Podcast advertising is projected to top three billion dollars this year according to PwC, but what happens in the digital ad market could impact whether that actually materializes. Analysts at eMarketer have just cut $5.51 billion from its projected 2023 digital advertising outlook.
“Our current outlook [is] ad spending won’t bottom out,” eMarketer says. It predicts $278.59 billion in digital ad spending this year, down from the estimated $284.10 billion that was spent on digital ads last year.
Yet analysts say that marketers are “scrutinizing their budgets” and that could serve as a drag on spending. “With inflation driving up operating costs and a potential recession looming, marketing is getting deprioritized,” says eMarketer. “Advertisers that can afford to keep spending, will. These advertisers could gain market share when other brands pull back or go dark. But the longer the recession, the harder it becomes to maintain this strategy. Our latest forecast has digital ad spending rebounding by 2025.”
With inflation driving up operating costs and a potential recession looming, marketing is getting deprioritized,” says eMarketer. “Advertisers that can afford to keep spending, will. These advertisers could gain market share when other brands pull back or go dark. But the longer the recession, the harder it becomes to maintain this strategy. Our latest forecast has digital ad spending rebounding by 2025.”
In its latest update, eMarketer says that budget cuts will impact some media channels more than others. While advertisers are “still amping up spending” on connected TV, it says social media networks will be the hardest hit as they struggle to adapt to privacy setting changes made by Apple. The firm cut its estimated spending on social media during 2023 by $16.21 billion to $71.05 – with Meta/Facebook taking the brunt of the cuts.
“Programmatic channels will win as advertisers prioritize flexibility,” says eMarketer. “Expect programmatic ad spending to experience strong growth across display, digital out-of-home, and podcasting.” It also says that macroeconomic conditions will “supercharge measurement innovation” as platforms address shortcomings.
Even with digital ad budgets under pressure, eMarketer is still projecting double-digit growth for podcasting. Analysts predict podcast advertising will climb 31.8% to $2.2 billion this year, and then grow another 34.2% to $2.6 billion next year. They say podcast has remained a “relatively safe bet for advertisers during a tricky time.”
Podcasting has benefited by its growing usage according to eMarketer. It estimates weekly podcast listeners grew five percent to 98.4 million Americans last year. Looking ahead, eMarketer predicts that the number of weekly podcast listeners will grow by 5.4% this year as the total is projected to total 103.6 million. Analysts do expect growth to continue for the foreseeable future, however, with weekly listeners forecast to reach 119.4 million by 2026.
“Podcast growth is slowing in the U.S., but that’s merely a sign of the platform’s maturity. It still remains an opportunity with many advertisers who have overlooked the channel,” eMarketer says. “Despite a slight slowdown in podcast audience growth, the medium remains an underutilized advertising channel.”
When compared to AM/FM radio, eMarketer estimates advertisers will spend an average of $13.70 per podcast listener this year. That is roughly a quarter of the $52.10 they are estimated to spend per on-air radio listener. “That suggests there’s still plenty of runway for podcasting as an ad channel,” it says.