Pharma marketers are tuning in to audio's popularity, but there's still plenty of room to grow, experts say

Thanks to mobile devices, smart speakers like Alexa and the surging popularity of podcasts and music streaming, audio is making a comeback—and pharma marketers are starting to put their money where consumers’ ears are.

When Veeva Crossix released its "2022 Trends in Health Advertising" report in May, it documented a large jump in audio marketing among health brands, including pharma. 

The report found a 50% increase in the number of campaigns using digital audio for their messaging in 2021, compared to the previous year, particularly from brands relating to women’s health and prevention. That includes both investments in streaming audio channels and audio inventory purchased programmatically. Overall, impressions from digital audio ads rose 61%, according to the report, and conversion-to-brand rates stemming from audio rose 11%.

Although TV and digital ads still reign supreme and audio's share of the total ad impression mix is small—just 1% compared to 80% for digital display—pharma’s interest in audio is surging as consumer habits change, according to Sarah Caldwell, general manager of Veeva Crossix Analytics.

The growth is part of a larger shift by pharma to diversify its media mix, said Caldwell. "The pandemic changed the way people consumed media and now you are seeing that brands are meeting consumers where they are,” she explained. 

Today, "where they are" is very likely to be on an audio channel. A report released in March by Edison Research, which tracks the audio industry, found that 73% of Americans had listened to online audio within the past month, up from 61% in 2017 and just 39% a decade ago.  

Audio streaming had already been on an upward trajectory, but it exploded during the pandemic as people grew weary of screens after endless Zoom calls and hours of Netflix binges, and as many turned to music or podcasts to break the silence as they worked from home.

That has created significant opportunity for pharma brands looking to grow their audience, said Mark Pappas, senior vice president of innovation at CMI Media Group. He said consumers are taking audio content with them as they go about their day, popping in earbuds for their grocery errands or morning walks.

“Every car manufacturer now has features like Apple CarPlay and Android Auto, so whatever your streaming platform choice is – it’s also what you’re listening to in your car as well,” Pappas said. "You have the opportunity to reach people anywhere they are at any time of day across a variety of devices.”

Lee Ann Longinotti, who heads the pharma and healthcare verticals for SXM Media, which includes Pandora, SoundCloud, Stitcher and SiriusXM satellite radio, said her company has been seeing “enormous” year-over-year growth in pharma ads, mostly on its Pandora music streaming platform, as more companies are recognizing the platform's ability to target niche audiences at scale. The company is also seeing “very nice growth” in podcasts, although pharma is wading into that space more cautiously, she said.

Rahul Sabnis, chief creative officer for iHeartMedia, agreed that the latest Veeva stats on audio growth “100% aligns with everything we’re seeing.” 

“Pharma advertising, especially DTC, has been absolutely blowing up,” he said, calling it the fastest-growing segment of the business aside from podcasts. 

Likewise, Pappas said that over the last year or so he’s given a presentation on audio “to probably every single brand team at CMI. It reminds me of when digital video first became a thing. Now every client wants to know about audio, social audio and getting into the sonic branding aspect,” he said.

Still there’s a chasm between interest and action, as the Veeva report highlights. 

“There’s so much opportunity but then there’s this huge disconnect where it’s the tiniest of the tiny little slices of where the impressions are right now,” said Pappas. Sabnis estimates that only about 15% of pharma brands have gone “all in” on audio. 

One of the biggest challenges for pharma is the lack of creative assets to fully embrace the opportunities, Pappas and Sabnis said. It’s not as simple as just taking a TV ad and retrofitting it for the audio space—audio ads are naturally more conversational, said Sabnis.

“That’s one of the reasons why pharma companies are waking up to it,” said Sabnis. “They’re recognizing that they can have a conversation [with patients] in ways that they can’t with TV or video. It’s a different style.”

Since the space is so new, many creative agencies are currently unable to do audio, so streaming partners like iHeart have lent their own internal creative teams to work with agencies to develop the assets. That takes longer for pharma because of the industry's regulatory constraints, of course, but Sabnis says audio ads actually require a shorter lead time than video. 

"There's a thing that I coined here at iHeart called the one-tenth rule. Audio takes one-tenth of the time and one-tenth of the cost of video to produce," he said. "So you basically have almost all the agility of social media and digital with the humanity of voice. That means you can do things in faster cycles." 

To truly leverage audio opportunities, CMI's Pappas said pharma needs to stop treating audio as an afterthought. For his part, he has been working with a lot of pharma brands on “sonic branding”—creating an audio logo of sorts so a listener can instantly recognize the product or brand without a visual. 

“Brands really need to start treating audio as equal to anything visual that they’re doing,” he said. “It needs to be a core piece of their creative planning.”

While experts expect pharma's investment in digital audio will continue to grow, Veeva's Caldwell sees it as complementing rather than overtaking more traditional pharma ad formats, such as commercials on linear TV.

Now that the industry is becoming more data-driven, she said, there's no such thing as a one-size-fits-all campaign. She considers audio one of many levers that advertisers can pull, depending on their campaign's specific needs.

"It used to be when you think about a media plan, it was Linear TV, endemic ads and some lifestyle publications. Every media plan looked the same," she said. "Now we're seeing that it's much more tailored to the specific brand and where that brand fits into the market."

Editor's note: This story was updated to show that audio's share of ad impressions is 1%, rather than its share of ad spending.