Introduction

Digital audio has become the preeminent tool for brands seeking to forge deeper connections with their audiences. 

“Audio can do it all: build awareness, drive consideration, and deliver the conversions that performance marketers are looking for,” said Kurt Kaufer, Co-Founder of Ad Results Media (ARM), in a recent article showcasing audio’s full-funnel capabilities. “But it also has the added benefit of building trust and connection—factors that turn casual buyers into brand advocates.”

Over 214 million people—that’s more than 75% of Americans aged 12 years and older—now engage with digital audio content, with listenership numbers consistently climbing year over year. Research into audio’s effects on the brain confirms why people love audio content so much: Listeners exhibit high levels of engagement, memory retention, and positive attitudes when listening to audio—and all that positive sentiment extends to advertisers in the space. The ad industry has sat up and taken notice, investing $7 billion in digital audio ads in 2023, a 19% increase from the previous year and the fastest growth rate among online media channels. This momentum has only accelerated in 2024.

How can marketers leverage this powerful medium? In this ARM guide, we’ll explore the essentials of digital audio advertising, including: 

What is digital audio advertising?

Digital audio advertising encompasses a variety of formats, each tailored to reach audiences in unique ways. Among the most prominent types are podcast advertising, streaming music ads, and streaming radio or news ads.. 

Podcast advertising has gained significant traction in recent years as podcasts have become a staple in consumers’ daily media consumption habits. Advertisers can reach highly loyal listeners who are deeply invested in their favorite shows, which range from niche topics to widely popular entertainment. With options like pre-roll, mid-roll, and post-roll ad placements, brands can strategically target audiences with ads at different points within an episode to maximize attention.

Streaming music offers another powerful ad medium, allowing brands to connect with listeners during their music sessions on platforms like Spotify, Pandora, and Apple Music. Ads here are seamlessly inserted between songs, providing an experience that feels natural to the listener. Many streaming platforms allow advertisers to buy placements programmatically or directly, enabling flexibility and precision in reaching target demographics at various times of day. 

Streaming radio, meanwhile, gives brands access to traditional radio’s broad reach with the flexibility of a digital platform, capturing listeners who tune in to on-demand news or live radio streams. Examples of streaming radio platforms include iHeart Radio and Radio.com.

Digital audio ad types

Dynamically inserted ads

Dynamically inserted ads—often abbreviated as DAI (dynamic ad insertion)—are pre-recorded ads that are auto-inserted into audio content for a specific period of time.

DAI gives advertisers tremendous flexibility in where ads play in digital audio content. Since the ad’s placements are dynamic by definition, they can be delivered in ad inventory that meets various criteria such as contextual signals, seasonal trends, weather, and retail promotional periods. These ads are scripted and typically read by voice talent, the podcast show’s host, or the podcast show’s producer. 

Integrated ads 

Integrated ads (also referred to as baked-in ads) are integrated directly into the audio content, making them a permanent part of the podcast's audio file. Unlike dynamically inserted ads, which can be updated or swapped out based on targeting criteria, integrated ads stay with the episode permanently. 

The ads are often read live during the recording of the show’s main content by the podcast’s host(s). Hosts are typically not given a script, but are instead given a set of brand talking points to mention in their endorsement. The goal is to have the ad embody the personality of the host from tone to language and delivery, creating a personal and authentic feel that builds trust and emotional resonance with listeners, who often have strong connections with their favorite personalities. 

Benefits of investing in digital audio campaigns

There’s a reason that digital audio is so attractive to marketers. Audio provides a wide range of capabilities and benefits to advertisers, including accessibility, reach, advanced targeting, brand safety and suitability, and strong engagement. Below are the six main benefits of digital audio advertising: 

Accessibility

Audio is uniquely accessible for listeners, reaching them wherever they are and seamlessly blending into their daily routines. 

Unlike visual media, which requires eye contact and is often lumped into the increasingly fraught category of “screen time,” audio can accompany listeners on the go, whether they’re commuting, exercising at the gym, cooking dinner, or in the office. In fact, 74% of listeners cite audio’s portability as a major reason for their engagement. For brands, this means they can reach audiences during moments when other media simply aren’t accessible, since 79% of audio consumption takes place when visual media isn’t available. Thus, audio opens up valuable, otherwise untapped opportunities to connect with consumers throughout the day, enabling brands to maintain continuous, meaningful engagement with their audiences.

