US brands are only allocating 8.8% of their media budgets on audio, despite consumers spend as much as 31% of their media time immersed in audio, according to research conducted by marketing trade body WARC with iHeartMedia, which owns more than 860 live broadcast radio stations across the US.
Though WARC expects audio ad spend to reach $13.9 billion in the US this year, ‘The Investment Gap: Understanding the Value of Audio’ highlights that that there is a clear audio gap not being recognised by advertisers.
“The changing role of Audio has been a relatively under-researched area of the Marketing Media Mix. This study, with iHeartMedia, starts to address that,” said Paul Coxhill, Managing Director at WARC. “The study investigates whether there’s a disjoint between consumer consumption and media allocation of audio as a channel. The findings are fascinating and demonstrate a real opportunity for brands to expand their brand reach and, if done well, their share of consumer attention by expanding the role of Audio in their media mix.”
The study identified four different types of advertiser attitude toward audio: the audio avoiders – 25% of advertisers don’t invest in audio at all; the broadcast believers, who have seen the benefits of radio and are now starting to explore other forms of audio; digital-only advertisers, which is those that invest in audio, but are missing out on other areas, such as the 90% monthly reach of broadcast radio uncovered by Nielsen; and the cross-platform champions, who delve into audio’s feel potential and continue to optimise across platforms.
The research also highlights how audio can be used effectively at different scales and across the entire funnel, finding that it can be used to increase brand awareness, create favourability, and spart conversion.
“The Audio Investment Gap is the single-biggest growth opportunity for brands,” said Gayle Troberman, Chief Marketing Officer at iHeartMedia. “With the growth of wireless headphones and smart speakers paired with in-car listening, audio is everywhere and consumers are listening in more places, more times throughout the day. But too many brands are on mute. Brands that right-size their audio investments and begin spending and innovating across radio, streaming and podcasts outpace competitors in finding new audiences, building brand affinity and driving sales.”