Luxe Brands Expected to Spur an Audio Ad 'Gold Rush' in 2021 at The New York Times

The New York Times isn’t short on ambition when it comes to audio advertising. In the last six months, it's scooped up heavy-hitting media talent like Ezra Klein and Kara Swisher to front shows, reportedly paid about $25 million for This American Life publisher Serial Productions, and launched new and returning shows like popular franchise Modern Love, bringing its podcast portfolio to 17. These hefty moves make sense when you consider audio is advertising’s fastest-growing revenue stream, according to the publisher, though it declined to break out specific figures. In a year when the second quarter saw drops of 50% year-over-year in ad revenue, it’s no wonder the publisher is steering into tailwinds. Now, the Times anticipates more growth in 2021 thanks to signing up luxury clients that have previously been hesitant to try a new format associated with startups and direct-to-consumer brands. As such, “2021 is going to be a gold rush for The New York Times and audio," said Sebastian Tomich, svp and global head of advertising and marketing solutions at the Times. "There is this perfect moment where marketers will be spending again. It’s a new medium and a new audience.” Changing perceptions of audio As with all ad formats, 2020 has been a bumpy ride for audio: Podcast listening cratered as fewer people plugged in during a commute. Bucking that trend, the Times’ news-based show The Daily doubled its daily average downloads from 2 million to 4 million since 2019, according to the publisher. Podcast advertising has long been popular with DTC brands and performance marketers. Over recent years, as brand-objective measurements have matured, more blue-chip marquee advertisers like auto brands—and now luxury brands—have joined the fray. “For luxe clients, audio is about audience, exclusivity and newness,” said svp of media Lisa Howard, adding that luxury brands don’t typically want to advertise on radio or be in the same company as DTC brands (despite many having to set up their own DTC operations during the pandemic). Podcasting’s Greatest Asset Is the ‘Powerful, Intimate Connection’ With Listeners, Says Guy Raz This year, the Times booked audio campaigns with 226 brands. Four of them—Beautycounter, Chanel, De Beers Jewelers, The RealReal—are in the luxury category. Howard said conversations are ongoing with at least three others. Chanel, which is sponsoring the relaunch of Modern Love, has been an audio ad client since 2018. “[Luxury brands] love the contextual aspect," said Howard, "we talk about Trump and tragedy and avoiding that [in other formats].” Audio and TV have similarities, she added. Contextual adjacency is more unique to print and digital, on TV and audio you sell the attention, advertisers don’t object to running during The Walking Dead or Game of Thrones. Part of the draw is the Times' audience of 4 million. Of that, the average age of The Daily listener is 33, while 70% of listeners are under 40 years old. Another plus for advertisers trying to reach audiences is that their median annual income is over $100,000, Howard said. Much has been written of the intimate nature of podcasts and how they hold peoples' attention. Another reason for their growing popularity with luxury clients is that podcast campaigns perform well for the Times, hitting all aspects of the marketing funnel with more focus on the lower end, hence its popularity with DTC brands like S’well, Rothy’s and DoorDash. According to aggregate data from the Times’ audio campaigns between 2017 and 2020, podcast ads increase brand consideration by 12%, compared with benchmarks, and increase intent to look up information about the brand by 23%. Audio campaigns also convert at a higher rate than industry benchmarks: Across 2020 attribution studies, conversions are up 0.94%. Next step: Getting measurement right Currently, the Times has three audio ad formats: sponsorship of new podcast series launches; rotation across one or multiple series; and what it calls NYT Audio Amplifier, which rotates ads across all New York Times podcasts. The most popular format is rotating through one or multiple series, especially for brands that have an idea of the audience they want to reach. Gaining in popularity is Audio Amplifier as marketers look for more efficient ways to reach the Times’ audience. According to GroupM’s media forecast, audio is expected to account for 4% of 2021's media share; for comparison, newspapers are expected to take 4.8% (excluding political advertising). “Digital audio, if you look at Spotify’s recent acquisitions this year, has done really well,” said Martin Galvin, GroupM’s trading director. “Rather than just riding out the pandemic, [digital audio] is thriving.” He did note that podcast measurement has its shortcomings, partly due to platforms not sharing data. Tying podcast listens to subscriber growth is still a mix of art and science. Previously, the Times pointed to 2018’s ISIS series Caliphate—recently found to fall short of the Times’ reporting standard—as driving conversions due to its early release for subscribers. But based on four years of data since The Daily premiered, CEO Meredith Kopit Levien said in an earnings call Nov. 5 that the Times has “every reason to believe” podcasts drive subscriptions.