Demand for digital audio—think streamed or downloaded podcasts, albums, and songs—is on the rise, and we're not just talking about a minor uptick. Right now, there are more than 4 million podcasts registered around the world, according to recent stats from Podcast Index.1 By the end of 2025, there are expected to be more than 144 million monthly podcast listeners in the U.S. alone.2 At Spotify, we now have 433 million global monthly active users, up 19% from last year.3
Simply put, people are spending more time with digital audio than ever before. What's more, additional research shows that this year, time spent with podcasts is expected to increase by more than 16%—it's set to top 23 minutes per day.4
It's no wonder so many advertisers are on board with digital audio advertising. In the second quarter of 2022, Spotify's ad-supported revenue grew by 31% as more brands discovered the value of audio ads. Its value as a channel was even recognized—and celebrated—at Cannes Lions this year, with more submissions in the Radio + Audio categories than ever before.
Let's take a look at the advantages of streaming audio as an advertising medium and why it's shaking up the ad industry.
The elevated digital audio experience
What's the appeal of digital audio? For starters, it's more popular than traditional radio. Listeners now spend 30% more time with digital audio services than with broadcast radio—and for good reason.5 Research Spotify conducted in collaboration with Neuro-Insight found that digital audio listeners have an elevated listening experience compared to broadcast radio, resulting in more memorability, engagement, and emotional intensity.6
But digital audio isn't just more engaging than radio. It also outperforms TV and social media. Neuro-Insight's research shows engagement with the Spotify platform in June of 2021 was 127%, compared with 104% for TV, 100% for social media, and 94% for broadcast radio.7
When engaging with digital audio, listeners are often going about their daily lives—working out, commuting, cooking, etc. Audio is different from other mediums in that it not only immerses listeners in the content, but can also reach them wherever they are and whatever they're doing.
The advantages of digital audio advertising
There are many benefits of digital audio advertising. For one, audio is engaging and immersive. There are fewer screen-related distractions and it feeds listeners' imaginations—perhaps inspiring them to launch a company after hearing advice on a business podcast, or maybe providing motivation while they're working out.
Crucially, streaming audio also allows listeners to curate personalized soundtracks to match the moment they're in. In fact, more than 70% of Spotify listeners in the U.S. use audio differently depending on where they are, what they're doing, and who they're with.8
For advertisers, personalized playlists are important because they offer the opportunity to create equally customized messaging that's relevant to listeners' personalities and interests. According to Twilio Segment's The State of Personalization 2021 Report, more than one-third of consumers say they'll return to a brand after a personalized experience, even if it isn't the cheapest or most convenient option.9
Audio advertising trends
The way people engage with digital audio is constantly evolving, creating new opportunities for brands to connect. Wondering what the biggest trend in audio advertising is right now? Arguably, it's the use of smart home products like smart speakers, which enable consumers to listen throughout their homes. Studies show that by the year 2025, there will be more than 400 million households using smart home products and services worldwide.10
Since smart speakers allow people to spend even more time listening to digital audio, advertisers stand to benefit from increased reach. This digital audio advertising trend could pave the way for huge ROI—especially given that 53% of smart speaker owners who have heard a promotional message on their device say they're likely to respond to such ads.11 We also know that as listeners transition back and forth from music and podcasts to ads, 93% of the brain's engagement with the audio content is directly transferred to ad engagement.12 That can potentially lead to better ad performance, more memorable campaigns, and improved results.
How to get started with digital audio advertising
The advantages of audio advertising are clear: It's a sound strategy for brands looking to build strong, lasting connections with audiences. With unique targeting tools, creative services, and real-time reporting all wrapped up in an easy-to-use platform, Spotify Ad Studio allows businesses of all sizes to create audio ads that serve their unique needs. Those custom digital audio ads can help you reach engaged listeners and meet your advertising objectives.
Ready to embrace this effective ad format? Find out exactly how it works, and start creating digital audio ads today.
SOURCES: 1. "Podcast Index." 2. "Podcast Industry Report: Market Growth and Advertising Statistics in 2022," Insider Intelligence/eMarketer. July 2021 3. Spotify Internal Data, MAU Trend by Demo, Spotify First Party Data, Q1 2022 vs. Q1 2021. Spotify Culture Next vol. 4, 2022 4. "Podcast Industry Report: Market Growth and Advertising Statistics in 2022," Insider Intelligence/eMarketer. July 2021 5. GlobalWebIndex, Q1-Q2 2019 & Q1-Q2 2020, US. August 2020. 6. Sonic Science research, part one, Neuro-Insight and Spotify. June 2021 7. Sonic Science research, part one, Neuro-Insight and Spotify. June 2021 8. "Culture Next Report, Spotify trend survey among 500 US Spotify Users 15-37." February 2019 9. "Announcing Twilio Segment's The State of Personalization 2021 Report," Twilio Blog. June 2021 10. "Number of households with smart home products and services in use worldwide from 2015 to 2025," Statista. March 2022 11. "The Smart Audio Report," National Public Media. June 2022 12. Sonic Science research, part one, Neuro-Insight and Spotify. June 2021