Advanced targeting

Audio advertising’s advanced targeting capabilities allow brands to tailor messages and deliver those messages to the most relevant ads based on demographics, geography, and contextual data. 

Using DAI, podcasts can deliver ads that serve in real time, adapting to the unique characteristics of each listener and the advertiser’s desired message. For example, ads can be adjusted based on factors such as the listener's perceived age, gender, income, daypart, seasonality, location at the time of listen, or even weather events, which ensures that ad content is relevant and meaningful. 

Additionally, contextual targeting leverages cues from the content itself and the listening environment, allowing brands to match the mood of the moment. For example, a fitness brand can target listeners who are streaming workout playlists with an upbeat and motivating message, while with different contextual cues, they might serve an ad that is more educational with the understanding that the listener can’t take immediate action. If the same individual is tuned into a wellness podcast, the same brand might tout the relaxation benefits of their offering. This sophisticated level of targeting not only maximizes relevance but also improves engagement. 

High share of voice

Audio advertising provides marketers with a unique opportunity to achieve a high share of voice, standing out in a relatively uncluttered environment. While consumers devote 31% of their media time to audio, only about 9% of advertising budgets are allocated to this medium. This significant discrepancy means that compared to crowded digital or social media channels, audio has far fewer competing messages, giving brands a clearer path to capture listener attention. This also increases the likelihood of reaching consumers multiple times, reinforcing brand recall and memorability. 

Reach

Digital audio offers impressive reach, connecting with audiences on a scale that often surpasses other digital media. In fact, audio boasts four times the reach of connected TV (CTV), thanks to its accessibility across multiple devices and listening environments. 

Unlike video-rich formats, which require a viewer’s full attention and screen access, audio can accompany listeners throughout their daily lives, which allows advertisers to reach specific audiences wherever they are—and at scale. Streaming audio and podcast platforms have vast and diverse user bases that continue to grow. 

For brands aiming to reach specific demographics, digital audio offers tremendous opportunities. For example, 37% of millennials regularly listen to podcasts, a higher percentage than any other group. And Gen Z views streaming music and podcasts as a catalyst for connection and audio as an “antidote to doom scrolling,” making it a powerful place to reach them. 

Engagement

Digital audio listeners are very engaged and receptive to brand messages. In fact, research has revealed that 71% of podcast listeners are eager to learn more about brands that advertise on their favorite shows, a figure that surpasses receptiveness in any other advertising medium.

This high level of interest is further fueled by the positive atmosphere associated with audio content. Indeed, listeners are four times more likely to view streaming audio as a valuable use of their time compared to social media, a sentiment that increases to six times for podcast listening. This trend is particularly pronounced among younger listeners, with 60% of Gen Z expressing greater trust in audio versus other media. 

Brand safety and suitability

In today’s media environment, brand safety is crucial as consumers increasingly hold brands accountable for the content surrounding their ads. Brand safety ensures that advertisements do not appear alongside content that conflicts with a brand’s core values, while brand suitability focuses on aligning ads with content that reflects the brand’s identity. This is especially important in the face of potential risks such as misinformation, hate speech, and polarizing views, which can damage a brand’s reputation. Studies show that a significant portion of consumers would hold a brand accountable for inappropriate content and may even stop using the product if the brand is associated with offensive material.

For brands looking to advertise on podcasts and/or alongside music and news channels, ensuring brand safety is particularly challenging due to the personal and often uncensored nature of podcast content. To help mitigate these risks, ARM offers a comprehensive approach to brand safety, considering factors such as content, context, target audience, and host personality when developing media strategies. ARM’s team leverages both AI and human expertise to actively monitor content and performs detailed research to identify any potential risks, ensuring that brands are protected from harmful associations in real time. 

