Media fragmentation has been creating challenges across sectors, and Retail and CPG are no exception. Strategic decisions are becoming more complex as brands search for the most effective response to the cost-of-living crisis, the growth of ecommerce, changing consumer expectations, shoppers’ desire for more personalized experiences and the splintering of the media landscape.
There are significant opportunities for brands and retailers to leverage the strengths of digital audio to keep pace with the evolving path-to-purchase, according to new research by WARC, the global authority on marketing effectiveness, and Spotify, the world’s most popular streaming audio platform.
‘Sonic boom: How digital audio can help Retail and CPG brands win the path-to-purchase’, details the results of a survey with over 350 CPG and retail marketers from the USA, Canada, UK, Germany, France, Italy and Spain. It includes in-depth interviews exploring current thinking around the media mix and analyzes media spend and trend patterns with a particular focus on digital audio.
Aditya Kishore, Director of Insights, WARC, says: “The challenge in determining the optimal media mix has intensified steadily in recent years for advertisers. This report developed with Spotify provides valuable insight into the media landscape across the two continents and the potential role for digital audio in navigating an era of extraordinary media fragmentation.”
John Gregory, Global Category Development Officer – Retail, Spotify, said: “For advertisers, it’s critically important to gain awareness and drive loyalty by delivering on the consumer expectation that preferred brands know them and can provide relevant product offers and highly personalized experiences consistent with their particular needs. It was our desire to better understand the current alignment between advertisers and consumer media engagement that prompted Spotify to launch this study with WARC.”
Justin Faiber, Category Development Officer – CPG, Spotify, added, “As consumers are ‘always on’ and the ways consumers engage with advertising from brands is in constant change, we found it essential to highlight digital audio’s place as a marketing lever within the media mix that brands can’t overlook.”
Key findings highlighted in the report are:
96% of Retail and CPG marketers are evolving their approach to advertising. Deploying a wider range of media channels is their top priority
As the path-to-purchase evolves and marketers seek improved ROI, 96% of Retail and CPG brands have revised their approach to advertising over the last five years. 59% are investing in new platforms to improve campaign reach, while 50% are placing heightened emphasis on shoppable channels like retailer media and social commerce.
Rene Lassauzet, Head of Brand & Creative Excellence and The LEAD – Content Studio, Nestlé USA, said: “Fundamentally, the landscape has become very complex and multi-dimensional. A few years ago, it was more about just three or four touch points. Then the digital space exploded and offered possibilities for content creation and brand communication. These opportunities became even more complex as the generations changed. We now have Gen X, Millenials and Gen Z and brands must be able to connect with them.”
According to the research, on average, Retail and CPG brands spread their investment over 3.4 channels. Adoption of social media is almost universal (85% of respondents) followed by online video and display (60%) and print (44%). Advertising in podcasts (30%) and music streaming services (26%) both performed strongly.
62% of Retail and CPG marketers who advertised on music streaming services during the last 12 months regard them as core to the media mix.
North American and European consumers spend 20% of media time on digital audio yet Retail brands allocate just 1.4% and CPG brands 1.1% of their media investments on audio
Consumer demand for digital audio is growing, but there is still a striking imbalance between share of investment and share of consumption.
Among consumers aged 16-64, digital audio platforms now command 20% of all time spent with media. That figure rises to 25% among younger audiences. 16-24 year olds in the US spend 70 minutes more each day with digital audio than with all forms of social media.
However, share of investment is still strikingly low compared to share of consumption. In the US digital audio platforms attract 1.4% of Retail and 1.1% of CPG budgets. Investment in Europe is considerably less ranging from 0.8% to 0.2%.
64% of Retail and CPG marketers plan to increase spend on podcast advertising, with 55% investing more in music streaming services
Last year, the number of podcast downloads quadrupled in Spain and increased nearly five-fold in France. New listeners are coming from all age groups and demographics. As marketers seek to take advantage of the digital audio boom, investment on digital audio is on the rise.
A significant majority of Retail and CPG marketers expect their budgets to increase in 2023. 64% are planning to up spend on podcast advertising, with 55% investing more in music streaming services.
Digital audio is highly effective across the path-to-purchase
Sentiment towards digital audio is positive, especially in North America, and most Retail and CPG marketers recognize digital audio’s strengths across both hard and soft measures.
Key strengths of digital audio identified by marketers surveyed are its rich first party data and high advertising receptivity, which can help Retail and CPG brands build incremental reach while increasing targeting precision.
Research by Neuro-Insight has found that digital audio’s average engagement levels are 14% higher than TV, 18% higher than social media and 23% higher than terrestrial radio. CPG brands are particularly favorable towards podcasting, with 81% citing strong levels of listener engagement.
A complimentary copy of the full report, which also includes case studies from Getir, Kerrygold, IKEA, and Snickers, is available to read here.
