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How digital audio can help Retail and CPG brands win the path-to-purchase

Spotify partnered with WARC—a leader in global marketing insight and intelligence—to investigate digital audio’s role along the marketing funnel for the CPG and Retail sectors in North America and Europe. As brands and retailers evolve to keep pace with the industry, this report highlights fresh opportunities to get one step ahead by leveraging digital audio. Read on to discover the three key findings of the study.

In the fast-paced world of retail, gaining awareness and fostering loyalty are paramount. The key lies in meeting consumers' expectations, which—in the age of instant gratification and seamless personalization—only continue to rise. Preferred brands not only need to know their audience intimately, but also offer relevant products and unforgettable, tailor-made experiences that cater to their unique needs.

However, achieving this feat in today's retail landscape is no easy task. With an ever-expanding array of options available to consumers, brand loyalty is harder to come by than ever before.

The challenge doesn't end there. Advertisers must navigate a dynamic media environment, strategically crafting the perfect blend of messages and channel distribution to captivate their target audience effectively within the contemporary media space. It's a thrilling and intricate dance where creativity, technology, and human connection converge to shape the future of advertising.

In order to better understand the current alignment between advertisers and consumer media engagement, Spotify partnered with WARC—a leader in global marketing insight and intelligence—to investigate further. Our research explores digital audio’s role along the marketing funnel for the CPG and Retail sectors in North America and Europe. It analyzes the current industry landscape through surveys of over 350 CPG and Retail marketers, and identifies opportunities to leverage digital audio as brands and retailers evolve to keep pace.

Aditya Kishore, Director of Insights, WARC, says: “The challenge in determining the optimal media mix has intensified steadily in recent years for advertisers. This report developed with Spotify provides valuable insight into the media landscape across the two continents and the potential role for digital audio in navigating an era of extraordinary media fragmentation.”

This summary will focus on the three key findings of the study. Get the full report by filling out the form below.

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Key Finding #1:

As the path-to-purchase evolves and marketers seek improved ROI, Retail & CPG brands are rethinking their media strategies.

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• Consumer expectations have changed dramatically in recent years, and marketers must explore new strategies to engage consumers where they spend meaningful media time relevant to shoppable moments.

• Consumers’ demand for personalized ad messaging continues to grow, so it’s imperative that Retail & CPG marketers leverage data analytics to understand consumer preferences and deliver relevant experiences through targeted advertising.

• The increasing complexity of having multiple traditional and digital media channels in the media mix creates challenges for marketers—both in terms of optimization, and tailoring creative to impact the preferred target audience as effectively as possible.

• Given all these challenges, the vast majority of organizations are increasing investment with media platforms that can leverage first-party data and enable improved campaign reach through creative messaging formats in uncluttered environments—including podcast advertising and music streaming.

Key Finding #2:

Consumer demand for digital audio is growing, but a notable imbalance exists between share of ad investment and share of media consumption—highlighting a missed opportunity for Retail & CPG advertisers.

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• Among all consumers aged 16–64 in the U.S., UK, Spain, Italy, France and Germany, digital audio commands between 17.2% and 21.5% of media consumption.1 Conversely, advertisers spent less than 1.4% of their media investment on digital audio in 2022.2

• The gap is even bigger among 16–24 year-olds in the U.S., who spent 25% of their media time with digital audio—that’s 70 minutes more per day than with all forms of social media.3

• This imbalance will be exacerbated by the continued expansion of podcast listening across all age groups and demographics, especially in countries like France, Spain and Italy where YoY growth reached triple digits in 2022.4

• Even in more mature markets like the U.S. and the U.K., podcast downloads are increasing considerably year over year—tracking at 33% and 52%, respectively.5

Key Finding #3:

Studies have shown digital audio to be highly effective across the path-to-purchase.

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• Consumers see digital audio platforms as trusted companions who know them on a personalized level—and this results in a highly positive environment for advertisers. In fact, almost 60% of consumers think ads on Spotify feel “honest and trustworthy”, and the majority find themselves “wanting to like advertised brands.”

• Research by Neuro-Insight has found that digital audio platforms are effective across the funnel, often more so than other media. Average engagement levels are 14% higher than TV, 18% higher than social media, and 23% higher than terrestrial radio.

• Marketers are diversifying media spend to address audience fragmentation and build incremental reach with enhanced targeting. In fact, Nielsen data shows that including digital audio within a campaign can boost reach by over 40% without increasing advertising spend; and adding audio to a TV campaign increases ROI by an average of 20%.6


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To sum up:

These key findings scratch the surface of what was uncovered in Spotify and WARC’s collaborative study—the full report, which you can download below, dives much deeper into the potential of digital audio as a media investment, for marketers all over the world.

As noted by Justin Faiber, Spotify’s Global Category Development Officer for CPG and cohort on this study:

“This study shows that music and podcasts are vital mediums for marketers and brands looking to increase household penetration, relevance, data-driven outcomes, consideration, and ultimately, brand revenue. When you also consider digital audio’s global adoption and growth among diverse audiences, the opportunities that Spotify can deliver to brands and their audiences are tremendously exciting.”

Sources: 1-3. GWI/ WARC forecast 2023. 4-5. Megaphone First Party Data, October 2021–September 2022

  1. Global Web Index, Q3 2021-Q2 2022, UK, Germany, France, Italy, and Spain 18+ and The Mixer’ Research, Nielsen + Spotify 2021 The Mixer’ Research, Nielsen + Spotify 2021

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