“Sometimes it’s hard to not think that video gets all the attention,” said Interactive Advertising Bureau CEO David Cohen as he opened the IAB Podcast Upfront Tuesday. But he told ad buyers – gathered to hear what is on the horizon among 30 companies presenting during the three-day event – that the “power of podcasting” is only starting to ramp up. “The future of the audio industry is very bright indeed,” said Cohen.
Despite the pandemic sapping some momentum from the ad market overall, the IAB reports that podcast ad revenue grew 19% last year. “This growth also showed that podcasts are on track to exceed $1 billion this year and $2 billion by 2023,” said Cohen. “That is amazing. There is definitely light at the end of the COVID tunnel.”
Edison Research’s Infinite Dial has also shown that 162 million Americans, or 57% of those aged 12 and older, have ever listened to a podcast. And 41% or 116 million said they listened in the past month.
More than just growing reach, podcasts are also capturing a greater share of audio consumption time according to Edison’s Share of Ear study. Podcast’s share reached an all-time high of six percent in the most recent report making podcasting the fastest growing audio medium. At the same time AM/FM radio’s share has declined to 39% from 51% between 2014 and 2021.
“For every hour of podcast content that was listened to in 2014, there were 25 hours of AM/FM content listened-to,” said Edison Senior VP Tom Webster. “Today, it’s more like a one-to-seven ratio.” He told ad buyers that suggests podcasts still have some catching up to do in terms of the “bang for the buck” that they get for podcast advertising.
The past two years have seen the number of podcasts available nearly quadruple from about 550,000 to more than two million. Webster credits that diversity of content and increased awareness for shifts in listener demographics. Edison’s latest data shows podcast gender and age breakdowns essentially mirroring the overall U.S. population. Today 43% of listeners are non-White.
Cohen added that half of podcast listeners are between the ages of 12 and 34 and agreed the listener makeup is “refreshingly diverse” and growing despite challenges of the past year.
“By almost any metric, podcasting continued to be a growth medium in the U.S. and that is not looking to abate anytime soon.”
‘A Medium Called Audio’
Horizon Media has been one of audio’s biggest champions through the years, even though Executive VP Lauren Russo said during an IAB panel that radio is no longer in its vocabulary. “It has transformed into something entirely new, which is a medium called audio,” she said.
Despite that name change, Russo said radio groups including iHeartMedia, Audacy, Cumulus Media and NPR are leading the change beyond traditional broadcast to streaming and podcasting. “Everyone is noticing the power of podcasting, and we continue to see double-digit growth in the space, and it makes our job a lot easier when we go to leverage it for the marketplace,” said Russo. “The podcast space allows clients to extend their reach with personalities and content that may not be readily available on other media.” She called host-read as the “preferred method” for clients because their organic nature weaves into a show’s content.
How advertisers are placing their buys is also likely to evolve. An AdsWizz survey released at the IAB Podcast Upfront found 23% of digital audio buys today are done programmatically, yet 57% of buyers expect to allocate more buys to those platforms. And 60% said they plan to buy programmatically in the next six months.
“Clearly it’s here to stay and it’s increasing fast,” said AdsWizz CEO Alexis van de Wyer. He thinks more buyers are realizing programmatic doesn’t mean lower-quality creative and that metrics showing audience engagement are proving that out. Their research using attribution pixels found 72% of podcast campaigns drove consumers to make a purchase with an average conversion rate of 4.9% compared to 4.4% for Facebook ads.
Despite podcasting’s embrace by advertisers, Russo said challenges remain for ad buyers. Those include a reliance on publishers’ downloads and other first-party data and a lack of uniform measurement. Yet improvements in attribution are helping, especially as Horizon moves toward business outcome guarantees. “Clients are interested in it, but at the end of the day they want to know it delivered,” she said.
Russo predicts podcasting revenue will be “higher than anticipated” by the industry as third-party measurement and attribution become the norm. She also sees broadcasters having a leg up when it comes to content. “The top podcasts will be from major radio broadcasters,” Russo said.