If You Cut Your Audio Budget, You’re Missing Out

You may be tempted to cut spending across one media channel and go all-in on another. But if you cut digital audio, you’re missing out on better return on ad spend (ROAS), more diverse audiences, and bigger reach.

As budgets, demographics, and goals shift, advertisers may be tempted to cut spending across one media channel and go all-in on another. TV, the old advertising mainstay, may seem like the better option for your ad budget. But if you cut digital audio, you’re missing out on better return on ad spend (ROAS), more diverse audiences, and bigger reach.

When it comes to daily listening, one in two Americans are streaming digital audio.1 And they’re listening an average of four hours a day. Yeah, audiences are listening in the car on the go and on their smartphones throughout the day, but a whopping 59% of listening is happening at home.1

Let’s put digital audio listening into a familiar perspective—it’s like watching the Game of Thrones final season three times in one week or 46 episodes of Paw Patrol (which parents of toddlers may aspire to cut back to).

Better ROAS

Reason number one to keep digital audio in your media mix: you’ll get more bang for your buck. In the case of a blind study with Nielsen,2 we evaluated return on ad spend. Pandora, above all other media, drove the highest ROAS relative to cost.

As you can see, while Pandora is clearly crushing it, digital media is no slouch, providing better ROAS over traditional media, including TV and AM/FM radio.

Younger and More Diverse Audiences

Reason number two to make digital audio a priority: you’ll reach more audiences. Digital audio is a must-have if you want to reach Millennials and Gen Z. Streaming digital audio reaches 73% of 18-34-year-olds and 80% of 13-24-year-olds.3

Traditional media consumption continues to decline. Linear TV is attracting fewer viewers, with 81% of U.S. television networks seeing quarter-over-quarter declines.4 The average number of households watching cable TV is down 10%.5 And the move to streaming services means less time for advertisers to get their message across, with 93% of views having access to ad-free streaming video subscriptions.4

Black and Hispanic audiences are spending even less time with TV—51% of Hispanic viewers and 42% of Black viewers identify as light TV viewers.6 And 30% of Hispanic audiences and 26% of Black audiences either kicked cable to the curb or never had it to begin with.6 On the other hand, digital audio is attracting Black and Hispanic audiences. When surveyed, 68% of Black Americans said they consider themselves music fans, and 70% of Hispanics said they listen to more audio content today because they can access it anywhere.7

Bigger Reach 

Reason number three to make digital audio a part of your media buy: your message will go where TV can’t. Adding digital audio to your media mix—or keeping it in—will extend your campaign reach. Through headphones, earbuds, car stereos, and smart speakers, 80% of audio listening happens when no visual media is available.1 That means when you combine audio and visual advertising, you’re increasing your opportunities to reach your target audiences throughout the day, no matter what they’re doing. And if you really want to turn up your incremental reach, you can’t go wrong by

adding podcast advertising, which gives unduplicated reach over and above other audio (e.g., Pandora, SoundCloud, and SiriusXM).

Reach More Audiences with SXM Media

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1. Edison Research, Share of Ear Study, Q2 2022

2. Nielsen, prepared for Pandora Syndicated Category Mix *Other Media Spend Is Estimated Via Nielsen Adintel

3. eMarketer, P18+ who use a desktop/laptop or mobile device to go online while watching digital video or traditional TV content on a TV set at least once per month, Dec 2019; Individual Device used while watching TV (smartphone, laptop/desktop, tablet)

4. Pandora Soundboard, 2021 Streaming TV Poll, A18+ (N=2,517), August 2021

5. Samba TV Q1 2021 State of Viewership Report

6. Simmons Fall 2019 NHCS Adult Study 12-month

7. Pandora Soundboard, 2022 User Study, AA18+, March 2022