The efficacy of the digital audio medium 

Digital audio advertising is effective at every stage of the marketing funnel, providing brands with a versatile tool for reaching and engaging consumers throughout their journey. “The team at ARM has been instrumental in building and implementing an audio strategy that performs for our brands,” said Brynn Greenelsh, Marketing Manager at Auctane, which has launched several audio campaigns with ARM. “With their network and expertise, they scaled our reach while monitoring our spend—lowering our CPA along the way.” Audio’s unique ability to do everything from expand awareness to deliver conversions at low CPAs makes it extremely effective and viable for brands of all sizes.

Audio advertising effectiveness is rooted in its unique impact on the human brain. Research indicates that sound significantly influences key cognitive processes, driving ad effectiveness in ways that other media cannot. In fact, 93% of the brain’s engagement with content on platforms like Spotify translates directly to ad engagement, resulting in a remarkable 19% higher brand breakthrough compared to video and social media channels. This heightened level of engagement means that audio ads are not only heard but also remembered, allowing brands to leave a powerful and lasting impression on their audience.

Compared to traditional video and social media, audio boosts overall ad engagement by 33%, increases emotional intensity by 9%, and improves detail memory by 32%. These metrics emphasize the role that audio plays in forging connections by creating an immersive and emotionally resonant experience that does more than convert; it can create lifelong brand affinity. 

At the top of the funnel, audio’s combination of reach, relevance, and intimacy breaks down barriers to consumer attention. In fact, audio drove 50% higher average attention than video, TV, social, or display media. 

In the middle of the funnel, ARM clients like Allbirds have achieved tremendous results with audio, including 47% more site visits when their audio campaigns were running. 

Audio already has a well-earned reputation as a performance medium. At the bottom of the funnel, audio conversion rates typically top 30%. 

No matter the KPI, audio advertising has proven its efficacy, making it a winning addition to any media strategy. 

How much does digital audio advertising cost? 

The average CPM—that is, the cost per thousand impressions—for host-read ads on podcasts is generally between $22 and $25. This can vary greatly depending on how established the host is, as well as the type of content and size of their audience.

The average CPM for streaming audio ads with little to no advanced targeting is around $10, but costs rise as additional targeting is added to the campaign.

Specialized agencies like Ad Results Media negotiate rates with partners that provide added savings for brands.

How to advertise in digital audio

For brands poised to enter the digital audio space or expand their efforts there, the process can feel overwhelming. Specialty agencies like ARM streamline the process, guiding brands through every step, as outlined below. 

1. Define a digital audio strategy

To create a successful digital audio advertising strategy, brands must first set the proper goals. First, define the target audience and KPI (key performance indicator) requirements. If the goal of the campaign is direct response oriented, then defining the CAC (customer acquisition cost) target that considers the unique elements of audio advertising is paramount. For example, audio ads tend to have a drag effect that is longer than direct response ads on Google and social media platforms. Whereas a typical attribution window may be 7-30 days for direct response, audio ads can drive conversions well beyond that standard period. This is especially true for podcast ads that may not be listened to the day an episode drops. If the goal is reach and awareness, create KPIs that measure impressions, frequency, and incrementality. 

Working within those frameworks will help inform the correct audio platforms to use, the type of creative to build, the cost per ad that should be paid, and flighting needed to hit the goals. For example, an advertiser may want to only partner with podcast hosts who do live reads for a show that is strictly about pickleball. Other advertisers may want to invest in a mix of podcasts, streaming music, and digital radio, leveraging the power of personal endorsements and pre-recorded ads that are served across the entire inventory catalog of Spotify and iHeart.  

2. Develop creative

Brands should begin by identifying the types of ads that align with their goals and audience preferences. 

This includes consideration of different platforms such as podcast, streaming audio, or video podcast platforms.

  • Podcasts: Ads can be read live by the show host(s) during the recording of the show, the show host(s) can pre-record the ad, or the ad can be voiced over by an actor. Both pre-recorded ads are called “produced” ads.
  • Streaming: Since there is no “live” option, all ads are pre-recorded by either the show host or a voice actor.
  • Video podcasts: If the podcast is “video first,” meaning it’s not a video simulcast of an audio-first podcast, the ads are typically read live by the show host(s). The additional benefit of a video podcast is the fact that the brand’s product can also be displayed during the ad read.

