India is expected to have more than 8 million paid audio subscribers by 2025. This will be a double from last year’s count when it was around 4-5 million for the country. According to stats from an EY FICCI report, in 2022 the total number of audio streaming consumers in India had crossed 200 million.

In India, the audio streaming sector has the potential to grow faster, asserted Ashwin Padmanabhan – President – Investments, Trading and Partnerships, GroupM India, along with Parthasarathy Mandayam – Chief Strategy Officer, GroupM South Asia.

While the content on audio streaming platforms is created in numerous languages and can possibly be personalised, advertisers have an outstanding chance to reach this audience, they said while in a conversation with exchange4media.

They also spoke about the advertisers’ interest in the medium, the challenges and much more.

Excerpts:

How has the growth of audio streaming platforms been in India?

Ashwin Padmanabhan (AP): The total spending on audio streaming this year in India has been around $48 million, which is still small compared to other mediums, but it's growing at almost 15 per cent every year. We sense that it has the potential to grow even faster. This is the current growth but we believe that it can accelerate significantly and that's coming from this belief and understanding that we already have about 100 million-plus Indians streaming audio and that's again growing exponentially.

Also, it's growing because the content that is being created is beyond music and in multiple languages. Audio streaming is enabling more audiences to have a personalised experience while consuming content.

In another interesting data point, most people in India consume audio while they have headphones, which also means that you have their complete attention. It is great from an advertising perspective. We believe that the potential for advertising on audio streaming is high because it has a decent base right now, the growth is at a good pace, there is a phenomenally large number of listeners whose numbers are growing exponentially, and it is a very personal medium.

Parthasarathy Mandayam (MAPS): When we deep dive into our data and a lot of other sources, some findings are obviously what we would expect, like Gen Z is more into streaming audio but it has been found that women as a cohort are growing much faster than men as consumers of this medium. Small towns are also showing rapid growth in these numbers.

Along with music, content like podcasts is both educational and inspirational. The other thing is audio streaming typically happens at a time when the audience is not screen fixed, so it enables you to get to people at a time when they are not on a screen. These are times when other media typically does not reach them and therefore it complements other media very well.

We also found that this medium gives you a lot of data allowing one to segment audiences well. You have access to first-party data, and a lot of meaningful cohorts, and you're also able to customise and personalise at a level that is strong because mood plays an important role even in decision-making for different categories.

What markets contribute to this growth?

MAPS: The growth of markets is dependent largely on the growth of localised content, whether language or sub-languages. There's growth across segments and cohorts because the more people listen, the more content gets created, and vice versa. It's like a virtuous cycle. So that's why we're finding growth across markets, but it's very distinct tastes and distinct expectations, and that's where the opportunity goes up.

Is the number of paid subscribers growing at the right pace?

AP: According to the EY analysis, there are $5 million paid members and paid subscriber bases and like in any other content consumption area this sector is always growing. I believe EY predicts the $5 million paid subscribers to increase to around eight in the next two to three years. So it will always be a small percentage, which is excellent for marketers because there are so many more people available to reach through advertising. This you wouldn't have been able to reach if they were all behind the paywall.

The fact that our consumers are cost-conscious is excellent news for advertising since it allows them to engage more effectively. MAPS made a significant point on the seamless connection with audiences, in my opinion. Platforms can wonderfully capture the context of what you're listening to, where you are, and what you're doing while listening to the content, and can utilize the data segments to serve the relevant kinds of creatives.That, in my opinion, is a huge possibility in terms of making advertising work better. We struggle in a lot of mass reach mediums to personalise it so much. I think with audio advertising, you have the mass reach with the benefits of personalization, which is unique.

Podcasting is becoming increasingly popular in India, but how effectively is it monetizing? What are the challenges?

AP: The monetization challenge is not because of the lack of audiences. It is because we've not invested enough so far. I'm hoping that we will change it now. We have not invested for deciphering these audiences and making advertisers understand who these audiences are, where are they from, what do they do, how can I connect with them better, and for an understanding of the platform. Our goal at GroupM and WPP is to break down these barriers because it's unfortunate that we have this unique audiences that we're not using to connect our marketers. I don't see that as a challenge, I see more about the work that we do, which will actually define how many more audiences are coming and how many more advertisers will get defined for the work that we do.

MAPS: The traditional ad formats and the ad messaging may not necessarily work in this context. You need to really focus your content and messaging in a way that is more seamless and integrated, like native. There are certain forms of work in podcasts because it may only appeal to a specific niche, but that niche is so invested in that content that you have the ability to lean forward. As a result, there is a lot of potential.

Which sectors are investing in audio streaming platforms, and what opportunities do advertising have in this medium?

MAPS: A lot of youth-oriented or youth-focused categories tend to do a lot more on audio streaming platforms, but it's not necessarily restricted to that audience. Now, there's opportunities across cohorts.

AP: There is a certain type of advertiser who patronises terrestrial radio, and it's usually motivated by the fact that a terrestrial radio station is very local. So, you have a lot of retail and real estate companies. These types of advertisers use traditional radio a lot more, and a lot of SMEs, who are focused on specific geographies and use Print and Radio, are also shifting to digital.

The way I see digital audio advertising evolving - it is a mix of what advertisers currently do with traditional radio as well as how large brands start looking at connecting with cohorts of audiences. Because what terrestrial radio doesn't allow us to do today is to target and create cohorts, and then measure what's the response. Digital Audio allows you to do that. So I see both national and local brands, regardless of the category, looking at the context, and getting to understand how to use it. That's where we will move.