Some feared a decline in audio consumption when the pandemic began, expecting the end of commutes to mean reduced listening hours.
However, throughout the past two years, Australians collectively reached for their earphones to listen to their favourite radio shows, music, or podcasts. Rather than listening to the radio in cars and offices, people tuned in while on their daily walks or when working from home, streaming from their laptops.
“We really are living in the glory days for audio,” says Peter Charlton, NOVA Entertainment CEO.
“Not since the advent of the Walkman in the early ’80s have we seen the same kind of exponential increase in personal audio consumption.
“We’re seeing considerable, ongoing growth in both audience size and time spent, which is a claim very few — if any — other mediums can make right now. People are genuinely making more time in their day for audio, which we know is a privileged position to be in as a publisher.”
At SCA, the company plans an investment of $35 million in digital audio for 2022, including content for the LiSTNR app.
Morningstar equities director Brian Han on SCA: "Benefits of this concerted effort in the digital audio space are already coming through, with 500,000 sign-ups already over the past year and over $20 million in revenue on track to be generated in fiscal 2022, up from $15 million."
Grant Blackley, CEO at SCA: "The strong brand recognition and expanding premium library of content are generating a higher number and increasing weight of advertising briefs from marketers looking to connect with addressable audiences at scale."
The company reported audio revenue up 11.5% to $193.8 million in the six months to December. And the pace continues with January audio revenue up 3% and February and March indicating higher growth than prior months as business conditions improve.
Blackley: “The great news is that the digital audio market is expanding, not only here, but overseas. In the US they're at an inflection point where they're going to double the revenue, in their opinion, from $1 billion to $2 billion. So the market’s becoming meaningful and therefore a very clear investment model for marketers and agencies.
“And the gravitas of consumption is actually now driving more and more inquiry and larger briefs out of the advertising community."
Data from the annual Infinite Dial Australia 2021 study, released by Edison Research and Commercial Radio Australia (CRA) in April 2021, showed that digital audio continued to grow this year, with Australians listening to more podcasts.
The study found that 86% of Australians aged 12 years and above listened to radio over-the-air, online and via catch-up radio podcasts over a one-month period and 37% had listened to a podcast in the past month.
Smart speaker ownership also increased sharply, with 26% of the population owning a smart speaker, up 17% the year prior. The study also found that the number of Australians 12 years and above who listen to online audio weekly including radio, internet-only services and podcasts, increased to 66% of the population from 63% a year ago. The average time spent listening to online audio was more than 12 hours per week.
Lauren Joyce, chief strategy and connections officer at ARN, says the network saw the rate of migration from traditional to digital formats increase from 10% to 20% during 2020 due to COVID-19.
“Post-COVID-19 — if that’s a thing — has regulated at around 15%,” says Joyce.
“I think we’ll see these levels of migration maintained, but for those who have already migrated, we will see an increase in the volume of content they consume as they become more familiar with using their streaming platform of choice and as publishers become better at guiding their audiences around their offering.
“For advertisers, this presents a greater volume of inventory to play around in, ultimately presenting an opportunity to better tailor their communications environmentally and to start thinking about tactical media buying strategies such as sequential creative messaging.”
Other radio networks across Australia saw similar trends from listeners, with Nova Entertainment CEO Peter Charlton saying the pandemic demonstrated the loyalty of radio audiences.
“Despite everything, they’ve come out of 2021 largely unscathed,” Charlton says.
“We obviously saw a shift in how and when they listened in line with their new routine, with desktop and smart speaker consumption growing considerably, and workday picking up reflecting the changing pattern of lockdown life.
“But that daily habit of consuming and connecting with their favourite shows never wavered, they just looked for new ways to do it. And now that life is returning to normal, so too are our pre-COVID-19 numbers and occasions for listening.
“So, if nothing else, 2021 has proven to me that when it comes to radio, old habits die hard. In fact, it’s our broadcast audience’s desire to stay connected to the format they love that’s ultimately helped accelerate their digital audio uptake.”
