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US digital audio advertising grew by 30% in first half of 2019


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Advertising-industry body the Internet Advertising Bureau (IAB) has published its mid-year report on digital ad revenues in the US. The big figure is $57.9bn: that’s how much money was spent on digital advertising in the US in the first half of 2019. That’s 17% growth year-on-year, and the highest ever first-half total for this category. Trebles all round in ad-land? Well, the downside is that the growth has decelerated: the first-half growth was 23% in both 2017 and 2018 according to the IAB.

Music Ally’s interest in the latest half-year report zeroes in on the figures for digital audio advertising: an area that’s relevant to Pandora, Spotify and other streaming services with free tiers. The IAB says that digital audio ad-spending in the US grew by 30% in the first half of 2019 to $1.2bn, although here, too, there was deceleration from the growth of 31% in the first half of 2018. Audio has grown from 1.9% of the total US digital advertising market to 2.1% over that period, so its share is still – in the IAB’s words – “insignificant”.

How does all this compare to the growth of the specific companies in our space? Spotify grew its ad-supported revenues by 29.3% (year-on-year) in the first half of 2019, but that’s globally, rather than the US focus of the IAB’s stats. Also bear in mind that ads only accounted for 9.2% of Spotify’s revenues in the first half of 2019. Pandora, meanwhile, grew its advertising revenues by 10% over the same period, and that *is* a US-only figure. Ads accounted for 66.6% of Pandora’s revenues in the first half of 2019.

Not all music-streaming services are audio-only, of course. What about video advertising in the US, given its importance to YouTube’s business? The IAB report claims that video ad-spend grew by 36% to $9.5bn in the US in the first half of 2019, and now accounts for 16.4% of total digital ads there. “Increasingly, advertisers are turning to social video stories and connected TV to reach a growing audience of ‘cord-nevers’ — a younger cohort who’ve never subscribed to cable television and cannot be reached via linear TV ads,” said Sue Hogan, the IAB’s SVP of research and analytics. Related: a study earlier this year suggested that there were now 31 million ‘cord-nevers’ in the US – 12% of the adult population.

Stuart Dredge

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