The audio advertising market is valued at US$31.811 billion in 2020.
Audio advertising is the presentation of advertisements in the form of audio records via internet streaming platforms such as podcasts, music streaming applications, and radio channels. In accordance with the rising popularity of audio, advertising through this medium is also gaining popularity, thanks to technological developments and customer demand. Audio streaming services also saw an increase in users, owing to the COVID-19 pandemic.
Podcasts have also had a significant impact on the audio advertising market, as audiences have started adopting podcasts as their means of media consumption. However, the rise in the adoption of adblockers may prove to be a setback for the audio advertising market and may decrease the overall market demand.
The recent outbreak of the COVID-19 pandemic had a positive impact on the global audio advertising market. With the restrictions and work-from-home norms set up by various governments, the audio streaming market saw a massive increase in users. With an increase in the number of audio users, streaming services increased by 24% year on year in 2021, compared to a 19% increase from 2019 to 2020 and a 22% increase from 2018 to 2019, according to an International Music Summit (IMS) report.
The IMS also noted that the recording music business had crossed the $26 billion mark across all genres, an 18% increase over the previous year. This surge in the number of streaming audiences increased demand for the advertising market.
Advancements in audio advertising
Audio is becoming increasingly appealing for brand advertising since it can be presented in an open environment. Earlier this year, Spotify added clickable cards to its digital audio advertisements, allowing users to act after hearing advertising material. More than 1 million new podcasts were added to Spotify in 2021, accounting for roughly a third of the total podcast inventory (3.2M podcasts). As consumption increases, Spotify aims to make it easier for audiences to understand and interact with advertisements and for marketers to extend their reach.
iHeart announced its plan to launch a new digital ad network earlier this year. The iHeart Audience Network (iAN) will gather advertising content across streaming and podcasting from the iHeartRadio database and other premium publishers. With the debut of the new ad network, iHeart claims that advertisers will achieve scale in their digital audio buys, as well as target addressable audiences across numerous channels, devices, and behaviours to pinpoint the proper audience.
Podcasts gaining popularity
With an increase in the adoption of podcasts as a source of audio consumption, audio companies have reported a considerable influx of users in the genre. Companies have also reported significant revenue generation from audio advertising through podcasts. According to a report by IAB, podcast ad revenue increased by 19% year-on-year in 2020. Despite the pandemic, revenues from podcast advertising increased to $842 million in 2020 from $708 million in 2019.
Spotify's focus on podcasting helped it beat expectations in terms of advertising revenue, which increased 29% year on year to €281 million, as advertiser demand continued to rebound after dropping at the start of the pandemic. Ad income from its podcasts increased by more than 100% year on year, with a 50% rise in the number of sponsors compared to the third quarter.
Advertising now accounts for a sizable portion of total revenue, accounting for 13% in the fourth quarter. Spotify also announced its multi-year partnership with Harry and Megan, The Duke and Duchess of Sussex, to produce and present podcasts that showcase and promote various viewpoints and voices and inspire audiences through storytelling.
With this partnership, Spotify seeks to strengthen the community via shared experiences, perspectives, and beliefs. With such an increase in the popularity of podcasts, it serves as a ready market for audio advertisements and is expected to drive up the demand significantly.
Rise in the prevalence of ad blockers
Ad-blockers have seen a significant increase in demand among users. Ad blockers protect users from malvertising, maintain privacy and provide a better ad-free experience for users. Moreover, they are usually free to use. According to Blockthrough, by the end of 2020, there were 257 million PC adblockers and 586 million mobile adblockers.
However, the AdBlock rates observed by the most prevalent AdBlock detection approaches only account for around 60% to 80% of total Adblock usage. With 40.6% of consumers using adblockers, Asia leads the AdBlock market, followed by Europe (29.6%), the Americas (19.2%), Africa (9.2%), and Oceania (1.2%).
