More than one in five digital radio ad dollars will go toward podcasts this year, according to a newly updated outlook for the sector by eMarketer. Its analysts project podcast industry revenue will grow 10.4% in 2020 to $782 million. And while the coronavirus pandemic has made forecasting especially perilous, eMarketer predicts podcast revenue will jump 45% in 2020, when it estimates industry revenue will top the $1 billion mark for the first time.
“While some ad campaigns were paused in the first half due to the uncertainty from COVID-19 lockdowns, we expect a rebound in Q3 and Q4,” said eMarketer Forecasting Director Shelleen Shum. “The continued growth in podcast advertising is no surprise, as investments have made podcasts accessible to a wider audience. The news genre, a focus of many podcast advertisers, has performed well during the pandemic.”
The firm did not release an updated outlook for digital radio, but Shum said it is seeing double-digit declines in 2020. “Growth in podcast advertising spend will be more resilient this year relative to digital radio advertising as a whole,” he said.
Analysts see continued growth for podcasting into 2022, albeit at a much lower growth rate than they foresee in 2021, when many prognosticators are hoping for a snap-back built around models that factor in a waning impact of the pandemic.
“One of the key challenges in podcast advertising is the lack of uniformity in measurement,” said Shum. “The IAB has released a set of guidelines to establish a common set of ad metrics for podcasts, which should bring some standardization to the industry and give advertisers more confidence.”
Unlike many other digital media, podcasting is still mostly sold through the traditional sales rep model. But eMarketer does see the share of programmatic ad sales slowly increasing. This year it estimates four percent of podcast ads will be programmatic, with that figure increasing to six percent next year. Analysts credit investments in audience measurement and the shift from untrackable baked-in ads toward dynamically inserted ones with paving the way for programmatic buys. By 2022, eight percent of podcast ads will be traded programmatically, according to eMarketer’s new forecast.
In terms of audience, eMarketer predicts 105.6 million people in the U.S. will listen to podcasts, surpassing 100 million for the first time. That equates to half of U.S. digital audio listeners. And the firm sees the share of digital audio listeners tuning to podcasts continuing to increase. By 2023, it predicts six-in-ten digital audio listeners will also be podcast listeners.
There is potential for faster audience growth since eMarketer has previously underestimated how quickly consumers would adopt the format. Last year it projected 78.9 million Americans would listen to podcasts. It now forecasts that number will be 105.6 million.