As audio continues to explode with on-demand content building on the base of traditional over-the-air radio, the Interactive Advertising Bureau is addressing the disparity between the time consumers spend on audio and the advertising revenue it receives.
In 2021, WARC’s analysis found that AM/FM, streaming audio, and podcasts accounted for 31% of consumers’ media time but attracted only 9% of ad budgets. In 2024, Americans are devoting nearly 20% of their daily media time to audio, yet the IAB shows advertisers allocate only 3.1% of digital ad budgets to audio, as shown in the latest IAB Internet Advertising Revenue Report.
Digital audio’s ad revenue in 2023 was just 14% of what was spent on TV, even as audio listeners often spend more time with the medium than the average television viewer. Social media demonstrates a similar disparity. Despite listeners’ preference for audio, social media garnered $65 billion in ad revenue in 2023, overshadowing digital audio by 828%.
As audio and podcasting continue to flourish, their audiences have become a valuable demographic for advertisers, states IAB.
Audio listeners tend to have higher purchasing power, with streaming audiences 5% more likely to buy major appliances, 9% more likely to buy a new vehicle, and 14% more inclined to invest in high-cost home furnishings. Podcast listeners are even more valuable to advertisers, as they are generally younger, well-educated, and higher-income.
IAB highlights how listeners of streaming audio and podcasts find their content between 1.6 to 6.6 times more authentic than streaming video, and they hold audio platforms in higher regard than social media. This trust factor translates into higher receptivity to advertising messages, particularly among younger audiences like Gen Z and Millennials, who see audio content as an essential part of their daily lives.
The IAB cites recent studies from dentsu and Lumen Research, where audio advertising was found to generate 56% more attentive seconds per thousand impressions than other media formats. Audio also performs 66% better than digital video and 155% better than social media in capturing consumer attention. Audio advertising has proven to lift brand recall by 8% and boost brand choice by 67% over dentsu’s benchmarks.
When paired with Connected TV, audio drives significantly higher brand metrics. According to a Nielsen study, combining streaming audio with CTV ads raised both unaided and aided recall. Podcasts, when combined with CTV campaigns, further boosted message association and brand favorability.
As measurement capabilities improve, IAB says brands are doing a detriment to themselves by not closing this gap in audio advertising. By investing in a medium that has proven, measurable effectiveness. Brands will not only reach listeners in a personal way but also amplify the impact of their overall media plans and drive meaningful business outcomes.
The full study is available on the IAB website.
old news. value is largely established by price and we grossly undercharge