Streaming audio 101: Audio ads for the digital age

Sure, we live in a screen-dominated world. But think of all the screenless moments in your day: your morning run to the rhythm of your favorite workout jam; your commute in the company of your go-to podcast; you and your cooking playlist, frying up a storm in a garlic-and-za'atar scented kitchen. And, come nightfall, snug in bed, a soothing music mix lulling you to sleep.

If this sounds familiar, you're not alone. Sixty-nine percent of Gen Z and millennial Spotify listeners feel digital audio is the soundtrack to their daily lives.¹ And according to eMarketer, adults will spend more time consuming digital audio this year than they will other forms of digital media content.²

This has advertisers looking harder than ever at the potential of digital audio advertising. But how do audio ads compare to radio ads? What types of audio ads are available? And just how effective are audio ads, really? Read on to learn more.

Audio ads vs. radio ads

While radio is still going strong, digital audio's 55% share of the audio market in 2022 means it's outpaced radio's popularity.³

Audio ads appear in digital audio content—such as music and podcasts—enabling brands to access a reach similar to radio's. But beyond this, the "digital" aspect of digital audio gives audio ads a level of performance and precision that radio ads simply aren't capable of, including:

• Analytics. AM/FM radio can only provide advertisers with an estimate of its audience. Because listeners log into Spotify, advertisers get a more accurate view of who hears their ads and where—which means you'll know how much impact your ad really has, and you can optimize your campaigns accordingly.
  
  
• Targeting. Accurate and comprehensive listener data means advertisers are able to fine-tune their control of audience targeting to an extent AM/FM radio can't offer.
  
  
• Context. Spotify listeners consume content throughout their day. And they do so on multiple devices, from phones to TVs and game consoles. This provides invaluable contextual data, and for advertisers, getting the context right—the right message, the right setting, the right time—is the trifecta.
  
  

The end result? Digital audio ads enable you to use hyper-relevant messages to connect with your audience in a way radio ads simply can't match.

Choose your flavor

With all these benefits, digital audio ads look pretty good when it comes to advertising for business. But what's next? As a Spotify advertiser, here are three types of ads you can choose from.

Audio ads. Spotify audio ads are 15- or 30-second-long ads that play between songs. They're sometimes combined with a companion display ad, which serves as a visual element. Listeners see the display ad, including a call to action (CTA), when they engage with the Spotify app during an ad break.

Podcast ads. Spotify podcast ads play during podcasts. They're anywhere from under 30 seconds to 60 seconds long. Either the podcast host or a voice actor reads the ad aloud.

• A host-read ad establishes a strong emotional connection with listeners since the message comes from someone they know and trust. Reading in a style that listeners are familiar with also provides an uninterrupted experience.
  
  
• A voice-read ad involves pre-recorded audio by voice talent that's tailored to the podcast environment. You can use the ad to scale across different podcast shows and audiences.
  

Spotify's Streaming Ad Insertion (SAI) technology means your podcast ad appears in episodes of Spotify O&E podcasts as listeners stream them. The result? Your ad plays in real-time, rather than as part of a downloaded episode—which listeners might or might not hear in its entirety. CTA cards can make your podcast ad even more interactive.

Video ads. Spotify video ads can run independently or complement your audio ads. Unlike on other platforms, where video ads are often muted, video ads on Spotify have one big advantage: Listeners engage with Spotify with sound on and volume up.

Plus, your video plays only when users are looking at the app. This means when you choose Spotify's video ads, you can be confident that your ad will appear only when the screen is in view.

There are two types of video ads to consider:

• Video Takeover ads appear when a listener is actively browsing through the Spotify catalog, giving you ad industry-leading viewability.
  
  
• Sponsored Session ads initiate Spotify's 30-minute ad-free music listening sessions, delivering your message in a sound-on, 100% share-of-voice environment.
  

Video ads can also be combined with audio ads to achieve outstanding results. Spotify’s ad technology is fuelled by user context, meaning we optimize when to serve a video ad and when to serve an audio ad based on how a listener is interacting with the app. We serve an audio ad when listeners are streaming and not looking at their screens, and video ads when they are focused on their screens. Run an audio-video advertising campaign with Ad Studio to ensure your message is heard and seen.

Audio ads work. Here's why.

First, let's talk numbers. People are listening: By the end of September 2022, Spotify had reached 456 million MAU globally (up 20% YoY), of which 274 million were ad-supported MAU (up 24% YoY)—with ad-supported revenue growing 19% YoY.⁴

But what's really interesting isn't how many people are listening—it's how they're listening—from working out, studying, commuting, cooking, partying, and even sleeping. Spotify's Streaming Intelligence harnesses the context behind listeners' streaming habits to give you an understanding of your audience—one that traditional demographics can't deliver.

These insights power Spotify's unique contextual audience targeting, letting you create ads that match your listeners' audio experience. Imagine, for example, a cookware ad playing while someone listens to a cooking playlist they've curated. Or an ad for a meditation retreat on a podcast episode about mindfulness. With digital audio ads, you're delivering a message that seamlessly blends into your audience's environment.

The precision targeting behind digital or online audio advertising makes audio ads a powerful medium that advertisers can use to connect with an engaged audience.

Learn more about how to get started with Spotify Ad Studio.