Recently Warc released one of it’s reports on media channel revenues vs time spent and I have seen a lot of commentary about the big gap between time spent (31%) and percentage of advertiser revenues (9%) in the audio space. As someone who was involved in digital back in 2000 and all the way through its growth it reminds me of how much the digital crowd used to complain about the exact same thing. To compound the digerati were always incredibly frustrated by the fact newspapers used receive disproportionally more revenue than they should.
I think in both cases, although from different directions, the one thing it shows is that the advertising community, both agencies and advertisers tend to move a little more slowly than the audiences out in the world. Speed of change is vital from a number of angles, firstly the industry moves more slowly than audiences, but then within that, some businesses (not all) move even more slowly and eventually start to fall behind. There are organisations in the Radio world for instance that need to continue to change and change fast to keep up with those audiences that represent that 31% and actually take advantage of them. The Publisher world has seen winners and losers and those who are winning all have one thing in common, they grabbed the future with both hands and turned it to their advantage. Companies like Hearst, Future, Telegraph, Guardian each took the chance to capitalise on digital developments and it has paid off for them.
SO back to Audio, and those who are commenting on the gap, what I would say is that although sometimes it is frustrating, I do believe the industry eventually does catch up and Audio will continue to see a great growth over the coming years. I have seen some comments about how radio is cheap / cost effective and other related words, as a means of explaining why advertisers should engage, I would massively look out for and avoid this kind of rhetoric. Many of the digital audio companies like Spotify, DAX etc are by no means cheap and rightly so, they bring the benefits of audio with the data and targeting of digital, they deserve to expect a premium. Audio just needs to keep focusing on its benefits and demonstrating the commercial benefits of spending with their media channel – TV and Radio has had years of demonstrating ROI, digital audio on the other hand needs to work a bit harder in that area, years of learned performance will help advertisers invest more and more and thats when the revenue will start to shift at scale.
Overall I am incredibly optimistic for Audio and I think we will see lots more growth to come, but the traditional publishers in Radio have to adapt fast to take advantage of this and the digital audio companies must demonstrate ROI if they are to shift that revenue vs time imbalance, only time will tell, but I am very optimistic.