Advertisers are starting to follow audiences to new platforms with a shift in where and how they are allocating advertising dollars. According to IAB’s ‘Audio Advertising State of the Nation: Wave 5’ report, audio is taking up more advertising dollars.
The report surveyed more than 200 decision-makers or influencers in the allocation of marketing spend and had either placed or planned audio advertising campaign. It found that audio is playing a more consistent role in media plans than it did five years ago, with 69% of media agencies found to have streaming digital audio advertising as a significant or regular part of their activity and 36% had podcast advertising as a significant or regular part of their activity — up from 33% last year.
Additionally, 62% of media agencies have used ads within streaming services this year, up from 51% last year, while 63% have used ads within live radio streams, up from 48% last year.
However, Charlton says this growth in digital won’t necessarily come at the expense of the broadcast audience.
“Rather than it being a case of ‘either/or’, we know people are genuinely making more time in their day for audio,” he says.
“So, if we’re all listening to more content than ever before and our expectation of accessibility isn’t going anywhere, the only real limit to digital audio’s potential is how quickly advertisers can respond to it.”
ARN’s Lauren Joyce argues that despite the rise of new technologies giving users significantly more content options, radio will continue to have a place.
“If the changes to our lifestyles and media consumption habits across the past two years have taught us anything, it’s that at the end of the day, we all crave live and local content,” Joyce says.
“We want to feel connected to our community, and we rely on humans who we can relate to deliver that connection. The global streaming platforms have some incredible product developments that try to emulate the radio experience.
“The reality is, radio is inherently social and the level of audience involvement, and thus the connection to the community that can be created via the medium, is something that the large streaming platforms would find difficult to emulate without shifting their entire business model.”
Charlton says Nova Entertainment anticipates digital audio revenue to grow by at least 50% a year during the next four years, alongside broadcast radio revenue recovery to pre-COVID-19 levels.
“It’s rare enough to be a medium in growth right now, then add the fact that — respectfully, unlike many of the new screens-based apps we’re all addicted to— our digital channels can actually accommodate the depth of creative brand integration needed to make an impact.”
Despite the shift in ad dollars, Charlton argues advertisers should be adopting new mediums at a faster rate.
“For some reason, when it comes to audio, revenue does seem to be slower to follow audiences than some other channels,” he says.
“We know more than 25% of media consumption is done with audio, and yet it accounts for less than 10% of all advertising revenue.
“While many brands have recognised and capitalised on this, audio still represents a wealth of untapped opportunity. Clients need to stop chasing the declining ratings on many other traditional media channels and make some audio creative instead. The audience is waiting.”
The technological changes across audio means the sector has had to rebrand itself to reflect the different platforms it now covers, such as smartphones, smart speakers and laptops. Anthony Ellis, managing director of Publicis Media Exchange in Australia, says this rebrand really came to the fore in 2021 through the emergence of “converged audio”.
“The biggest trend for me was the converged audio narrative in the radio industry and all the sales houses,” Ellis says.
“Prior to 2021, in my view, they had been looking at radio in its own silos and really being about broadcast. But there’s been a really concerted effort in terms of how they joined those up and selling a converged story.
“Typically, they’ve been coming and selling podcasting separately, broadcast, and then digital audio and those sorts of things as well.
“When I talk about converged audio, it’s about anything that is audio. Anything that is audio should be considered as part of the strategy, depending on what you’re trying to achieve. Just because it’s on a device like a radio, doesn’t mean that’s the only thing you should be looking at.”
The ‘2021 State of the Nation’ report, released by IAB, found evidence of media agencies adapting to a converged audio mindset, with 79% of media agencies planning across all audio activities within the same team. The report also found that 51% are both planning and buying all audio activities within the same team, which is up from 41% the year prior.
Brooke Aniseko, commercial director of performance at Publicis Media Exchange, says the industry has been working to reduce inconsistencies in sales approaches.
