New Digital Audio Trends to Guide Your DTC Pharma Advertising Strategy
New earnings results from Spotify confirm that digital audio platforms are continuing to outpace expectations, giving consumers a personalized way to engage with their favorite media while offering pharma marketers and media buyers an increasingly effective way to reach health audiences with advertising.
For consumers, there is a lot to like about these platforms. Some estimates put the total number of available podcasts around 2 million and growing, giving consumers a wide selection to choose from. These platforms also give consumers lots of control over the experience, letting users dictate when and where they engage with their favorite media. There are clear benefits for advertisers as well, as these platforms offer a flexible and dynamic alternative to endemic advertising, allowing them to target audiences based on the person, rather than contextually relevant content.
As you’re building out your pharma marketing or media buying strategy, this steady growth presents a clear opportunity to diversify the mix of DTC advertising. Digital audio platforms offer an increasingly effective—and often untapped—channel to target highly qualified health audiences.
Here are some of the key trends you should know when adding digital audio to your channel mix.
Consumer audio usage and advertising revenue is rapidly climbing
Digital audio platforms aren’t new, but they are growing. Fast. In the U.S., digital audio consumption has reached 1 hour and 40 mins per day for the average adult, accounting for nearly 13% of overall media time in that age group.
Most recently, Spotify—the world’s most popular digital audio service—grew monthly active users (MAU) by 19% year-over-year to 433 million, according to the company’s fiscal second quarter results. Digital advertising revenue grew as well, jumping 31% to $365 million, representing 13% of total revenue, a new record.
More broadly speaking, digital audio ad spending in the U.S. is expected to reach $3.58 billion by the end of 2022, with a projected growth rate of 6% to top $4.8 billion by 2027. In that same time frame, the number of total listeners is expected to reach 231 million.
Pharma audio advertising is increasing, and increasingly effective
For the pharma industry specifically, while audio channels represented only about 1% of all digital channel impressions in 2021, a closer look at the numbers shows significant growth— and opportunity. >
According to Veeva Crossix DIFA data from 2021, 50% more advertising campaigns included digital audio tactics compared to the previous year, and audio impressions increased 61% over that same timeframe. Certain condition categories led growth in overall impressions, with women’s health and preventative medicine topping the list.
In tandem with the increase in usage and impressions is an overall increase in targeting quality and conversion rates, demonstrating that digital audio tactics help pharma marketers more precisely target health populations.
Our Crossix data also shows that targeting quality for audio channels rose by 4% year-over-year, and overall conversion-to-brand rates rose 11%. But, perhaps the steepest gains in effectiveness were made in conversion-to-brand rates when comparing audio to digital display, which showed a 120% increase year-over-year.
Focus on audience quality, compliance, and scalable ROI
Because using health audience segments in digital audio advertising targets the person, it can help make your campaigns more targeted and effective, delivering scale and improved ROI for each ad dollar spent.
Importantly, you shouldn’t think of digital audio channels in a silo; rather, expanding your strategy to digital audio channels helps you amplify and unify your omnichannel advertising investments, reinforcing key messages wherever your audience is spending time.
As more and more consumers flock to these platforms to consume content, however, the competition will flock there as well.Here are some key questions to keep in mind to make the most out of your digital audio advertising spend and stay ahead of the competition:
- Are you reaching the right health audience? Audience quality is a leading indicator of campaign success. Make sure you’re working with a partner who understands your targeting needs, and measure early and often to assess that your digital audio tactics are reaching the right audience.
- Are your health audience vendors complying with responsible data privacy practices? Health Insurance Portability and Accountability Act (HIPAA) compliance is essential, but insufficient. The gold standard is Network Advertising Initiative (NAI) guidance, which provides U.S. guidelines for responsible data collection and usage in digital advertising. Look for partners that are members of the NAI to ensure that your campaigns are following a privacy-safe approach.
- Are you achieving scalable ROI across all channels, including audio? Health audience segments should help you reach highly qualified audiences at scale in a cost effective manner. By adding digital audio tactics to your channel mix, you can ensure that your audience strategy and messaging are unified across all audience touchpoints. This reinforces key messages across channels and greatly expands the impact of your advertising strategy.
The ultimate goal is new patient starts, and following the steps above will help you reach highly qualified health audiences at scale with strong ROI in a compliant and privacy-safe manner.
For more information about the effectiveness of health advertising across channels, read the full 2022 Trends in Health Advertising Report.