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eMarketer Forecast: Podcast Ad Revenue To Climb 29% This Year.

The ad research firm eMarketer has released its updated ad spending outlook for podcasting and it sees a continued climb in not only the dollars being directed to the medium, but also podcasting capturing a larger share of digital audio ad spending. Analysts expect podcast ad revenue to grow 28.6% to more than $1.7 billion this year. And it expects the industry to cross the $2 billion threshold in 2023.

“The momentum is really there for advertising on podcasts,” said eMarketer analyst Ross Benes. His outlook may hit the same numbers, but his timing is a bit more cautious that what the Interactive Advertising Bureau and PwC forecast last week. The IAB/PwC outlook predicted the $2 billion in podcast ad revenue could be achieved this year.

In addition to growing dollars, eMarketer says podcasting’s share of ad spending continues to climb. This year. it expects podcasting to capture 27% of all dollars directed to digital audio advertising. And by 2024, it forecasts more than a third of those ad dollars will go into podcasting.

“As podcast ad spend has increased, it accounts for a much greater share of total digital audio ad dollars than it used to,” explained Benes. “Prior to the pandemic, in 2019, podcasts were about 15% of total digital audio. By the end of next year, they will be more than 30%. So that's a doubling in its share of total digital audio ad dollars.”

A March survey by Advertiser Perceptions shows that while 31% of agencies and brands have dedicated podcast ad budgets, more than half (54%) are taking the money out of their overall digital allocation including 49% that said it comes from their digital audio budget line. But Benes said he expects that to change.

“As podcasts attract more ad dollars, the number of marketers who have dedicated budgets for podcasting will grow,” he predicted. “And when you have dedicated budgets that signals that the medium is no longer experimental, but it's one that is an essential part of marketers’ medium mix.”

Benes noted on a webinar that nearly a quarter (23%) are funding their podcast spending by moving dollars off of broadcast radio. But he thinks radio is still the dominant audio medium with ad billings about six-times what podcasters pocket. “Traditional radio shares of total audio dollars is declining, and podcasts are growing, but the bulk of spending is still going toward traditional radio right now,” he said.

Podcast ad dollars are growing in step with audience size. The latest eMarketer forecast projects total podcast listening in the U.S. will reach 126.1 million per month this year, a six percent increase from a year ago. It is the first time eMarketer has not forecast double-digit growth, but it is hardly a cause for alarm.

“That's more of a sign of how big the base has become for podcasts,” explained Benes, noting a third of Americans are already listening.

Its forecast also predicts a narrowing gender gap. While 65% of men and 61% of women are estimated to listen to podcasts today, by 2026 eMarketer forecast 75% of both genders will do so.

For the first time, eMarketer has also released an updated forecast of how big podcast ad revenue will become for two of the biggest players.

Analysts expect one of every five dollars spent on podcast ads in the U.S. this year to go to iHeartMedia which eMarketer estimates will have $344 million in podcast revenue this year. And by 2024, it predicts podcasting will be a $647 million business for iHeart as its share of total podcast ad revenue is forecast to keep climbing to the point where one of every four dollars spent on podcasts will be directed to the company.

“iHeart is a little different than many of the digital-centric players because they have a large portfolio of terrestrial radio stations and many of their podcasts are traditional radio talk shows that have been transported to become digital podcasts and that gives them more control over ad inventory,” Benes said.

Spotify’s podcast ad revenue numbers trail iHeart’s, but it too is rolling up the revenue. Emarketer estimates Spotify will have $192 million in U.S. podcast ad revenue this year and within two years it will reach $414 million with a growth rate that remains well into the double-digits. By 2026, eMarketer thinks that one in five dollars of Spotify revenue will come from podcasting.

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