Facebook in the 18-24 bracket was still extremely high (80%) while falling off a cliff for 13-17 year olds (51%).

Facebook Controversies

In any assessment of the company’s future it is worth considering that the brand has experience significant damage over privacy issues in the last few years.

Congressional hearings on Facebook and privacy have led to calls for regulatory intervention from some in congress that include Sen. Mark Warner from Virginia. Some have called for anti-trust intervention to break the company up including Rep. David Cicilline and presidential candidates Kamala Harris and Elizabeth Warren. That perspective was amplified by Facebook co-founder Chris Hughes recently writing an op-ed in the New York Times calling for the company to be divided. Facebook is pushing back in comments by Mark Zuckerberg and the company’s head of global affairs Mark Clegg. Whether or not those suggestions are misguided, the discussion is not helping the company attract users.

Facebook Controversies

In any assessment of the company’s future it is worth considering that the brand has experience significant damage over privacy issues in the last few years.

Congressional hearings on Facebook and privacy have led to calls for regulatory intervention from some in congress that include Sen. Mark Warner from Virginia. Some have called for anti-trust intervention to break the company up including Rep. David Cicilline and presidential candidates Kamala Harris and Elizabeth Warren.

That perspective was amplified by Facebook co-founder Chris Hughes recently writing an op-ed in the New York Times calling for the company to be divided. Facebook is pushing back in comments by Mark Zuckerberg and the company’s head of global affairs Mark Clegg.

Whether or not those suggestions are misguided, the discussion is not helping the company attract users.

It Is Time To Take Online Audio Advertising Seriously 7

Common Sense Assumptions

We can safely assume Facebook has likely reached the top of the mountain. Its market share is ridiculous. We could see small changes in a positive direction but the days of new people discovering Facebook, or any of the social media advertising platforms, in any volume. are likely certainly over. We can also be relatively sure that those now 13-17 are not going to suddenly discover Facebook’s appeal when they turn 18. As those people age into buyers age, Facebook has a problem. Facebook advertising is still extremely relevant and can be a powerful traffic generation tool. Its user base is still massive and while costs vary greatly based on a number of variables, they are relatively affordable. It is always a good idea to consider alternatives. With the future of Facebook seemingly regression, those that rely on Facebook exclusively, or for a significant portion of their ad spend, should consider other options. Can digital audio advertising be one of those options? Should podcast advertising be on your radar?

Online Audio Soaring

The same study by Edison Research that found troubling signs for social media also found strong growth in those listening to AM/FM radio streaming online or audio content exclusively available online. This change in audience behavior and the age demographics with it leads to an ongoing and growing reach with online audio advertising. Withing the range of available audio formats, podcast advertising represents some interesting and unique features. 

An estimated 189 million in the US, 67% of those age 12 and over said they had listened to online audio in the last month. When the question was asked for over the last week, the number dropped to only 60%.

The historical trend is one of rapid growth.

Weekly Online Audio Listening

Total US Population age 12+

% Listened to in the last month

  • 2015 44% 44%
  • 2016 50% 50%
  • 2017 53% 53%
  • 2018 57% 57%
  • 2019 60% 60%
The average time per week listening reached an all-time high in the study at more than 16 minutes.

While we saw a drop off in Facebook with younger users. young people are more far more likely to be engaging in online audio.

Monthly Online Audio Listening

% Listened to in the last month

Age 12-34
  • 2017 87% 87%
  • 2018 88% 88%
  • 2019 91% 91%
Age 25-54
  • 2017 70% 70%
  • 2018 73% 73%
  • 2019 74% 74%
Age 55+
  • 2017 32% 32%
  • 2018 33% 33%
  • 2019 40% 40%
Having the reverse problem of Facebook, consumers of online audio has tremendous buying power aging into its market in coming years.

Online Audio Brand Consumption

With the number of streaming services and types of products available there are many options to consume that can overlap. Pandora and Spotify also offers a wide range of podcasts.

Audio Brands Listened To

Total US Population Age 12+ % Listened to in the last week

  • Pandora 22% 22%
  • Spotify 20% 20%
  • Apple Music 11% 11%
  • Amazon Music 11% 11%
  • IHeartRadio 8% 8%
  • Google Play All Access 5% 5%
It should also be noted that 50% of the US population is estimated to have used YouTube in the last week for music or music video.
podcast-advertising

Podcast Shows Huge Gains

Awareness and a growing listener base with online audio advertising formats is the podcast. An estimated 197 million viewers are familiar with podcasts, 70% of the US population. That is a 6% rise since last year’s results and 10% increase since 2017. Other results were just as significant.

