February 8, 2023
2023 presents an uncertain economic environment. A year of inflation and higher interest rates has made consumers and marketers tighten their budgets. 31% of U.S. adults are preparing for a recession, while another 50% are not but wish they could. As a result, many brands are cutting ad budgets or delaying campaigns as they reevaluate their marketing strategies. eMarketer recently projected that digital ad revenue will be down $5.51 billion dollars from the previous year, a sign of marketing being deprioritized.
While cutting advertising budgets may seem prudent in the short term, it could lead to a long-term loss in sales and customers to your competitors. One study found that brands who cut all their marketing spend in year one of a recession take up to five years to catch up with those that maintain spend.
There is also a long history of brands increasing their advertising during a recession and gaining customers and market share as a result. In the 1990-1991 recession, McDonald’s, the leading fast-food chain, cut their advertising since they were secure in the top spot. The result? Sales dropped 28%. At the same time, Taco Bell and Pizza Hut saw an opportunity to gain new customers and increased their ad spend. Pizza Hut’s sales increased by 61%, and Taco Bell’s increased 40%.
Even globally-recognized brands like McDonald’s risk losing shares to competitors by cutting back on advertising.
Tighter budgets and financial concerns mean that businesses need cost-effective marketing solutions that provideROI and deliver results efficiently. Podcast advertising provides both, driving 34% brand lift, compared with an average of 2.6% lift across non-podcast channels (Claritas Conversion Lift Study).
This effectiveness also comes at a lower cost than some other audio mediums. Advertisers spent an average of $13.70 per podcast listener year, which is roughly a quarter of the $52.10 they spend per commercial radio listener. While radio has its merits as a mass reach advertising medium, podcasting can help marketers use premium audio to connect with consumers without breaking the budget.
Podcast listeners are highly engaged, influential and more likely to act on ad messages, which increases ROI. One study found that of 10 tested mediums, podcasting was the one where consumers were least likely to avoid ads—placing your message on podcasts means that listeners will hear it. Furthermore, podcast listeners are 25% more likely than average to tell their friends about new products. In short, podcast advertising delivers – ensuring that brand messages are heard by engaged, influential listeners in a cost-effective way.
In an uncertain economic environment, it’s essential for marketers to connect with an audience that is financially resilient and more likely to be engaged with the advertising. Listeners of the shows that Soundrise represents are secure professionally (67% have established careers) and financially (47% have a household income higher than $75K a year). The audience is dedicated to their favorite shows—90% listen to the whole episode, and 32% never miss an episode (2020 PRX Listener Survey).
Leveraging a partner that has experience forming effective relationships between marketers and podcasts will help you make the most of your investment. Working with the Soundrise team allows you to seize the opportunity to reach financially resilient, influential, and engaged consumers in an innovative and cost-effective way.