At the same time when advertising across many sectors is slowing, podcast and audio investments might remain strong within the next year.
The audio business is growing on platforms, from live streams to exclusive shows, with varying success. Players from Spotify to Pandora owner SiriusXM saw ad revenue grow in the next quarter, whereas tech giants like Meta saw dips. Additionally, with Twitter and YouTube recently introducing podcast features, you can find growing choices for brands and creators to create additional revenue and reach another demographic.
Experts say podcast listeners certainly are a sticky audience, and this content offers more flexible ad formats. That may explain why the podcast advertising spend is continuing to grow from $806 million in 2018 globally to $2.6 billion this season, in accordance with research firm WARC. In 2023, it really is projected to attain nearly $2.8 billion globally, accounting for 26.8% of most online audio investments. In comparison, global ad investments in radio will drop around 2.4% next year.
Many people are running or driving or doing something while listening, and I dont think theyre skipping through the ads, said Nadia Gonzalez, CMO at Scibids. Audio ads certainly are a strong format right now.
The variety in ad formats and devices to attain consumers is helping drive interest to the medium from earbuds and speakers to smart home devices and car listening. The podcast format works well, particularly if you have an audience that likes a show or its creator, said James McDonald, director of data, intelligence and forecasting at WARC.
Many shows integrate host-read ads, for example, which currently take into account the biggest share of ad spend in audio, in accordance with WARC. One downside to host-read content may be the proven fact that its not easily scalable. But to believers in the medium, thats no obstacle.
Listeners have already been found never to only understand but accept the worthiness exchange of podcast advertising when it supports this content, which is a potent draw for brands as audiences frequently have a deep engagement and affinity with shows, McDonald said.
Sufficient reason for more devices for listening available, more adoption will result in newer audio ad formats, such as for example shoppable or interactive ads. Paul Kelly, chief revenue officer of A Million Ads, believes podcasting being an ad-supported medium happens to be under-monetized.
Increasing cart [or] saving to a bookmarking list creates a completely net new advertising surface for all those moments where we have been not actively consuming media, Kelly said.
Actually, independent agency Ocean Media recently started a fresh podcasting team as more of its clients expand into that media. CEO Jay Langan said streaming and podcasting are undoubtedly their biggest regions of growth now. Ocean Media caused car platform Vroom, for example, targeting a younger, tech-savvy audience with new media channels. After purchasing a mixture of podcasts and talk shows, such as for example First Things First and Conan OBrien, the brand achieved 10% more efficiency in its upper funnel metrics and 43% more efficiency in the low funnel.
Were pretty bullish on just the continued growth around podcasts, Langan told Digiday. It looks like something that initially people werent adopting as quickly and within the last couple years, most of the audience members have just been through the roof.
Jared Lake, head of media investments at Ocean Media, explained that brands have become thinking about the high amount of affinity audiences have with shows. He said in comparison to other channels, listeners find podcasts have less ad clutter. Brands also discover that podcast content offers more creative flexibility than other ad formats elsewhere.
Given the amount of ads generally in most shows, there’s ample chance of brands to leverage that affinity, Lake said. Podcasts are a fantastic environment to test out messaging and storytelling rather than be constrained to a 30-second ad format. Once you combine that flexibility with the affinity audiences have for the shows they love using with host-read ads, you’ve got a winning formula.
Another upside to podcasts is their potential to utilize a younger demographic as their consumption increases. In March 2022, Triton Digital and Edison Research discovered that Spotify was the No. 1 digital audio service for teens and adults in the U.S., with 35% of listeners age 12 and older utilizing the service most. Subsequently, Spotify saw in regards to a 40% increase in average podcast listening for Gen Z in Q1 2022 when compared to previous year.
This season, greater than a quarter of digital audio ad revenues should come from podcasts, in accordance with Adludio, a company that produces mobile ads for agencies and brands. But Adludio CEO Paul Coggins contends that companies like Spotify still have quite a distance to go in convincing advertisers their platforms work at reaching younger people.
A lot more tech giants are providing podcasts, however the likes of YouTube still have to prepare holistic ad solutions of their platforms to be able to cement the trust of privacy-conscious audiences, Coggins said.