Digital Audio – Is it worth the cost?
When a history of MetaMetrics blogs comes to be written, the record will show that we gave March 2024 over to the subject of the ear. Specifically, the digital ear. And the reason for that is simple – we’ve seen clients increase their investment in digital audio, for better or worse, by nearly 400% in the last 5 years. As we explore the world of digital audio, the big question emerges:
Is it worth the cost?
Defining Digital Audio
Before we explore the worthiness of the investment, let’s establish some definitions. What exactly is meant by ‘digital audio’? In today’s digital age, most audio is transmitted digitally (does anyone still tune into the shipping forecast on long wave radio?), so when discussing digital audio, we typically refer to one of three things.
Programmatically bought digital radio, through platforms like DAX
Ad funded streaming services like Spotify, Tidal etc.
Podcasts: We usually categorise this into two sections (and will continue to do so throughout this article):
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- The first section involves typical programmatic ads purchased via platforms like ACAST.
- The second section focuses on enhanced engagement, such as sponsored reads, which we will label as content-led.
We use these in contrast to traditional, or linear, radio, which refers to spot radio advertising heard on a traditional radio. Even though it may be digital, it’s not transmitted over the internet. Under our definition of traditional radio, we also include radio sponsorships, where a brand sponsors a mention (‘ident’) at the beginning, middle, and end of a radio show. Although the purchasing method and messaging may vary, it shares similarities with traditional radio advertising in other aspects.
Exploring the infamous ROI
As ever when it comes to ROI, cost is half the equation (Our free ebook, The Big Book of ROI will tell you more). How much do these things cost? Obviously, the answer varies, but from the evidence we’ve seen, the cost is approximately 5 times higher on a CPM basis for Digital Audio and an additional 2 times for content-led Podcasts.
However, what about effectiveness?
The theory suggests that the payoff may be worthwhile due to the improved response rates. Studies have shown that digital audio surpasses traditional radio, with up to 15 times higher uplift per impression, and higher again for content-led podcasts.
Combining these findings, the overall effect on ROI reveals that digital audio outshines linear radio by threefold, while content-led podcasts are in the same ballpark. Surprisingly, these figures align with the comparison between Linear TV and platforms like BVOD and Adsmart.
How far can it go?
But ROI is not the only game in town. Dare we meantion ‘reach’? Traditional radio, in particular, excels in providing additional reach, potentially extending beyond the existing customer base. Digital audio, while potentially delivering higher ROI, may sacrifice reach.
So, in a nutshell, digital audio:
- Has various meanings.
- Typically has a higher CPM compared to traditional radio.
- Can potentially result in a higher ROI.
- However, this might come at the expense of reach.
Considering all these factors, the decision to invest in digital audio is nuanced. It’s essential to align with your communication objectives and understanding your audience.
If you’d like a conversation about measuring anything aural, feel free to reach out to us. In the meantime, download our free ROI Ebook.
Sam Watts
