Six in ten local advertisers plan to spend more on digital audio advertising in 2019 than a year ago. No other medium other than digital video is getting a warmer embrace by local businesses in Borrell Associates’ newly-released annual survey of local advertisers. That 61% of local spenders who aim to put more into digital audio could boost the overall count of clients who spend in the category which also includes streaming radio and music services. Borrell’s survey shows currently 6.5% of local advertisers say they’re allocating some of their budget to that type of ads. In fact, that number has the potential to double since when Borrell asked which form of media that they didn’t buy in 2018 that they plan to buy this year, 6% said digital audio, including podcasts.
The average local advertiser said they expect to spend $114,400 on advertising this year and among those who put money into digital audio the average is $14,173. While that may not sound like a lot of money, it’s twice as much money as the local advertiser allocates to email marketing. And three-times what users of mobile ads or Yellow Page ads will spend on those mediums.
That digital audio figure likely has its relationship to broadcast radio to thank. Borrell says 44% of local clients said they’re buying AM/FM radio and spending on average $44,722 with hometown stations. Only TV gets more money, on average. And Borrell says those local stations are actively pushing digital options. Among those who responded to the survey, 38% said they bought some form of online advertising from a local radio station. And another 21% said they were offered something but opted not to buy it.
The importance of the connection between local radio and podcasting is illustrated by looking at the 1,006 local advertisers who said in the survey that they buy AM/FM radio and streaming audio ads. Borrell reports a quarter said they placed their digital ads on podcasts.
No media is immune from churn, however. And the Borrell survey found that 9% of those surveyed said they plan to cut back on the amount of money they’ll put into digital audio advertising in 2019. That single-digit number is on par with the other forms of fast-growing digital media.
The survey was conducted from April to July and in it included 2,288 total respondents. Borrell says the participants were solicited from the active advertiser lists of various media companies across the country.
Borrell in April forecast local advertiser spending on podcasting and streaming audio would increase 74% during the next five years. It projects $720 million will be spent on podcasts and streaming audio by local marketers this year. That’s a 22% increase compared to last year. It expects that number to hit the $1 billion milestone next year and by 2023 local marketers are forecast to spend $1.25 billion on podcasting and streaming audio advertising.