GLOBAL STUDY BY MAGNA AND ORACLE ADVERTISING FINDS ADS WITH LOWER CARBON EMISSIONS ARE TIED TO HIGHER ATTENTION AND ENGAGEMENT

An ad viewed twice as long produces two-thirds fewer emissions; industry can achieve a six- percent reduction in carbon emissions by preventing delivery of non-viewable impressions

NEW YORK, NY – June 20, 2023 –A global study breaking today establishes a link between sustainable advertising practices and positive attention metrics. Attention x Sustainability: The Benefits of a Smaller Carbon Footprint in Media, conducted by MAGNA’s Media Trials in conjunction with Oracle and using Scope3 emissions data, found that the longer an ad was viewed on a page, the lower the carbon emissions.

The study analyzed over one billion impressions across 55 countries through live campaign tracking and further stress-tested findings by using AI-based, predictive eye tracking on approximately 350 display ads that appeared on 100 U.S. websites. The resulting analysis proved that a spot that was in view for 10 seconds produced 64 percent less carbon emissions than a spot with a five-second, in-view time. The Scope3 carbon emissions model, which calculates the total grams of carbon dioxide released from digital impression delivery (gCO2e), was the standard measurement used for the study.

This correlation between in-view time and carbon emissions is likely related to total ad load on each page, as the more ads that load, the greater the emissions generated. In turn, competing ads will divide viewers’ attention. Eliminating impressions that do not comply with the Media Ratings Council (MRC) standards, such as video and display ads that run below the page break and are out of view, which advertisers do not pay for anyway, will reduce six percent of carbon emissions generated by online advertising. To put this in tangible terms, based upon a Statista digital ad-impressions report, this six-percent reduction is akin to removing 34,144 cars from the road for a year.

 

“Sustainability is a vitally important facet of our business model, and this research reveals how we can foster more environmentally friendly practices in the advertising industry without sacrificing attention metrics,” said Martin Bryan, Global Head of Sustainability, IPG Mediabrands. “Often, what makes sense for our planet and its people turns out to be good for business. This study shows a way advertisers can be more sustainable and successful, too.”

The study comes as consumers are increasingly considering the environmental impact of the products and services they use. Programmatic advertising alone generates 215,000 metric tons of carbon emissions a month, across five major economies (USA, Germany, Great Britain, France and Australia), according to the Scope3 State of Sustainability Report for Q1 2023.

The new study delved further to explore the relationship between key metrics and carbon emissions, utilizing Oracle’s Moat score system, which looks at multiple performance and engagement dimensions, such as in-view time, in-view rate, screen real estate, and various interactions among other signals in a composite way as a useful index to media quality, and, as we learned, lower carbon.

Higher quality metrics are strongly correlated to generating lower carbon emissions, as Moat display score comparisons of MRC Impression display ads proved. The higher the Moat score, the lower the emissions, with ads ranking in the top Moat quality quartile generating 58 percent lower emissions than those in the first quartile.

In addition to Moat Display Scores, the study utilized Moat In-View scores and Engagement Scores. Higher engagement scores also correlated with lower emissions, with ads ranking in the first quartile yielding 20 percent higher engagement scores and 83 percent lower emissions compared to ads in the lowest quartile. The correlation between higher engagement scores and lower carbon emissions was consistent across markets.

“Brands and agencies have long had access to a wide range of attention signals for analyzing and buying media. By partnering with MAGNA to conduct this research, we have shown that attention and sustainability have a strong, positive correlation,” said Jim Sink, GVP of partnerships, Oracle Advertising. “This research provides further rationale for advertisers to optimize toward attention signals like those offered by Oracle Moat as these signals not only improve campaign targeting, but also reduce a campaign’s carbon footprint.”

Another way advertisers can help the planet is by placing static ads instead of animated ones. On mobile devices, the study revealed 34 percent fewer carbon emissions for static ads than animated, and 16 percent fewer on desktops.

For example, IPG Mediabrands has developed products and tools that help our clients be more sustainable with their marketing investments, from custom media buying algorithms optimized towards attention and lower emissions to Supply Path Optimization solutions. The relationship between attention and emissions is a win-win for all involved, and for the planet; and is an area of continued research and product development at the company.

