Media Buyers: Gen AI-Powered Creative, Podcasts Are A Boon For Audio, But ‘Hard Questions’ About Budget Remain

Advances in audio measurement and targeting of digital audio could challenge broadcast radio budgets, buyers have warned. But creating ‘ads on the fly’ through Gen AI, and the rise of podcasts could bring new money into the mix.

Radio broadcasters under pressure to prop up stagnant linear audio budgets could receive a shot in the arm if they embrace the power of Gen AI technology and the rising popularity of podcasts, according to senior media executives.

Earlier this week, IAB Australia’s Audio State of the Nation Report, which polled 219 buy-side executives, found 83 per cent of media agencies have digital audio (streaming and podcasts) as a significant or regular part of their activity, with media planners attracted by audio’s audience attention and engagement (chosen by 62 per cent), incremental reach (52 per cent) and its ability to complement other media channels (50 per cent). 

The IAB findings follow a recent study, revealed by Mark Ritson at the HEARD conference, which found investing just 11 per cent on spend on radio can double a campaign’s effectiveness.

Media buyers said that advances in measurement splitting digital audio from broadcast, as well as more sophisticated targeting, is making investment in digital audio more attractive. Last year, investment in digital audio increased by 10 per cent, while broadcast radio was down by about 6 per cent, according to SMI data.

Omnicom Media Group’s head of OOH and audio partnerships, John Lynch, said that the challenge for the audio sector is whether it could attract investment into digital audio from other media channels.

“I think the biggest concern from the media side of things in this country will be where’s that money coming from,” he said. 

“So, if you’re a broadcast radio operator, is that just a cannibalisation of your current expectations of revenue, or are you getting that from elsewhere?”

Lynch said that due to advances in measurement that split digital audio (streaming and podcasts) audiences from broadcast, there is now a “greater acceptance” of investing in digital audio in its right.

“If we take out the digitally delivered audiences from total broadcast audio, there’s probably a hard conversation to be had around pricing on linear broadcast. But ultimately it gives us loads more options,” he added.

AI-POWERED FLEXIBILITY

Lynch believes the power of AI-generated creative, that allow brands to “build audio ads on the fly” and tweak voice without having re-record, is an attractive proposition for advertisers.

“One of the things about digital audio that has maybe held us back in the past has been the ability to make various different small tweaks to audio quickly and efficiently,” he said.

“One of the conversations I’ve had with a client, and they mentioned they had about 14,000 different digital (display) ads across the year, is that they don’t have that in audio because of the difficulty in trying to get somebody to re-record an ad efficiently. We’re having conversations now where you can potentially use AI to manipulate the voice of an actor to say different things…and that kind of flexibility is great. If we’re moving to a world where we can use AI to change (creative) quickly, easily and convincingly, then that’s definitely gonna be a positive for the future.”

Nearly half of media buyers believe that Gen AI can power content customisation in audio. Source: IAB Audio Advertising State of the Nation report.

PODCASTS’ POWER

Greg Cattelain, the head of biddable media at Spark Foundry, told B&T another area that advertisers are looking to increase investment in is podcasts, noting that Australia leads the world in digital audio listening, with 81 per cent of the population tuning in.

“The appetite from a buyer’s perspective is on the rise due to more sophisticated trading and targeting, personalisation and the rise of podcasts,” he said.

“There is a tremendous opportunity to capture new revenue in podcast audio. Podcast listeners are more engaged, targeted and there is now genuine scale with millions of Australians as regular listeners.

“Podcasts allow brands to engage with hard to reach audiences in a medium that they trust. That provides a compelling business case to invest more in digital audio.”

On the trading front, Cattelain believes that some advertisers are shifting spend from linear channels into digital audio, but overall it’s a “positive story” for radio.

Recent results from the largest radio broadcaster, Southern Cross Austereo (SCA), are not as upbeat, but hint at the potential of digital audio. 

Although overall revenue fell by 2.9 per cent to $252.6 million and earnings (EBITDA) slumped by nearly 30 per cent, digital audio revenue was up 27 per cent but remains a small chunk of the overall pie. 

Entertainment, lifestyle, health and wellness are the most popular podcast categories for advertisers. Source: IAB Audio Advertising State of the Nation report.

DIGITAL AUDIO ‘IN RUDE HEALTH’

At rival network Nine, audiences continue to flourish due to technology making it easier to consume audio on mobile devices.

“What we have seen is that there’s no audience problem, technology has been an enabler of audience growth. Streamed digital radio and podcasting is in rude health…our digital streams are up about 25 per cent and our podcasts are up about 15- 20 per cent,” Nine’s director of sales for total audio, Ashley Earnshaw, said.

This means that Nine’s digital audio revenue is growing through as clients look to diversify their audio investment and seek incremental reach.

“If you look at what Ritson said (at the HEARD conference), podcasts are incremental to radio listening. Marketers realise this and we are seeing new money coming in for digital audio and podcasts in particular.”

Earnshaw agrees that AI technology, dynamic creative and contextual solutions audio are also attracting clients to invest more into digital audio.

“As clients continue to reassess and double down on their audio strategies, digital is becoming more important. There are solutions on offer to advertisers that enable them to innovate in audio, and we’re seeing more demand for that.”

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