Additionally, when considering the creative aspects of ad development, the optimal ad placement must be identified—whether that is pre-roll, mid-roll, or post-roll. Length also comes into play here, with ads typically ranging from 15-60 seconds, which means the message must be concise, yet impactful. 

For produced ads, crafting a strong script is crucial to success. The script should clearly communicate the key message while incorporating best practices for music and voice that enhance the ad's overall effectiveness. A compelling voiceover, paired with music that complements the tone and words, can create an immersive, relevant experience that connects with listeners. 

There are a multitude of effective options for creative ad development. For more insight on practices with a proven track record, we’ve crafted other guides on creating engaging ad creative. 

3. Create a media plan

To maximize the impact of audio, brand advertisers must craft a thoughtful media plan. A good media plans considers the following: 

  • Alignment with campaign goals: A deep understanding of the brand's objectives and how audio can help achieve them is an important step in creating an effective plan.
  • The audio landscape: Comprehensive knowledge of the available audio options (such as podcast ads, radio ads, and advertising on streaming services), informs a media plan that allows them to work together effectively. 
  • Innovative technology: Tools and software for efficient and effective media buying are critical for successful planning and execution.
  • Performance metrics: Insights into how different shows and platforms will perform against specific KPIs, making these important to identify.
  • Optimization of ad creative for audio: Creative approaches that should be tailored to resonate best across various audio formats. 
  • The nuance of audio: Consideration of all key factors, including ad placement, listener demographics, and listening contexts, allows brands to harness the full potential of audio advertising. 

The best audio campaigns also fit within a brand’s larger marketing strategy and can help amplify a message. For example, tactics like sequential messaging allow brands to tell a story over time across channels, building awareness and consideration within a target audience over the course of multiple touchpoints. “People love a good story,” said Gretchen Smith, ARM Vice President of Media. This approach engages individuals even more deeply and effectively guides them throughout the customer journey. 

4. Optimize

Ensure strong performance by monitoring and optimizing a campaign during its run. Optimization means incorporating real-time feedback and performance metrics into the campaign while it is still running. 

By tweaking targeting, audience, and creative throughout a campaign, brands are able to adjust to market dynamics, apply learnings from initial test periods, budget appropriately, and maximize ROI. 

Winning examples of audio ads

Subscription vitamin company Ritual's programmatic ad placement was highly targeted with messaging tailored to the audience it was delivered to.

Online therapy company Better Help's host-read ad on Armchair Expert with Dax Shephard leverages the intimacy and trust of audio.

FanDuel's fantasy sports platform was well matched to shows like the Bill Simmons Podcast, where the brand was able to reach the right listeners, building connection by leveraging the voice of the creator.

Stamps.com won big with their video podcast advertising, capitalizing on the power of audio with the complementary medium of video.

Stamps.com - JerryRigEverything

How to measure digital audio advertising effectiveness

Digital audio is no longer the wild west when it comes to measurement. Driven by advancements in audio ad tech and increasingly sophisticated analytics, we can now paint a comprehensive picture of digital audio effectiveness that goes well beyond listen counts through a combination of direct response and attribution-based methods..  

Pixel tracking 

Within podcasts specifically, pixels are an advanced measurement tool used to track a listener’s exposure to an ad and their subsequent visit to the advertiser’s website. Platforms such as Podscribe, Magellan.AI, and Claritas place their proprietary tracking pixels on a podcast episode’s RSS feed URL to capture user information such as IP address and user agent at the time of the download. They also ask the advertiser to place their proprietary tracking code on all pages of their website to capture a visitor’s IP address and user agent information to see if there is a match. This tech-enabled approach has led to a materially more accurate account of campaign outcomes, and subsequent media plans have become much more effective.  

In streaming audio, platforms such as Spotify, Pandora, iHeart, and Radio.com (Audacy) also use pixels to track user engagement from ad to website. They can also layer in first-party data in the form of user account logins to match hashed email addresses with the data captured by the pixel, creating an even more accurate account of customer behavior.