“As brands seek to be more sustainable, from supply chain to shopping cart, the impact of advertising on the environment warrants further study, and that is something we are committed to support,” said Bryan. “This new study underscores that advertisers who avoid non-MRC compliant impressions and instead lean into lower-emission sites and ad formats can, in fact, also gain important attention and engagement metrics.”

The full study can be found here.

About MAGNA

MAGNA is the leading global media investment and intelligence company. Our trusted insights, proprietary trials offerings, industry-leading negotiation and unparalleled consultative solutions deliver an actionable marketplace advantage for our clients and subscribers.
We are a team of experts driven by results, integrity and inquisitiveness. We operate across five key competencies, supporting clients and cross-functional teams through partnership, education, accountability, connectivity and enablement. For more information, please visit our website: https://www-wp-stage.magnaglobal.com/ and follow us on LinkedIn.

 

About IPG Mediabrands

IPG Mediabrands is the media and marketing solutions division of Interpublic Group (NYSE: IPG). Mediabrands manages approximately $40 billion in marketing investment globally on behalf of its clients and provides strategic services and solutions across its award-winning, full-service agency networks UM and Initiative and through its innovative marketing specialist companies Reprise, MAGNA, Orion, Rapport, Healix, Mediabrands Content Studio and the IPG Media Lab. Mediabrands clients include many of the world’s most recognizable and iconic brands from a broad portfolio of industry sectors. The company employs more than 13,000 marketing experts in more than 130 countries representing the full diversity of humanity. For more information, please visit our website: www.ipgmediabrands.com and be sure to follow us on LinkedIn or Instagram.

GLOBAL AD MARKET KEEPS GROWING THANKS TO COUNTER-CYCLICAL VERTICALS AND RETAIL MEDIA

TEN TAKEAWAYS

  1. The summer update of MAGNA’s “Global Ad Forecast” predicts media owners advertising revenues will reach $842 billion this year, +4.6% growth vs. 2022 ($805bn).
  2. This 2023 growth forecast is just 0.2 percentage points below MAGNA’s previous forecast (Dec. 2022: +4.8%) as the deterioration of economic conditions and marketing spending in most Western markets is mitigated by stronger-than-expected growth in some markets (China, Spain), industry verticals (Retail) and media types (Retail, Social).
  3. Several industry verticals show counter-cyclical patterns in their marketing dynamic. Some are expected to grow strongly, in line with business recovery (Automotive, Travel), some are not necessarily expected (Retail) to grow. CPG/FMCG product categories are ramping up their spending with Search and Retail Media Networks, partly at the expense of traditional branding media, but mostly by reallocating trade marketing budgets, thus bringing new money in the advertising ecosystem.
  4. Traditional media companies and branding formats (Television, Audio, Publishing, OOH, Cinema) are most exposed in this uncertain business climate, as some brands reduce marketing budget or prioritize performance-based digital ad formats. Global ad revenues across traditional categories in aggregate will thus shrink by -3% to $264 billion.
  5. Global television advertising revenues will shrink by -5% this year to $159 billion while Publishing ad sales will drop -4% to $44bn. Audio Media ad revenues will be stable (-0.5% to $28bn). The only traditional media categories to grow will be Out-of-Home, up +5% to reach $31 billion (catching up with pre-COVID market size), cinema (up 23% to $2 billion).
  6. Meanwhile, digital pure-play advertising sales will grow by +8.5% to reach $577 billion dollars i.e., 69% of total ad sales, driven by organic growth factors (ecommerce, retail media, media consumption shifts, stabilization in the data landscape). Search/commerce formats remain the largest ad formats, approaching the $300bn milestone (+9.1% to $296 billion). Social media formats re-accelerate by +9.4% to $172 billion, while short-form pure-play video advertising grows by +8.6% to $71 billion.
  7. Retail Media Networks are expected to generate $121 billion in advertising sales this year (+12%), most of it in the form of product search and ecommerce sponsorship. The bulk of these ad sales will come from ecommerce pure players, but traditional retailers are developing their media capabilities and their advertising sales will grow by +24% to reach $21 billion.
  8. The strongest ad growth rate this year will come once again from India (+12.3% to $12.6bn); India is the 11th largest market. The Chinese ad market is set to recover faster than previously expected (+8.4%). At the other end of the spectrum, most Western European markets will stagnate this year: Germany, France, Italy all below +3% growth all-media, and negative for traditional media owners.
  9. In the US, media owners advertising revenues will increase by just +2.5% to $333 billion this year (cross-platform video -8%, Audio -2%, Publishing -6%, OOH +3%, Search/Commerce +10%, Social +8%, Direct Mail -7%). Ad spend stagnated in 4Q22 and 1Q23 but will likely accelerate as comps become much easier in the second half of the year.
  10. In 2024, economic stabilization and the return of major cyclical events (US presidential elections, Paris Olympics, Euro Football championship) will re-accelerate ad spend: +6.1% to $892 billion globally, +7.3% in the US. Traditional media owners’ ad revenues will recover by +1% while digital pure players ad sales will increase by +8%.

