The Forgotten Four Trillion Impression Ad Market
BY ON April 8, 2013 IN Jelli News
As the annual NAB convention gets underway in Las Vegas this week, the media industry has a chance to discuss the state of broadcasting as well as one of it’s core business models, advertising.
There is a lot written about TV and online advertising, so we don’t need to spend much more time here on it. After all, this is a blog about audio.
Instead, I’d like to discuss an advertising market with truly massive scale, reaching hundreds of millions of monthly uniques just in the United States, serving trillions of impressions with attractive CPMs. Audio advertising.
Does “audio advertising” sound exciting to you? It’s a market that most innovators, investors and press have forgotten about, or think is dead. (Or irrelevant, which may be worse.)
But we should be excited about it. Really excited. Yes, the good old radio spot.
It’s certainly “old.” Radio, along with print, is one of the oldest advertising mediums. The radio spot is one of the oldest ad units. Most people know that audio advertising is the domain of the traditional radio broadcasters, who own the $16 billion ad market in the United States ($40 billion globally). It’s a bigger market than you might think, taking approximately 10% of all marketing spend. And it grew in 2012, in fact faster than display advertising, another thing that most people wouldn’t guess.
Let’s put this scale into perspective. Today, there are over 4 *trillion* audio impressions delivered to local and national advertisers every year, just in the United States. To compare, there are approximately 5 trillion display impressions in online advertising.
Most of the 4 trillion impressions are delivered “offline” via traditional broadcast. Broadcast radio still reaches orders of magnitudes more listeners each week than any digital service, and serves orders of magnitudes more ad impressions. This will shift over time, of course. Streaming radio and music services are just now starting to advertise at scale. We estimate digital audio advertising generates about 200 billion audio ad impressions a year, and growing. It is early days.
About half of the 4 trillion audio impressions are heard in the car. We collectively spend a couple hundred billion hours in our commutes every year in the United States. That is a lot of time to listen to radio, and 243 million of us turn on our radios each week to do so. Radio is the primary medium by which marketers reach us during the 2 hours we spend driving places.
Over the next few years, as our cars become connected, audio advertising will shift to IP delivered ads, likely though our smartphones linked to our dashboards. This shift will create one of the biggest opportunities in the consumer internet, and in advertising, in our lifetimes.
It will be a dramatic market share mover and a must win for any company that cares about the future of mobile advertising (or online advertising, for that matter).
So, if you like opportunities with scale, as in “Internet Scale,” look no farther than audio. Now this is getting more exciting.
So why isn’t audio talked about more when people discuss advertising in general. Why does a great TV ad, a great print campaign, get the attention. The creatives and innovators need to be won back.
There are 4 trillion audio ad impressions a year, the kind of reach that any marketer loves and the kind of scale that should excite entrepreneurs and investors alike. We are just starting to unlock its potential. It’s not forgotten, perhaps overlooked. But first, we’ll need to reinvent the radio ad and remind how audio marketing can be exciting.
Data sources: public data from Arbitron, RAB, Pandora, Triton Digital, Comscore, eMarketer.