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Growth of Programmatic Audio Advertising Spending and Its Comparison to Radio Advertising

Updated: Dec 29, 2022

Programmatic audio advertising, which involves the automated buying and selling of digital audio ad inventory through real-time auctions, has seen significant growth in recent years. According to a report by the Interactive Advertising Bureau (IAB), programmatic audio ad spending in the US increased by 33% in 2020, reaching $1.7 billion. This growth is expected to continue, with estimates projecting that programmatic audio ad spending will reach $3.3 billion by 2024.


So, what is driving the growth of programmatic audio advertising, and how does it compare to traditional radio advertising? One factor contributing to the growth of programmatic audio is the increasing popularity of streaming services, such as Spotify and Pandora, which offer targeted and measurable advertising options. Programmatic audio allows advertisers to target specific audiences based on their listening habits and demographics, making it a more efficient and effective way to reach potential customers.


Another factor driving the growth of programmatic audio is the increasing use of smart speakers and other voice-activated devices. These devices offer a hands-free listening experience and are often used for tasks such as playing music, setting alarms, and answering questions. This presents an opportunity for advertisers to reach a captive audience through programmatic audio ads.


While programmatic audio advertising is experiencing rapid growth, it is important to note that it is still a relatively small portion of the overall advertising market. Radio advertising, on the other hand, is a mature and established industry, with a long history of reaching audiences through the airwaves. In 2020, radio ad spend in the US reached $17.8 billion, according to the Radio Advertising Bureau.


Despite the growth of programmatic audio, radio advertising remains an important medium for reaching audiences, particularly in local markets. Radio advertising allows advertisers to target specific geographic areas and reach a wide audience, as many people still listen to the radio as a source of news, music, and entertainment.


Overall, programmatic audio advertising is experiencing rapid growth, driven by the increasing popularity of streaming services and the use of smart speakers. While it is still a relatively small portion of the overall advertising market, programmatic audio offers targeted and measurable advertising options for advertisers. At the same time, radio advertising remains an important medium for reaching audiences, particularly in local markets.

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