Vincent Létang, EVP, Global Market Research at MAGNA, and author of the report, said:
Advertising spending slowed down to a halt in the first quarter of 2023 (+1.5% globally, flat in most Western markets) due to economic uncertainty and the lack of cyclical drivers. There are, however, some drivers mitigating the impact of economic slowdown: Ecommerce and Retail Media bringing more marketing dollars into digital advertising formats, and the counter-cyclical dynamic of some large industry verticals (Retail, Auto, Travel). On balance, MAGNA expects the global marketplace to keep growing this year, as it managed to do during the brutal COVID recession of 2020. But of course – like in 2020 – traditional media formats and mature markets will struggle this year. Innovation keeps the market moving, however: traditional media owners are developing cross-platform capabilities and brand-safe addressable solutions that are increasingly attractive to brands, and now account for 19% of their advertising revenues.

MEDIA FORMATS
TV STRUGGLES, OOH RECOVERS, SOCIAL RE-ACCELERATES, RETAIL MEDIA TAKES OFF

Traditional, editorial media companies and branding formats (Television, Audio, Publishing, OOH, Cinema) are typically more vulnerable in economic downturns and uncertain business climates, when brands are tempted to reduce marketing budgets or prioritize performance-based digital ad formats over high-funnel branding channels. In that environment, the advertising revenues of traditional media owners will shrink by -3% this year, to $264 billion (31% of total ad sales).

Television advertising revenues (cross-platform long-form video ad sales) will shrink by -5% this year to $159 billion. Television broadcasters are hit by continued erosion in live linear viewing and rating supply (averaging
-10% in 2022), a slowdown in pricing conditions (CPM inflation set to average +8% vs. +13% in 2022) and a lack of cyclical events following the record cyclical spending of 2022 (FIFA World Cup, US & Brazilian Elections). Their “digital” non-conventional ad sales (e.g., addressable linear campaigns and AVOD pre-rolls on connected TVs) keep growing, however. In 2022 they accounted for an average 12% of total advertising revenues for broadcasters in top markets (US and UK around 15%, Germany 9%, France 7%, Japan 2%). Broadcasters’ non-linear revenues grew by +10% to +20% across key markets last year but they are slowing down in first half of 2023, and in any case the scale does not compensate for the erosion of linear ad sales (for now).

Elsewhere cross-platform print publisher ad sales will drop -4% to $44bn. Audio Media ad revenues will be stable, as digital audio growth offsets the erosion of radio ad sales (-0.5% to $28bn). The only traditional media categories to grow in 2023 will be Out-of-Home, up +5% to $31.3 billion, thus catching up with pre-COVID market size. Cinema advertising will continue its post-COVID recovery, up +23% to $2 billion, but the market remains 30% below the pre-COVID levels.

Meanwhile, digital pure-play advertising sales will grow by +8.5% to reach $577 billion dollars i.e., 69% of total ad sales, driven by organic growth factors (ecommerce, retail media, media consumption shifts, stabilization in the data landscape).

