Cashing In
Podcast Ad Revenue on Track to Hit $1B
It won’t be long until we’re able to say that podcasting is a billion dollar industry. The IAB and PwC released the findings from the third-annual FY 2018 Podcast Ad Revenue Study, and podcasting is on track to hit $1 billion by 2021, and that’s just here in the U.S. A study from WARC predicts the global market will comprise 4.5% of all audio ad spend by 2022, up from 1.9% in 2018.
The future looks bright, but the present isn’t looking too shabby either. U.S. spending on podcast ads grew a healthy 53% in 2018 to $479.1 million. This milestone, combined with the steady growth in listening and the recent acquisitions made by major media companies, signals that the medium is maturing. It’s maturing enough to capture the attention of bigger brands with a customer base that’s becoming more and more difficult to engage. Podcast ads have proven to deliver results for all kinds of advertisers, opening the door for more to jump in. Seeing dollar signs yet?
Everyone wants to make a living off of their podcast, but not everyone has celebrity status or the backing of a major publisher. Can you still cash in on this growth in ad revenue, even as an independent creator? Podcasters like you depend on sponsorships more than anyone else to keep your show going. Here are the biggest trends and the opportunities that are changing how podcasters approach monetization.
Brands on board
There’s life beyond the Casper’s and Squarespace’s of the world. (No offense — we all love a good mattress or website builder.) 74% of the 2018 ad revenue originated from five categories — direct-to-consumer retailers (22% of total ad spend), financial services (21%), business-to-business (14%), arts and entertainment (10%) and telecommunications (7%). Categories that complement the podcast genres bought the most — news, comedy, business, education, and entertainment. Travel and healthcare are also up-and-coming advertisers, growing 100% and 228%, respectively.
Brand awareness campaigns — using ads that don’t rely on a promo code or vanity URL to track performance — have gained in popularity among advertisers the past few years. They now account for nearly one in four podcast campaigns, growing the most year-over-year as direct response ads fell from 64% to 52%.
This new wave of advertisers has different expectations and different goals. Learn how to accommodate sponsors with a variety of goals, such as brand recall (the ability of the consumer to correctly elicit a brand name from memory) and intent to buy. Think of ways to use your entire platform (newsletter, website, and social) to help them stay top of mind with your listeners, or share your experience with a brand by using a personal story in your reads.
As brands experiment with different types of ads, you can too. Make sponsorships an experience for your listeners — one they won’t forget. That will keep your listeners engaged and keep advertisers on board as you deliver tangible results for their product.
Special delivery
Advertisers have more options for delivering their message in podcasting than before, so what decisions are they making today? Host reads are still king, making them 63% of the podcast ads delivered in 2018. While marginally growing in share, pre-produced ads represent 35% of podcast ads in 2018 and programmatic (ads placed via an automated bidding system) is just 1.3%.
Advertisers’ preference for ads read by the host is a trend we see continuing because of the deeper connection they make with the audience. Your voice remains a powerful asset for sponsors and you don’t have to sacrifice show quality.
Dynamically inserted ads made up 48.8% of podcast ads sold in 2018, up from 41.7% a year earlier. While baked in ads hold the majority for ads delivered, DI’s ability to target specific consumer segments is appealing for brands, hence the upward trend.
Podcasters benefit too from advertisers’ growing interest in dynamic ad insertion. Past episodes, not just future, can be monetized to maximize revenue. Ads read in your voice can also be dynamically inserted and easily swapped to prevent ad fatigue. In other words, they will sound natural and your listeners won’t get sick of hearing the same messaging over again.
For more on the booming business of podcast ads, get the full IAB report here.
