Eyeing a major pie in the $1.7 billion audio ad industry, Google recently launched its audio ads to help advertisers reach consumers through streaming music and podcasts on YouTube. The company is also adding new targeting options to digital audio ads, which is touted as "cost -effective". With this move, Google will take on audio streaming players like Spotify, Gaana and TuneIn that have been selling programmatic audio ad inventory on Google platform only for a long time. Earlier, YouTube had launched its version of audio ads, part of the platform’s strategy to engage music and podcast listeners, in November 2020. However, specific product categories were ineligible to run audio ads.
Google's announcement has come at a time when the advertising industry across the globe has been struggling amid economic constraints, low demands and record-high inflation which have caused some brands to pull back on marketing budgets. The move also aims to give publishers better ways to monetize their content.
Audio and podcast advertising in India is not very prevalent today as Google has very recently opened this to all advertisers. They were earlier for some time doing industry-specific initiatives/ trials, says Nitin Sabharwal, Managing Partner, North, iProspect India.
Most brands want to advertise on Google’s platform (YouTube) only. Hence, it is expected that audio advertising will pick up soon, says Kumar Awanish, Chief Growth Officer, Cheil India.
Leading brands and categories
Some categories like smartphones, confectionery, dating apps, and video streaming platforms have started tapping the Gen Z and millennial consumer base (18 to 35 years) on audio streaming platforms like Spotify and Gaana.com serving smart, customized, programmatic ads, experts say.
Categories like BFSI, FMCG (Dabur, Mondelez, Reckitt, Nestle), Consumer Durables (Boat), OTT, dating apps (OKCupid), Alcobev (Royal Stag, Mcdowells) have all been a part of this mix. Many brands have also started adding audio to their 360-degree mix. PayTM, Britannia, and Gaana all used their mnemonics for recall, says Aditya Bathija, Director, Mammoth.
What experts say
According to Abbhishek Chadha, Senior VP (N & E) Interactive Avenues, India is the third largest podcast-listening market in the world, expected to be valued at around Rs. 18 crore by 2023 and growing at a CAGR of 34.5%.
“All categories of brands can take advantage of this genre – though no one size fits all. A vast number of podcast creators and influencers are now consistently creating compelling content to give brands the wide canvas needed to drive impactful messaging,” says Chadha.
“Brands can tap this huge opportunity to integrate and leverage immersive storytelling narratives. While the AdEx in this vertical is high, brands looking to strengthen their position as market leaders as well as brands looking to create compelling stories and covert fence sitters can use podcasts very effectively,” he adds.
Shradha Agarwal, Co-Founder & CEO - Grapes, too feels that podcast advertising has the ability to effectively drive brand/product recall value.
“Podcasts enjoy a mass appeal for their less attention span that enables the consumption of productive content without any extra screen time. The podcast industry is on the path of significant growth where it already has 40 start-ups operating in this space which caters to 200 Mn monthly active users (MAU),” says Agarwal.
“Looking at the acceptance of the medium, it is likely that in the near future, podcast advertising will effectively drive brand/product recall value. Since the platform’s consumer base is 20-40 yr-old, e-commerce, FinTech, Education, food delivery apps, etc are highly active on the forum. Brands dealing in education to entertainment, are also exploring podcast ads to better reach out to their target audience,” she explains.
Nitin Sabharwal shares that clients use digital audio ads or digital radio to build brand/product frequency that help them get better top of the mind recall with a specific audience that listens to digital music/podcasts.
“Youtube music gains another ad unit for advertisers to use for effective audio ads, which till now was being utilized by digital radio ecosystems. It is cost effective, but long-term efficiencies need to be the same for brands and there is no instant gratification unlike search, display, and video campaigns,” he explains.
“Audio ads work best as an in-between content consumption medium. 15-30 sec is becoming a default ad length but shorter format that leaves a question in the minds of its listener can also be effective for long term brand recall,” he says further.
Dimpy Yadav, General Manager, Xaxis India, says that digital audio platforms are offering a plethora of avenues for brands looking for new ways to reach consumers. “For any marketing strategy, the ultimate goal is to create awareness and keep brands at the top of their audience’s minds. Podcasts allow brands to initially roll out their information and create awareness using an audible method before making the brand visible,” he opines.
The most persuasive one amongst the reasons to include podcasts in marketing strategies is it requires less effort and is cost-effective, he mentions.
Kumar Awanish, meanwhile, thinks that digital audio’s potential is yet to be unlocked despite several advantages. “The audio ad inventory is available at half the rate compared to the video. Moreover, the platform has a far more engaging and young audience. About 60 percent of them are 18-24 year old and the rest are up to 40 years old. Studies have shown that music and podcast consumers spend about 2.5 hrs everyday listening to audio and podcasts as they want to disconnect themselves from visually overloaded content,” he reasons.
However, brands are still cautious about the platform because measurement of the audio ads’ reach is quite challenging. Brands which have adopted in-streaming audio ads are spending only 2-3 percent of their digital advertising budget on the platforms, explains Awanish.
According to Aditya Bathija, Director, Mammoth, players have the relevant data to back their inventory prices but advertisers need to bite into podcast advertising. Advertisers have been spending on the radio for decades, they need to understand that podcasts can offer a much more targeted audience base. You have a 90 million user base of podcast-consuming customers that are primarily Gen Zs and millennials.
However, ad innovations are a must. Ads that are smartly integrated within the podcast episodes or ads that are personalized to the consumer through storytelling are the need of the hour. You cannot treat podcasts like regular radio where a random ad spot is played. You will lose your customer to another player.
If you’re looking at a young concentrated audience then podcasts are one of the cost-effective alternatives, says Bathija.