Search/commerce will remain the largest ad format, approaching the $300bn milestone (+9.1% to $296 billion). Within Search/Commerce, Commerce/Retail players will grow ad sales by 12% this year (to $121 billion) i.e., faster than traditional Search Engine companies like Google or Baidu. Within Commerce/Retail players, ecommerce specialists like Amazon or Alibaba are by far the most developed (83% of the segment) but traditional retail chains like Walmart or Carrefour are leveraging first-party consumer data to attract CPG brands into spending on their retail media networks or third-party media partners. Traditional retailers will grow Search-like ad revenues by +24% this year to $21 billion.

Social media formats will re-accelerate by +9.4% this year reach to $172 billion. The industry seems to have turned a corner in 1Q23 when Meta reported a return to YOY growth on an FX-adjusted basis after two consecutive quarters of flat or negative growth. Meta and other established social media vendors seem to have finally recovered from the loss of workable consumer data in the Apple ecosystem since late 2021, and they are making inroads in the monetization of the short vertical videos that have completely changed the user experience, challenging ad optimization, in less than two years. Finally pure-play short form digital video (instream platforms like YouTube or Twitch, plus outstream networks) will grow ad sales by +8.6% to $71 billion this year.

MARKETS

CHINA RECOVERS, EUROPE STRUGGLES, US HOLD, INDIA CRUISES

After record post-COVID growth in 2021 (+23%), ad spend started to slow down in the second half of 2022, and it was almost flat in the first quarter of 2023 (+1%) but it was against very strong first quarter growth in 2022. As comps gets much easier to match in the second half, MAGNA believes quarterly growth rate will improve to provide a full-year market growth +4.6%. Around that average, however, MAGNA anticipates a wide range of performances depending local economic performance and market maturity.

North America and European markets will underperform this year (ad market growth of +2.5% and +4.2% resp.), due to weaker economic activity (+1.6% and +0.8% real GDP growth, resp), mature media/marketing landscapes, and a lack of major cyclical driver compared to 2022. APAC (+7.1%) and Latin America (+8.7%) will grow significantly faster.

The strongest ad market growth rate this year will come, once again, from India (+12%). India becomes the largest nation on earth this year in terms of population, edging China, and is the 11th largest advertising market globally. The Indian market is still under-developed, as ad spend per capita stands at a mere $9 per year compared to $106 in China and $1,000 in the US. With economic development, media access and the rise of a huge middle, India is bound to crash the top 10 club within three years.

Meanwhile, the Chinese ad market recovers faster than originally expected, after stalling in 2022, following the repeal of the “zero COVID” policy towards the end of last year. IMF raised the China GDP growth forecast from +3.2% to +5.2%, and ad spend already grew by +6% YOY in the first quarter. MAGNA raises its full-year growth forecast to +8.4%. At the other end of the spectrum, most of Western Europe will stagnate (between 0% and 3% growth) (disproportionately hit by global economic slowdown and inflation) under +2% all-media, negative for traditional media).

In the US, media owners advertising revenues will increase by just +2.5% to $333 billion this year (cross-platform video -8%, Audio -2%, Publishing -6%, OOH +3%, Search/Commerce +10%, Social +8%, Direct Mail -7%). Ad spend stagnated in 4Q22 and 1Q23 but will likely accelerate as comps become much easier in the second half of the year, to reach +2.5% for the year, or +4.2% for non-cyclical ad spend (excluding political and Olympic spending).

Elsewhere MAGNA expects moderate market growth in Australia (+4.1%) and the UK (+4.6%), and little or no growth in France (+2.8%) Japan (+2.6%) and Germany (+1.5%).

Looking at 2024, economic stabilization, lower inflation, and the return of major cyclical events (US presidential elections, Paris Olympics, Euro Football championship) will re-accelerate ad spend: +6.1% to $892 billion globally. It will help the mature markets of North America and Europe in particular (US and France +7%, UK +6%) while Asian market will continue to grow strongly (India +12.5%, China +6%).

INDUSTRY VERTICALS

THE AUTO COMEBACK, THE RETAIL WAR, THE CPG DILEMMA

During economic downturns, big-ticket and/or discretionary goods and services are typically struggling while essential services and goods (health, utility, insurance, food) are less impacted. The current downturn is different and more complex for three reasons. High inflation, especially on food and drink products, is a new challenge on CPG brands and food retailers. Second, unemployment remains low so far in this downturn, which keeps

consumption of big-ticket items strong. Third, two big discretionary verticals happen to be recovering from the COVID and supply chain crises later than others, and currently experience the business cycle opposite to most other industries: Travel and Automotive.

