Identifying a medium’s return on ad spend is tricky, but Acast set out to do just that. After conducting a study with 250 advertisers and marketers, it says two-thirds (67%) of podcast ad buyers say that every $1 spent on podcasts returns between $4 and $6 for their brands. And another 30% say they get a $2 to $4 return for each dollar they spend on podcasts.
The U.S.-focused study, conducted this month with Attest, found one in five advertisers say they put their return on podcasts at greater than $6 for every $1 spent on the medium. That was the most of any medium tested. It’s noteworthy that for the other audio medium, broadcast radio, 13% of marketers also say that they got a better than six-times return on their audio investment.
The study also showed marketers have a clear winner when it comes to which podcast genre generates the strongest return on ad spending. Nearly four in ten (38%) say Business category shows have the best return, more than double that of the TV and Movie genre (16%) and more than triple third-placed Sports (9%).
“When specifically measuring return on ad spend, a high performance in the Business category isn’t really surprising because we know those audiences tend to be more affluent,” said Gabriella Gregoris, Group Business Director of National Performance at Acast. “The differences in genres shows that not all audiences are the same and that marketers need to understand their target audiences when booking each individual campaign.”
Based on their belief that podcasting is delivering strong results, marketers are increasing their investments in the space. According to the research, more than two in three (68%) say that their second campaign had a larger budget than their first podcast outing. In fact, marketers were 34-times more likely to say they had increased their budgets from the first campaign to the second.
One rub on podcasting is that listeners hear the same ads too often. But it turns out that is the way ad buyers like it. Acast’s survey reveals that most marketers think that an ideal podcast frequency is between 6 and 9. And 10 or higher is just fine with 15%. Both are well above Podsights’ recommended ideal frequency of 2 to 5.
“This shows us that what advertisers think is the most optimal frequency for a campaign may not always be the right balance,” Gregoris said.
The study also demonstrates the extent that marketers are using podcasting as an add-on to larger campaigns. Podcasts pair well with other forms of media with most marketers saying they improve the campaign effectiveness by 21% to 40%.
Adding podcast ads has the greatest impact when combined with social media, online video and TV according to those surveyed. When it is added to broadcast radio, marketers say the overall effectiveness of an ad campaign improved. A majority (54%) say adding podcasts to radio campaigns gave them a 21% to 40% lift, with 14% telling researchers the lift was even bigger.
The result is 63% of marketers say that based on performance, podcasts deserve 7% to 14% of total marketing spend. Based on the total spent on digital ads in 2022, it suggests podcasts deserve $17.4 billion to $34.8 billion of additional ad dollars. Acast says that indicates both the effectiveness of the medium, and a robust growth potential.
“We know that podcast advertising is the most effective form of advertising out there and this research now proves it becomes even more powerful when part of larger campaigns,” Gregoris said. “Marketers should consider ways to add podcasts to their large multimedia campaigns to see higher returns.”
For all of the positives in the study, it also reveals 51% of marketers wrongly think that investing budgets in large podcasts delivers the best return on investment while only 23% think investing in lots of smaller shows performs better. Acast says research it released earlier this year showed that smaller podcasts have a higher percent of listeners saying ads on the podcast are influential and are welcoming of more ads.
“There is a myth in our industry that successful media buys happen at the show level,” Gregoris said, “when in fact, it’s the marketers who invest in podcast audiences' interests and behaviors who see the strongest returns on their investments.”