“The working groups that are in place are really strong and we are really seeing a lot of benefit from the CRA in how they’re approaching their go to market with those vendors,” Aniseko says.
“The IAB is also really assisting in how buyers should be approaching this converged audio channel without some of the key pieces which are missing at this stage around measurement. However, the framework is there for everyone to be able to achieve that and work through it together. So there’s definitely been some improvements in the past six to 12 months in how we approach that collectively.”
The emergence of converged audio means new challenges for the industry. This includes presenting advertisers with cross-audio platform measurement.
“Audio’s challenge isn’t in finding an audience, it’s helping our customers capitalise on the sizeable one we’ve already got,” says Peter Charlton.
“To do that, we need to get cross-audio platform measurement right as an industry. The onus is on us to eliminate any complexity or ambiguity when it comes to proving the performance of audio.
“That includes providing greater insight into the role that different audio platforms play in a consumer’s life, working with agencies to ensure their existing planning models and tools accurately reflect the scale of opportunity available, and making the purchase of digital audio automated, uniform and easy.”
CRA made significant steps last year to improve audio measurement. In September, the industry body revealed that GfK’s radio ratings system would move away from relying solely on paper diaries and adopt a hybrid methodology. The new Radio360 system will use data from an electronic watch meter and use ediaries. Livestreaming data will also be integrated into the new system, which will begin to roll out in stages, to provide further details on the size and profile of audiences listening across digital platforms.
In the podcasting space, CRA also made changes to the Australian Podcast Ranker, which is verified and reported by Triton Digital, to include listener and download figures for the first time. Previously, the ranker only provided a ranking of the shows according to total downloads.
Craig Cooper, chief investment officer at Carat, says the updates to the Podcast Ranker are crucial to the future growth of the medium.
“Podcasting has certainly been a hot topic this year, and with the ratings boost during the past 18 months there’s very good reason,” Cooper says.
“It was especially fantastic to see the CRA release the actual podcast ranker audience numbers; a great first step in becoming more transparent also shows the confidence in the depth of the platform.
“Transparency and audience verification, within any channel, is an important factor for both agencies and clients and it is paramount that the audio industry strive for gold standard delivery here.”
However, ARN’s Lauren Joyce expects measurement to continue to be a big topic across the audio industry this year.
“As advertisers invest more in digital formats but seek to maintain the returns they yield from radio, they will demand ‘rolled up’ reporting, consistent trading language, and standardised metrics,” Joyce says.
“The unregulated nature of the digital audio industry and fundamentally different trading approaches across radio, and digital formats makes satisfying these demands quite difficult.”
Cooper says digital platforms in audio remain an area of growth, with better data playing a key role in unlocking that growth.
“Audience data in the digital audio space is the biggest barrier for growth and it has been difficult to obtain this universally, that is independently verified,” Cooper says.
“This is something that we would encourage the CRA and broadcasters to continue to work collectively on so that digital audio can be a ‘must have’ on media plans and is future proofed.”
Another challenge for the audio sector is getting the creative right. According to the IAB’s ‘2021 State of the Nation’, a third of media agencies aren’t tailoring creative to suit different audio environments when running campaigns across different broadcast and digital audio advertising options. This statistic hasn’t improved since the year prior despite ongoing discussions about the need for bespoke creative across the audio sector.
“There’s certainly an opportunity to improve creative by approaching each channel within total audio quite separately and specifically,” says Aniseko.
“For example, you don’t want to be putting a radio jingle within a podcast, you want to be trying to create creative that’s a lot more specific to that environment to really see the benefit of using each of those channels.
“You really do have an opportunity in audio, even more than how you would approach other channel planning around creative, because of how listeners and consumers are engaged with content in different ways. Whether you have radio, which you would expect as broadcast whether you are listening in your car or at home. and then podcast, which is in most instances having headphones directly in your ear. So it’s much more of that one-to-one and there’s certainly an opportunity to be very strategic with your creative to be able to tailor those for specific listening and contextual environments.”
