Audio Advertising Market - Forecasts from 2022 to 2027

The audio advertising market was evaluated at US$31.811 billion in 2020 and is projected to grow at a CAGR of 5.07% during the forecast period.

Audio advertising is the presentation of advertisements in the form of audio records via internet streaming platforms such as podcasts or 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 the number of users, owing to the COVID-19 pandemic. According to the IAB Internet Advertising Revenue Report, digital advertising increased by 35% to reach $189 billion in 2021. 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 ad-blockers 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 huge 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 has crossed the $26 billion mark across all genres, an 18% increase over the previous year. This increase 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 take action 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 also 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 be able to 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 huge 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, increased from $708 million in the year 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 continues 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 also provide a better ad-free experience for users, and 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 the necessity of premium audio subscriptions from streaming companies. Such an increase in the adoption of ad-blockers may prove to be unfavorable for audio advertising agencies and companies.

Market Segmentation:

By Medium

• Radio
• Music-on-demandBy Device
• Smartphones and Tablets
• Smart TV
• Radio
• OthersBy Geography
• North America
• USA
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Europe
• Germany
• France
• UK
• Middle East and Africa
• Saudi Arabia
• UAE
• Asia Pacific
• China
• India
• Japan
• South Korea
• Taiwan
• Thailand
• Indonesia
• Others