Vacations and new cars are big, discretionary expenses that could be easily discarded or postponed by consumers when confidence is low and interest rates are high, but millions of families have already postponed vacations, or the renewal of their family car, sometimes for years, so now that there are no more physical obstacles to their plans, consumers are back in the market. As a result, we are seeing these two highly competitive industries growing marketing spending by more than +10% in most markets so far this year.

Many verticals experience struggling sales and show stagnating or declining marketing spending, just as previously expected: Tech/Telecoms, Finance (except in some markets like Germany where high interest rates are reviving competition between investment and saving products), Restaurants. On the other hand, some industry verticals prove more dynamic than originally expected. Grocery retailers, for instance, are ramping up ad campaigns in markets like Germany, France, and the UK, in a fierce battle for share of voice. Competition is being spurred by the realization that inflation-wary consumers are shopping around every weekend for the best deals, moving away from any pre-inflation loyalty to specific retail chains. One large vertical is showing a disappointing momentum so far this year: Entertainment. With moviegoers returning and streaming going mainstream, MAGNA was expecting the blockbuster releases and streaming competition to flare this year. But movie studios and streaming platforms have been relatively quiet in the first few months. MAGNA still expects the entertainment brands to resume the fight for market share at some point in 2023 or 2024, in the wake of re-brandings (e.g., “Max”), and the launch of new ad-supported tiers (Netflix, Disney+, possibly Prime or Apple).

Betting was the fastest-growing vertical in the last five years, due to regulatory relaxation on sports betting in several markets (US, Canada, Netherlands), a global consolidation in the industry, and fierce competition for leadership in betting apps. The regulatory pendulum has already shifted in one market (the Netherlands) and several other governments may be looking at the social impact of high-frequency betting, which may lead betting brands to consider pre-emptive self-regulation and moderate advertising activity. The lack of a major cyclical sports event in 2023, after the FIFA World Cup 2022, will also slow down the growth of the betting industry.

CPG/FMCG brands behave differently in response to the new challenge and dilemma posed by inflation. Rather than fighting against the down-trading behavior of many consumers through traditional brand campaigns, many brands are instead ramping up their performance spending with Search and Retail Media Networks, as ecommerce sales keep growing for food, drinks, household goods and personal care (from almost nothing pre-COVID). This pivot in CPG marketing comes partly at the expense of traditional branding media (typically: television), but it is mostly funded by reallocating bits of the hundreds of billions of dollars in trade marketing deals between brands and retailers into retailer-controlled media networks (typically: sponsored product search results). CPG brands are thus not really cutting their advertising spending, in fact they are probably growing total ad budgets, but linear media and television budgets are, in many cases, de-prioritized for the time being. But again, CPG brands display a range of strategies across markets, and Food or Drink verticals are actually up in some markets where inflation is slowing down.

AD SPENDING DYNAMIC ACROSS KEY INDUSTRY VERTICALS (2023)

MEDIA OWNERS

CONCENTRATION PAUSES AMONG TOP VENDORS

MAGNA’s analysis of the financial reports of the world’s largest media owners confirm that the level of concentration in the supply side remains high, but the market is more competitive than one or two years ago, thanks to the emergence of challengers in various segments and regions.

The three largest media owners in 2022 (Google, Meta, and Alibaba) captured 47% of global ad spend (across all media and all markets) down from 49% in 2021. That’s because the growth of the top three slowed down to just +4% in 2022 while challengers grew much faster than the Big Three last year in both the Western world (Amazon +21%, Apple +37%) and China (Bytedance/Tiktok +40%, Pinduoduo +42%).

The 20 largest advertising vendors combined captured 72% of the global advertising dollars, which means every other media owner outside the top 20 shared 28% of the world’s advertising spending, compared to 27% in 2021. It’s too early to be sure whether the trend towards globalization and concentration in digital advertising is pausing temporarily, after the tremendous COVID-induced acceleration, or if the market will continue to become more competitive. The first quarter of 2023 suggests the rebalancing continues, with underwhelming growth from the largest vendors and expansion of “small giants”.