Lift studies

Lift studies offer an opportunity to gain greater insight into how effectively brands are communicating and engaging with key audiences. Whether it’s a brand lift or sales lift study, these reports offer deep qualitative insights into a brand’s ability to create awareness, recall, resonance, favorability, and interest.

These are often delivered as “pre/post” or “controlled exposure” surveys. A pre/post survey measures how ad exposure impacted desired outcomes, calculating the incremental lift of the exposed group. These are excellent for measuring ROI or ROAS. Controlled exposure surveys measure specific aspects of ad effectiveness against a defined audience that has been exposed to ad content. They then share impressions of the ad, including thoughts on things like the relevance of the message and placement. 

Promo codes

Brands can use unique promo codes within their ads, allowing them to directly attribute conversions or purchases to a specific audio campaign. Unique promo codes are integrated into audio ads on individual shows, platforms, or campaign types, capturing granular data. Technical infrastructure supports the capability to create and track multiple promo codes and sales channels, reporting on usage. 

Surveys

Surveys are a key tool for measurement in audio advertising. These can be delivered before or after exposure to a specific ad, or at the end of a specific campaign. Surveys should pull from sample sizes that account for margin of error, confidence level, and other factors, which agencies can determine based on size of the exposure group and the desired insights. Surveys can measure crucial KPIs such as awareness, recall, emotional response, and intent to act. 

Vanity URLs

Vanity URLs are another tool, offering a custom web address that listeners can visit, making it easy to track traffic generated by specific ads. Although they have a long history in audio measurement, this method is one of the least effective since most web visitors go to the home page instead of the URL communicated in the ad’s call to action. 

Why work with a specialized agency for digital audio advertising?

To unlock the full potential of audio advertising and achieve truly impactful campaigns, partnering with a specialized agency can be the key to maximizing results. Benefits include: 

  • Ad rate negotiation power: Specialized agencies have established relationships with major audio networks and independent creators, allowing them to secure favorable rates for premium ad placements which advertisers who use an in-house team might struggle to obtain without these connections. As one of the largest buyers of audio media in the U.S., ARM is able to secure preferred rates across podcasts, streaming audio, radio, and YouTube, ensuring the best possible campaign outcomes 
  • Expertise: ARM leverages its 25-plus years of historical campaign insights to create comprehensive strategies tailored to a brand’s specific goals, audience, and budget. Understanding how to properly plan media by leveraging data related to the broader audio networks, individual shows, ad placement spots, media rates, campaign outcomes like ad drag effect, and audio creative best practices ensures that returns are maximized with little trial and error. 
  • Access to advanced ad tech: From advanced programmatic tools to data-driven targeting solutions, agencies that specialize in digital audio must integrate and apply the latest technology to manage campaigns with superior agility rooted in superior data. Examples include pixel-based measurement and attribution solutions, programmatic media-buying platforms, brand safety and suitability platforms, and proprietary ad tech developed by ARM to plan and optimize campaigns more effectively.
  • Campaign optimization: Having a dedicated team consistently measuring and adjusting campaign tactics such as rates, ad placement, and ad creative types using complex data signals, translates into maximum ROI for an advertiser’s budget. In-house and full-service agencies don’t always have the capacity for this level of attention. 
  • Measurement and insights: Audio measurement is complex and hard to understand. Specialized agencies like ARM have teams dedicated to understanding the data inputs, measurement methodologies, and subsequent efficacy of outcomes to ensure the results are as accurate as possible. With confidence in campaign performance, our analytics team can create powerful insights that inform both the effectiveness of the campaign but also the advertiser’s greater marketing strategy. 

How to use digital audio effectively

Two-thirds of the American population is listening to digital audio—and that number is on track to continue growing, with the total number of regular digital audio listeners projected to reach 231.5 million in 2025. 

With the tremendous capacity of digital audio to quantifiably deliver throughout the funnel, brands with big dreams can’t afford to sit on the sidelines. For those ready to launch audio campaigns that deliver on the promise of everything audio can do, ARM experts are standing by to discuss strategy with impact. 

Let’s do this.