Ad-blockers like the Brave browser, EZBlocker, etc., filter out ads from audio streaming platforms without requiring premium audio subscriptions from streaming companies. Such an increase in the adoption of adblockers may prove to be unfavourable for audio advertising agencies and companies.
|Market size value in 2020||US$31.811 billion|
|Growth Rate||CAGR of during the forecast period|
|Forecast Unit (Value)||USD Billion|
|Segments Covered||Medium, Device, And Geography|
|Regions covered||North America, South America, Europe, Middle East and Africa, Asia Pacific|
|Companies covered||Spotify AB, Saavn Media Pvt Ltd., Pandora Media, LLC, Airtel Digital Limited, Cumulus Media, iHeartMedia Inc., SBS, Townsquare HQ, Music Broadcast Limited, ENIL, BAUER CONSUMER MEDIA LTD|
|Customization scope||Free report customization with purchase|
Frequently Asked Questions (FAQs)
Q1. What is the base year considered in the audio advertising market report?
A1. 2020 has been taken as the base year in the audio advertising market.
Q2. What factors are anticipated to drive the audio advertising market growth?
A2. The primary growth factor that drives the global audio advertising market worldwide is the growing adoption of online streaming music services across the globe on account of the variety of content available on those platforms.
Q3. What is the size of the global audio advertising market?
A3. Audio Advertising Market was valued at US$31.811 billion in 2020.
Q4. How is the audio advertising market segmented?
A4. The audio advertising market has been segmented by medium, device, and geography.
Q5. Who are the major players in the audio advertising market?
A5. Prominent key market players in the global audio advertising market include Spotify AB, Amazon Music, Deezer, Pandora Media, LLC, Cumulus, and Media iHeartMedia Inc., among others.
1.1. Market Definition
1.2. Market Segmentation
2. Research Methodology
2.1. Research Data
3. Executive Summary
3.1. Research Highlights
4. Market Dynamics
4.1. Market Drivers
4.2. Market Restraints
4.3. Porter’s Five Forces Analysis
4.3.1. Bargaining Power of Suppliers
4.3.2. Bargaining Power of Buyers
4.3.3. Threat of New Entrants
4.3.4. Threat of Substitutes
4.3.5. Competitive Rivalry in the Industry
4.4. Industry Value Chain Analysis
5. Audio Advertising Market Analysis, By Medium
6. Audio Advertising Market Analysis, By Device
6.2. Smartphones and Tablets
6.3. Smart TV
7. Audio Advertising Market Analysis, by Geography
7.2. North America
7.3. South America
7.5. Middle East and Africa
7.5.1. Saudi Arabia
7.6. Asia Pacific
7.6.4. South Korea
8. Competitive Environment and Analysis
8.1. Major Players and Strategy Analysis
8.2. Emerging Players and Market Lucrativeness
8.3. Mergers, Acquisitions, Agreements, and Collaborations
8.4. Vendor Competitiveness Matrix
9. Company Profiles
9.1. Spotify AB
9.2. Saavn Media Pvt Ltd.
9.3. Pandora Media, LLC
9.4. Airtel Digital Limited
9.5. Cumulus Media
9.6. iHeartMedia Inc.
9.7. Entercom Communications Corp.
9.9. Townsquare HQ
9.10. Music Broadcast Limited
9.12. BAUER CONSUMER MEDIA LTD
9.13. Digital Radio (Delhi) Broadcasting Limited
9.14. Next Radio Ltd (Next Mediaworks Limited)
9.16. Southern Cross Media Group Limited
9.17. TBS RADIO, Inc. (Japan)
9.18. ABC Audio
Saavn Media Pvt Ltd.
Pandora Media, LLC
Airtel Digital Limited
Entercom Communications Corp.
Music Broadcast Limited
BAUER CONSUMER MEDIA LTD
Digital Radio (Delhi) Broadcasting Limited
Next Radio Ltd (Next Mediaworks Limited)
Southern Cross Media Group Limited
TBS RADIO, Inc. (Japan)
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