Monthly Podcast Listening

Total US Population Age 12+
% Listened to in the last month

  • 2015 17% 17%
  • 2016 21% 21%
  • 2017 24% 24%
  • 2018 26% 26%
  • 2019 32% 32%

Monthly Podcast Listening

Total US Population Age 12+
% Listened to in the last month

Men

  • 2017 27% 27%
  • 2018 27% 27%
  • 2019 36% 36%

Women

  • 2017 21% 21%
  • 2018 24% 24%
  • 2019 29% 29%
With the medium growing across the board in total users, men and women, the age breakdown isn’t surprising. That growth is coming in the important 25-54 bracket is encouraging for would be advertisers.

Monthly Podcast Listening

Total US Population
% Listened to in the last month

Age 12-34
  • 2017 27% 27%
  • 2018 30% 30%
  • 2019 40% 40%
Age 25-54
  • 2017 31% 31%
  • 2018 32% 32%
  • 2019 39% 39%
Age 55+
  • 2017 12% 12%
  • 2018 13% 13%
  • 2019 17% 17%

Streaming and Podcast Advertising

Social advertising is still very relevant. Facebook is still a powerful platform to reach a massive audience while its targeting options are powerful. Learning how to build your own audiences, outside its targeting options, is a powerful way to limit your costs. With the rapid growth rate of online audio with both men and women in important age demographics, advertising options are worth considering to augment your strategy.

advertising on spotifySpotify

Until it introduced Spotify Ad Studio in 2017, a campaign on Spotify started at $25,000. Not realistic for most advertisers. Ad Studio is a self service platform to create audio ads created to enable the company to attract small and mid-sized businesses. You can now run a campaign starting at $250.

Its rates run from $5 to $30 CPM for larger budgets based on format. Its ad studio prices typically start at around $15 CPM based on targeting options.

advertising-on-pandoraPandora

Pandora has a rich set of targeting options including age, sex, location, hobbies and more. It uses a recurring monthly with a required budget starting at $1,500.

There are three types of ads on Pandora: visual, audio and video. Rates are CPM and start at $5, $8 and $15, respectively.

podcast-advertisingPodcast

Podcast advertisement can be very rewarding. Not only is the format growing, but they also tend to be very niche specific. Almost certainly  there is a podcast focused on your niche. That makes targeting the right audience very easy.

There are networks for podcast advertising where prices ranges from $18 to $50 CPM. While expensive, finding the right podcast for your niche can be highly effective targeting. However networks want to attract larger audiences which may not have the highly targeted audience you are looking for.

Two of the available networks for podcast advertising include Advercast and Midroll.

Reaching out to relevant podcast hosts directly is a lot more work but gives you far more access to find the very specific audience that you are looking for. Ahrefs has an extremely detailed piece on how they found success with podcast advertising that is well worth the read.

Is Online Audio Advertising The Next Thing?

While audiences are flattening out, or in some cases regressing, social advertising is still a powerful force. While Facebook is regressing it still has a massive audience and Facebook advertising targeting is still excellent technology when you need to find an audience.

Online audio advertising is here. WIth Spotify making access available for small and medium size business in 2017, it arrived. Both Spotify and Pandora have the ability to target on multiple criteria to refine your audience, though not as tightly as tools provided by networks for social media advertising. If your target market ranges in the teen years or early twenties, there could be some strong value for you there.

Podcast advertising can be huge when matching the right niche. If you are targeting a broad audience rather than a niche, ad networks can be a good resource to test multiple shows to see whose audience engages with your brand.

While direct outreach to casters can be time consuming and pricing structured in multiple different ways, this can also turn a massive return. Targeting a broadcast that fits your micro-niche can reach a highly targeted audience.

The biggest advantage to having a direct relationship with hosts is the authenticity of the reach. Rather than submitting a 30 or 60 second recorded spot or providing ad copy for a live read, having a direct relationship with hosts and engaging with them to ensure they understand your product changes the nature of your spend. Rather than an advertisement the host you are sponsoring can now talk about your product in an organic way.

Organic reach will always out perform advertising. Podcast advertising is the only format in online audio that can deliver that.

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