Industry experts argue that improving creative by tailoring to each medium wouldn’t require too much investment from brands.
“In terms of prioritisation, when it comes to brands and engaging their creative agencies then it’d be fair to say that time spent, and this would be a generalisation, I would imagine would be limited,” Anthony Ellis says.
“So, then breaking that down, when you go, ‘Well, if we’re in audio then what do we do in podcasting?’ and that’s part of the challenge, but that’s part of the power of advertising in podcasting. So, unless you’re going to do it well and focus on it, from a creative asset point of view, then I would caution applying your one-size-fits-all approach into audio.”
Corey Layton, head of digital audio at ARN, says not understanding the best way to use creative is holding back the sector’s ability to monetise podcasts.
“Some advertisers continue to place their shouty ads in podcasts in a race to the CPM bottom,” Layton says.
“Others understand the value a podcasts talent voiced, solus environment brings. While publishers are constantly educating advertisers, they too are leading the medium’s evolution with new methods of brand integration continually being tried and tested.”
Lauren Joyce adds that brands still aren’t adopting sonic branding at the rate they should be given the prevalence of audio.
“We’ve been talking about the importance of audio branding for quite some time but the practice of ensuring that sonic logos and audio identities as part of a brand’s overall strategy is still not commonplace,” Joyce says.
“As brands continue to increase investment in audio and seek to squeeze even more from their budgets, it would be prudent to ensure this component of a brand strategy isn’t overlooked. It plays a role across audio formats certainly but can also make audiovisual formats a lot more effective, especially when channels are combined across a campaign.”
Bart Pawlak, executive creative director at 303MullenLowe, also agrees that creative for audio platforms can be improved across the industry.
“I’d say audio-only creative has suffered somewhat from the automatisation of the media landscape and the many alluring options that now subdivide a brand’s attention and marketing budget,” Pawlak says.
“It could be a case of idealising the past, but it seems to me that we used to sweat the ideas and the scripts a lot more when radio, as an example, was one of only a few communication options. And brands were more willing to invest in bringing it to life in a genuinely engaging way.”
Pawlak argues that brands should be investing more than just ad dollars in their audio creative campaigns.
“Time, money, thought, courage. When it comes to creative for audio, I feel that too often brands are under-investing across all these parameters, these days,” he says.
“Audio-only is approached as an afterthought. A chance to create some ‘matching luggage’, by simply copying and pasting the VO from the TV, and then cluttering it up a little further with those proof-points and additional brand mentions that wouldn’t fit anywhere else. It’s a purely functional approach that often squanders the opportunity to engage consumers’ imaginations, like with no other medium and connect on an emotional level, which we know is far more potent than a purely rational one ever will be.
“Sonic branding? A genuinely immersive utilisation of podcasts? Theatre of the mind? These are things that, sadly, fall by the wayside when what remains of a brand’s appetite and budget must also extend to myriad of banners, when the mandatories are crowding any storytelling off the stage, and when the script was due yesterday.”
Pawlak says the biggest mistake he sees in audio creative is one often found across other channels — creating for an internal audience, rather than the intended audience as indicated on the brief.
“The consequence is a piece of communication that is so replete with ticked boxes that it leaves very little real-estate for the elements that ensure consumers look, engage, fondly remember, and start developing an affinity for the brand through,” he says.
“Creative people are ingenious by nature. But there’s a limit to what you can concoct in the scant seconds left, after every rational consideration has been addressed. The other fatal consequence of course is a sense among consumers that you’re bluntly hitting them over the head with your message. Overly spelling it out, rather than treating them like the savvy, perceptive, quick-witted, intelligent individual that they know they are. The classic Leo Burnett quote is as relevant as ever — ‘Too many ads that try not to go over the reader’s head end up beneath his notice.’”
Podcasts have taken up a big spotlight in the audio world, with their growth only accelerating since the start of the pandemic.
Acast has experiences this growth in podcast consumption, with its own team growing by 14 members throughout last year. The company’s Australia and New Zealand managing director Henrik Isaksson says demand hasn’t slowed down since the heights of lockdowns.