Other key finding: the top 20 lists of advertising vendors now includes four ecommerce companies (Alibaba, Amazon, JD.com, Pinduoduo), ten digital media companies (Google, Meta, Apple, Microsoft, Bytedance, Tencent, Baidu, Kuaishou, Twitter, Snap) and just six traditional media companies (Comcast NBCU, Disney, Paramount, Warner Discovery, Fox, and RTL).

KEY FIGURES

TABLE 1: US AD MARKET

Source: MAGNA Global Ad Forecasts, June 2023. Cross-platform, net media owner advertising revenues in billion dollars. By default includes cyclical ad sales (elections, cyclical sports events). PREV: March 2023.

TABLE 2: TOP MARKETS

Source: MAGNA Global Ad Forecasts, June 2023. Media owners net advertising revenues in constant billion dollars. PREV= Previous Global MAGNA update (Dec. 2022)

TABLE 3: GLOBAL AD MARKET

Source: MAGNA Global Ad Forecasts, June 2023. Media owners’ net advertising revenues in billions of constant US dollars. “Traditional Media Owners” include the cross-platform ad revenues of traditional media companies (TV and radio broadcasters, publishers, OOH). “Digital Pure Player” includes the ad sales of digital vendors in search, retail media, social and short-form video. PREV= Previous Global MAGNA forecast (Dec. 2022)

ABOUT THE RESEARCH

The MAGNA market research is media centric. It estimates net media owners advertising revenues based on an analysis of financial reports and data from local trade organizations; other ad market studies are based on tracking ad insertions or consolidating agency billings. The MAGNA approach provides the most accurate and comprehensive picture of the market as it captures total net media owners’ ad revenues coming from national consumer brands’ spending as well as small, local, “direct” advertisers. Forecasts are based on economic outlook and market shares dynamic. The full Ad Forecast report (80 pages) and dataset contains more granular media breakdowns and forecasts to 2027, for 70 markets.

Next Global Forecast: December 2023 – Next US Forecast: September 2023.

ABOUT MAGNA

MAGNA is the leading global media investment and intelligence company. Our trusted insights, proprietary trials offerings, industry-leading negotiation and unparalleled consultative solutions deliver an actionable marketplace advantage for our clients and subscribers.

We are a team of experts driven by results, integrity, and inquisitiveness. We operate across five key competencies, supporting clients and cross-functional teams through partnership, education, accountability, connectivity, and enablement. For more information, please visit our website: https://www-wp-stage.magnaglobal.com/and follow us on LinkedIn.

MAGNA has set the industry standard for more than 60 years by predicting the future of media value. We publish more than 40 reports per year on audience trends, media spend and market demand as well as ad effectiveness.

To access full reports and databases or to learn more about our market research services, contact [email protected].

Study Uncovers New Clues About The Connection Between An Ad’s Context And Its Performance.

Published on Inside Radio

The idea may sound simple. “Ads in context just work better,” says Idil Cakim, Senior VP Research & Insights at Audacy. But the benefits of the when and where of audio advertising have become clearer, thanks to a new study by Magna Global and Audacy. It examined how messages are delivered in listeners’ daily rituals and found that when audio ads are put in the context of the listener’s life, they have a bigger impact on purchase behavior.

Kara Manatt, Executive VP/Managing Director of Intelligence Solutions at Magna, said the study shows contextual ads work in audio just as they do in other media. Not only do they reach people who are more likely to be in the market for the advertised product, but she says they also penetrate deeper into the consumer mindset.

“The real powerhouse behind contextual, based on all the research we’ve done, is reaching people at that exact right moment,” Manatt said Thursday during a presentation of the study. “With respect to audio, it’s the soundtrack of people’s day. Unlike video where people may be going online to do a specific task, audio is more consistent. And I think it opens up the doors with lots of different creative ways that brands can actually get contextual with audio because of that.”

In the study, first reported by Inside Radio earlier this month, 74% of listeners said they incorporated audio into their daily rituals and 40% planned their day/activities around audio content. The result was listeners had a 12% increase in feeling connected to the brand when the ad was tied into their daily rituals. That compared to a three percent increase for non-aligned ads.

