The Interactive Advertising Bureau projects the podcast industry will reach $1 billion in annual revenue by 2021 and industry executives said Wednesday they see no reason that mark won’t be crossed even with the upheaval of the coronavirus pandemic. Speaking at the RAIN Global Podcast Leadership Summit they said as the industry continues its maturation, the strengths of podcasting’s appeal continue to hold up under scrutiny.
“The results are there. Marketers have seen the value that podcasts bring and that’s ultimately a critical piece,” said Targetspot Sales Director Dave Sosson. “When you’re talking about everything that has gone on in the past few months and the IAB is calling for 15% growth this year, that’s really exciting.” He thinks that could set the industry up for growth twice as big in 2021. “There is certainly an increase in the amount of companies interested and content that is available, and the categories that we are seeing are starting to expand,” said Sosson.
In addition to the direct-to-consumer (DTC) advertisers, podcasters say large gains have been made this year in ad categories such as financial services. Recently released Magellan AI data, which showed two-thirds of the top podcast ad spenders in June were not running ads in May, also gave executives reasons to be optimistic.
“Folks that aren’t doing podcasting are realizing they should be there,” said Art19 Chief Revenue Officer Lex Friedman. “It took some companies years to get comfortable.” He said that some advertisers have taken longer to feel good about the concept of host-read ads, while others need to accept the limits to ad tracking. But he thinks the type of content available has helped change their thinking.
Sosson said he is also seeing more brands look beyond the promotional messages that typically run in podcasts to view the medium as a way to build their brand. “In recent weeks I’ve had some requests where clients wanted to look more at awareness-based campaigns and what podcasts can do for them,” he said.
As more podcasters embrace programmatic platforms, executives said it is helping attract more marketers to the medium, in part because of the guarantees that those systems offer. There are also more third-party companies that can add qualitative targeting capabilities. They expect that to play an even larger role in 2021.
Ad Tech Now In Vogue
One of the driving forces in podcasting growth is the embrace of ad technology and what podcast executives said is the increasing prevalence of brands using third-party measurement solutions to be able to measure the value of the podcast advertising. AdsWizz Senior VP Anne Frisbie said using outside sources helps brands “really believe” the attribution data they receive. The data ranges from brand lift studies, lead generation studies, app download counts, store visits, and even a growing number of podcast-specific analytics. “As podcast advertising grows up, obviously the demands from buyers go up as well,” she said.
A lot of attention has been put in recent years on moving podcast metrics beyond the simple download, but Simplecast CEO Brad Smith said this metric it isn’t going anywhere and he believes the focus should be on embracing a single definition of what a download is. That is something the IAB Tech Lab’s certification process has helped. “Step one is to see the industry bench line and big steps are being made on that,” he said.
Beyond downloads, Smith said unique listeners could offer podcasters and ad buyers an option beyond downloads. “If offers a better, holistic picture of just what size audience you have outside the download,” he said. Art19 is also internally working on a way to measure drop-off and retention through third party listening apps to give publishers a clear view across all apps how their show is performing.
Those sorts of efforts should help what Frisbie said are the limits that podcasters face with so little rich audience and behavioral targeting data that many marketers expect from digital media. Other solutions to making the medium more attractive are more within the realm of what podcasters control. AdsWizz has a service that transcribes the audio file to text giving the advertisers other entry points into a show. “That unlocks a great ability for advertisers and podcasters to market their content based on relevant and trending topics, not just what the show title says,” said Frisbie. For example, she said it would enable a brand to not just broadly buy sports podcasts but focus on a specific topic within the genre.
The transcripts also strengthen brand safety efforts. “Brand safety has become a critical component of the way brand advertisers want to buy,” said Frisbie. “Some brands may not want to buy in alcohol content and others absolutely want to target alcohol content. Some brands may not want to be associated with hate speech.”
Friedman said the industry also needs to target the tech giants, especially Facebook, because that is where many brands first go when placing digital ads. He said an appeal to marketers is podcasting’s ability to reach consumers that may not be touched by other media. “Direct response [advertisers] and brands have shown again and again that people are paying attention,” he told the virtual conference.
For all the things that podcasters think need to improve, Smith said the reality is there isn’t a lot of “doom or gloom” in a growing podcast industry. “We’re growing, we’re making the right calls and we’re working toward industry standards,” he said. “Podcasting holds a very high bar in the work that we create and the ads that we run, and everyone needs to give them a pat on the back.”