“We are seeing more listeners on the platform quarter-on-quarter from last quarter,” Isaksson says.
“So it’s not stopping at all. We tend to say that it is pandemic-proof to use that turn of phrase. I think people’s habits are magnetic. They know what they want to listen to and they come back day in and day out. So we are not seeing any drop at all, it has been growing like crazy.”
Isaksson says the business has also noticed the demographic of listeners expanding as more people are attracted to podcasts.
“Only 18 months ago the podcast audience was skewed slightly older, so the core demographic was somewhere between 30 and 35 years old,” he says.
“So it was skewed slightly older than say TikTok or Snapchat. What we are seeing now is a huge influx of listeners in the 18-24 year-old bracket. I think that’s because there is just more content being made that caters for a younger audience.”
According to the ‘2021 Infinite Dial Australia’ report, about 5.6 million Australians, or 26%, are weekly podcast listeners, a 53% increase over the 2020 study that was conducted prior to the pandemic lockdown.
“2021 has been a golden year for podcasting,” says Kane Reiken, NOVA Entertainment digital commercial director.
“We saw audiences spending increasing time with our shows across all devices and speakers and advertisers have continued to have confidence in the medium with consistent spends throughout the year.
“We are expecting another explosive year in odcasting in 2022 with the market doubling again in total revenue.”
Despite the widespread appeal of podcasts, Reiken says the industry has only “scratched the surface” of possibilities in monetising podcasts. Last year, the big players pushed ahead with experiments to monetise podcasts. For example, Spotify rolled out subscriptions for podcasts in Australia.
“There will be lots of ongoing experimentation in the space with opportunities for creators to extract further value from their audiences,” Reiken says.
“This will include the introduction of subscription services, paywall and exclusive content as well as the extension of communities to Telegram and Substack. In addition, new platforms will allow content creators to be paid in Bitcoin, receiving one Satoshi (SAT) for every second streamed.
“We will continue to support content creators by connecting them with brands and providing revenue opportunities which enable them to continue to produce high quality audio content for their audiences.”
Part of the appeal of podcasting has been the diversity it can offer to listeners, something that radio, as a mass media, hasn’t always achieved.
“A key audio trend I noticed this year was the acceleration of female voices, particularly in podcasting,” ARN’s Joyce says.
“If you look at the recent Australian podcast awards, many of the recognised talent, both behind and in front of the mics, were female. This stood out for me because radio (as the dominant audio channel) has traditionally been the domain of alpha male characters.
“Even the queen of radio, Jackie O, with 22 years of radio experience, much of it as part of the #1 breakfast show, received an ACRA ‘Best on Air Talent’ for the first time this year. It’s surprising only because it’s unusual that the spotlight seems to be on women right now, even though they’ve long held a place in the industry.”
Henrik Isaksson echoes this, saying the ability for podcasts to give all people a platform is what drives much of its appeal and will continue to do so in the new year. This is particularly so in social media, which has been increasingly fighting for consumers of audio over the past two years.
During the 2020 lockdowns, Clubhouse popularised audio-only social media as the platform skyrocketed with high-profile users including Drake and Oprah Winfrey joining the app.
Since Clubhouse’s growth, other social media players began rolling out audio-only features on their apps, including Twitter, Facebook Rooms, Reddit and even Spotify.
“Audio social emerged at a period of historic and unprecedented restrictions — lockdowns, curfews, and closures — but also at a time of highly unusual access where we were expected to be on endless video calls for both work and leisure,” says Bethanie Blanchard, Carat Melbourne head of strategy.
“We still craved that connection with others, but had become tired of screens. Audio social allowed the intimacy of a Zoom call with friends, without worrying what you looked like, how tidy your house might be, or what your partner or roommates might be doing.”
Blanchard says while visual-based social media will always be dominant, the rise of platforms such as TikTok and Instragram Reels demonstrate the populatiry, and centrality, of audio to social.