Britni Sternquist, Senior Group Director at Initiative, sees the results as proof of the relationship between relevance and influence.

“The thing I’m most excited about is what’s going on with podcasting, because it’s grown so much, and we have the ability to really customize the message to the moment to really drive that influence and relevance to whatever mindset listeners are in,” she said. “It can be really impactful for advertisers to show up in a way that makes them feel like a friend or support system.”

To test the two methods of targeting, Magna’s Media Trials unit recruited 1,920 weekly audio listeners, both radio and podcast. Working with Audacy, Magna tested both genre-based ads—such as a telecom brand advertising during an entertainment broadcast—and ritual-based ads—such as destination advertising during a “me-time” ritual – to examine the spectrum of contextual-alignment opportunities.

Manatt says the results were “glaringly clear” that there was a “significant improvement” when consumers were exposed to an in-context ad. She credits that to the context making the brand more relevant to a consumer. “Because you’re reaching people in the right moment, it actually generates excitement for the brand – and that’s what every brand wants,” Manatt said.

Magna spends billions each year on advertising and while research like this has been done with video, Manatt says the study fills a “huge, obvious void” with audio. And while media buyers have no control over the creative, she said placement gives them a way to impact how a brand is perceived.

“It is amplifying the effectiveness of the same exact ad,” Manatt said. “People are going to notice more and the ad is going to be stickier.”

To translate the findings into practice, Sternquist thinks advertisers need to alter how they are planning their buys and put their resources behind generating the right types of creative to support contextual moments. “It’s approaching planning from a consumer journey standpoint, looking at their daily habits and rituals, getting that granular detail about what they’re doing, and why they’re doing it,” she said. “That can help advertisers be more successful in how they approach contextual advertising.”

To help advertisers, Cakim said Audacy has developed a tool that combines first-party listener data with ritual data to pinpoint – based on audience groups and rituals – what stations they’re listening to and what podcasts they prefer.

“The strength of that match is important,” Sternquist said. “We’ve seen this in every study – the stronger correlation between the ad and the genre or ritual, the stronger their performance.”

Working in audio’s favor, said Sternquist, is that there is now more of a focus on providing buyers with the data they need. “The audio industry, to continue to evolve and have better measurement and stronger attribution data about our performance against our key segments. That is going to be critical,” she said. “Obviously, we all love video. But audio is so incredibly immersive. And I think audio is going to be a place that brands are incredibly focused over the next five to 10 years when this innovation lends itself to new ideas.”

Read the Full Study

 

Read the Article on Inside Radio

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NEW MAGNA x VOX MEDIA STUDY REVEALS THAT PODCASTERS ARE NOW MORE INFLUENTIAL THAN TRADITIONAL INFLUENCERS

New York – May 10th, 2023 – The growing popularity of podcasts is an indicator of the changing landscape of media entertainment, as more people are tuning in regularly to listen to their favorite podcasters. In turn, podcasters are becoming deeply entrenched in the cultural zeitgeist. MAGNA’s Media Trials unit joined forces with Vox Media to explore this emerging phenomenon; in particular, what is it about podcasts that resonates with people and how.

The research paper, A New Era of Influence: Podcasters’ Emergence as One of Today’s Most Influential Figures in Media looks at the nuances of the podcast media format and the unique connection between podcasters and listeners. In addition, the study outlines best practices for brands interested in advertising on the media format.

A New Era of Influence reveals that podcasters are so influential in the lives of their listeners, that 75% of listeners say they value podcasters’ influence more than they value the influence of social media influencers (15%) and TV/movie celebrities (10%) – meaning that podcasters have effectively de-throned the original influencers. Further, 75% of listeners say that podcasts serve as their primary source of information on topics in which they are most passionate and is highest among Millennials (86%). This is likely because podcasts fill a void that other media formats simply cannot. For example, podcasts offer more in-depth information (50%) and exposure to current topics and conversations (48%), compared to other media formats (e.g., social media and popular video apps).

In today’s landscape, people are forming new relationships with media as their expectations have changed.  For many, media can serve as a mechanism for satisfying the desire for personal fulfillment (72%). This is especially true among Adult Gen Z (70%) and Millennials (80%), who now desire achieving personal fulfillment over connecting with others.

