Where Are The Local Digital Audio Ads Coming From? New Survey Points To Ad Agencies.
Four times as many local-focused advertising agencies purchased streaming and podcast audio advertisements for their clients as did the actual medium and small-sized companies that are found on Main Street, USA. A new study by Borrell Associates finds that 43% of local agencies purchased podcast and streaming audio advertising this year, as opposed to 10 per cent of local businesses who purchased the services directly. The study states that local companies spent, on average, $15,834 in advertising on streaming audio this year. The figure is expected to increase over the next few years since eight percent of respondents stated they would like to spend more money on marketing using digital audio channels by 2024.
In the same measure, 31% of local businesses that Borrell surveyed stated that they purchased radios using traditional technology in 2023, with an average cost of $35,407. But this was far less than what the agencies were doing since 61% of respondents said they had purchased AM/FM radio for local customers.
Borrell Associates President Gordon Borrell states that it is disappointing for some to find that the streaming audio and podcast numbers aren’t as high, considering how fast the business of podcasts overall is expanding. “Most of that is, almost all of it, is national,” Borrell stated. “But a bit more excitement and deeming it effective on the agency side.” This, Borrell said on a webinar describing the findings of the survey last week, is what sales reps are better at focusing their attention on in the near term.
In the end, an average of a quarter (23 percent) of buyers in the local market believed that the audio ads on streaming are “very” or “extremely” efficient. This is pretty close to radio’s 34%.
The good news for both streaming and podcasting is that four of 10 (42 per cent) local advertising agencies anticipate their clients to be more engaged in digital audio marketing in 2024. Only four per cent of them believe their clients to be less enthused. Borrell states that the only things advertising agencies believe their customers will be interested in aside from streaming audio streaming video, social media, and SEO marketing. In addition, 37% of survey respondents are planning to “try something new” next year.
Podcasters have been examining artificial intelligence for localized ads that use the same voice of hosts but without sitting for hours in front of an audio device. Borrell’s study shows that some local advertisers are already open to the concept. It states that 14% are already making use of AI, while 29% say they’re contemplating the possibility of using it.
Outside of digital music, the story is positive overall from local advertisers as we head into 2024. looks good. Nine out of ten local marketers intend to maintain budgets (69 percent) or even increase their budgets (21 percent). Only 10% are planning to reduce their spending in the coming year.
Of the 10 percent of respondents who spent less on advertising this year, the most common reason for pulling back was that they moved money elsewhere (42 percent) and used less costly marketing strategies (33 percent). Their business was not performing well, or budgets were cut (30 percent), or no evidence to justify the spending (19 percent).
“Many businesses were still flailing when it comes to marketing,” said Borrell Executive Vice President Corey Elliott. “They didn’t increase budgets simply because they were seeing results. They’re increasing them because things did not work. They’re experimenting with new ideas.”
Surveyed Sept.-Nov. 2023 The survey was circulated through prospect/client lists of media firms with more than 2,070 local buyers as well as agencies that took part.
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