“When it comes to new platforms, it is always useful to think in terms of ‘and’ rather than ‘or’,” she says.
“Audio elements are an important addition to social in a way they haven’t been previously.
“The smartest marketers capitalise on any new platform or trend through a deep understanding of people, why those people are using that platform, and how their brand can add something of value within it, rather than being the disruption of it.
“Knowing what your brand sounds like is going to be increasingly important whether you are using audio-only platforms or not. Many brands I work with are currently working through their audio identity and this includes everything from sonic branding — a melody or jingle — through to a particular style of voice. Building these distinctive assets is as vital as any fonts, colours or logo designs in 2022.”
Kandiese Villella, Reprise Digital national head of social media, also sees screen fatigue as a reason for the rise of audio. She says audio platforms give all audiences an equal voice without being judged by their social profile, while also providing more diverse and inclusive conversations.
“The world of visual based social media has always been scripted before publishing, while the move towards ephemeral content has mildly alleviated this pressure, perfectionism remains at the core of visual based social media,” Villella says.
“However, there is acceptance that audio-only is live, raw, uncensored; it can be ephemeral and private or published more broadly and the purpose is to have a rich discussion on a topic.”
Villella thinks that while audio offerings will be a strong complement to existing visual-based social media apps, they won’t reach the same popularity as visual-based social media in the short-term in Australia.
Villella expects to see significant shake-ups in the audio industry throughout 2022.
“If the past is any indicator, tech giants aren’t shy in acquiring smaller, successful players — Twitter buying Vine and Facebook buying Instagram,” she says.
“The market shake-out will occur in 2022, likely starting with Clubhouse, narrowing the list of audio-only social media players to META, Twitter Spaces and Spotify Greenroom. These big players will captivate their pre-existing audience by creating audio-only features in app, leaving any smaller players’ rise to fame behind.
“A critical element to success, that is already being considered, will be a seamless process for monetisation and payment of creators, like that of Twitter Spaces — which allows users with more than 1000 followers to charge for admission into a live conversation. There is even a possibility for a crypto or NFT creator economy.
“Audio-only cannot stand alone, having strong partnerships between the big players like Facebook and Spotify to make sharing and publishing of content easier for musicians, and listeners will need to be at the core.”
Villella also expects to see greater investment in audio-only social media products by key social media platforms.
“Ascertaining when to jump onboard with the adoption of an audio-only social media strategy depends on the brand’s willingness to be an early adopter or within the early majority,” she says.
“There are several considerations before capitalising on the opportunity: Does your brand wish to invest time and energy into an ongoing audio-only content strategy? Is there high sensitivity towards brand-related controversies and stringent brand safety requirements? Are topics within your industry or about your brand of interest to consumers currently across the audio-only suite? Do you have thought leaders or influencer partnerships that could host engaging audio discussion? Will stakeholders be accepting of new performance metrics and a potentially smaller user base in the short-term?”
303MullenLowe’s Bart Pawlak says to capitalise on the proliferation of audio content, brands need to acknowledge the power of audio storytelling and brief, allocate budget, and take risks accordingly.
“It’s astounding that, with the proliferation of ways audio-only can now weave its way into people’s lives, beyond just the standard radio ads, that we’re not exploiting it in ways that will make consumers feel more love for brands, as well as understand and like what they’re selling,” he says.
“There are very occasional, delightful exceptions, of course. But generally it feels like we’re often forgetting to adequately entertain as we attempt to enlighten.
“I’m excited about the way our media consumption habits are continuing to evolve and change, and the opportunity this creates for brands to genuinely engage their audiences through audio, more often. Hopefully, in ways that are as rewarding and entertaining as they are informative.
“The fact is, whether it’s music, podcasts, audio books or news broadcasts, we are listening more than we’ve ever done in the past. The brands that successfully harness these frequent moments of aural connection will be those that infiltrate them in the least intrusive and most complementary ways. In that sense, the future sounds a lot like the past.”
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