“By its nature, listening to podcasts is one of the more intimate media experiences and it stands to reason that people will form strong attachments with their favorite hosts, but we were surprised at the deep level of connection and trust that listeners feel for their favorite hosts,” said Edwin Wong, SVP for Insights and Innovation at Vox Media. “That podcasters have more clout than social media influencers and mainstream celebrities leads to a paradigm shift in thinking about who is the best endorser for properly aligned brands.”

This unparalleled level of intimacy and influence translates directly to a more memorable and effective ad experience. Over two in three listeners say they pay more attention to podcast ads than ads they come across elsewhere (e.g. TV, social media, etc.). Across genres, podcast ads are perceived as highly effective in both generating brand awareness and driving purchase intent.  Podcasts represent an ideal environment for brands to share thoughtful brand messaging as listeners are highly receptive to detailed information while listening.

Podcasters’ influence extends to advertising and purchase decisions, especially among Millennials, 70% of whom say they have been persuaded to purchase by a podcast ad. Beyond driving purchases, podcast ads are highly effective in introducing new products or services to listeners (77%). Although podcasts present fewer barriers to purchase compared to other media formats (e.g., social media, television), there are still many opportunities for brands to improve the purchase experience for listeners.

“Advertisers have a great opportunity to forge close relationships with consumers by joining forces with a podcaster whose content, personality and point-of-view align with the audiences they are trying to reach,” said Kara Manatt, EVP, Managing Director, Intelligence Solutions, MAGNA. “Often, barriers to purchase are lower than other media formats and there are opportunities to catch a rising media personality at the start and be a part of a dynamic sponsor/host/consumer bond.”

A New Era of Influence Takeaways:

Podcasts content is uniquely trusted information. When people listen to podcasts, they aren’t just getting any content – they’re getting content that they deeply trust. Most listeners agree that the content they receive from podcasts is superior to the content they receive on social media (79%). This inherent trust can have an uplifting ripple effect across other content associated with the podcast, such as podcast ads.

Podcasts deliver on the desire for self-fulfillment. Aside from its practical use in disseminating information, podcasts are helping listeners achieve their inner desires. As such, 79% of listeners agree that listening to podcasts motivates them to be better versions of themselves. Therefore, podcasts effectively carry listeners through the trajectory of ideation through actualization.

Listening to podcasts enables smarter decision-making. Listening to podcasts is more than just a pastime, it’s a way to help listeners in their decision-making in nearly every facet in their lives. Most listeners agree that listening to podcasts have helped them make smarter decisions (77%), and more often than not turn to this format over social media for help when making these decisions.

Brands should not shy away from sharing descriptive information. While listeners are tuned in and in a receptive mindset, this is a prime opportunity for brands to share strong brand propositions and/or details. In fact, the description of the product/service is the #1 driver of purchases among listeners (Indexed at 124).

As part of this study, MAGNA conducted focus groups with individuals across the United States, as well as surveyed 2,028 people online, with geographic and demographic diversity for the report.

The full study may be found here.

About MAGNA

MAGNA is the leading global media investment and intelligence company. Our trusted insights, proprietary trials offerings, industry-leading negotiation and unparalleled consultative solutions deliver an actionable marketplace advantage for our clients and subscribers.

We are a team of experts driven by results, integrity and inquisitiveness. We operate across five key competencies, supporting clients and cross-functional teams through partnership, education, accountability, connectivity and enablement. For more information, please visit our website: https://www-wp-stage.magnaglobal.com/ and follow us on LinkedIn.

About Vox Media

Vox Media is the leading modern media company, reaching audiences everywhere they are. Known for editorial properties including Vox, SB Nation, New York Magazine, The Dodo, and Eater, the company’s portfolio features the most relevant, respected, and engaging editorial properties and voices. The company is also home to award-winning storytelling businesses such as Vox Media Studios and the Vox Media Podcast Network, as well as innovative technologies that support the entire media industry, including the Concert advertising marketplace. Vox Media proves that quality can scale.

Media Contact:
Elaine Underwood
Content Director, Global Corporate Communications
Mediabrands
[email protected]
(201) 306-6062