More than one of every five podcast advertising revenue dollars comes from shows in the News genre. That is according to the Interactive Advertising Bureau’s annual IAB Podcast Ad Revenue Report. Based on the $708.1 million industry tally for last year, the News category had total revenue of roughly $156 million. Comedy was second, with 17% of podcast industry revenue from shows that make you laugh.
“Those were the number one and number two content revenue drivers for podcasting, which bodes well for the space during COVID,” said Chris Bruderle, Senior Director of Research and Analytics at the IAB. “The most preferred content genre for advertisers to run alongside of is the news space, followed closely by the comedy space. In 2020 those are the top content genres in terms of listenership, which means those audiences are really strong from a reach and engagement standpoint. So, it’s a great place for advertisers who still want to be in the market, to put their dollars. It has really set this space up for resiliency that not all platforms are experiencing right now.”
Among the other big revenue-generating show categories were Society & Culture and Business, both with double-digit shares, and True Crime, responsible for about one of every ten dollars pocketed by podcasters last year.
The biggest source of those advertising dollars continued to be retail direct to consumer (DTC) brands, which for a second year accounted for 22% of industry revenue during 2019. It was followed by financial services, which had a 16% share, a six-point drop from the prior year. Bruderle said during an IAB webinar on Monday that the industry’s strong ties to DTC and financial categories will be especially helpful for weathering 2020’s ups and downs.
“Overall, as advertisers are cutting their spending, those who have been doing it less are DTC advertisers and finance — two categories podcasting has an established relationship with,” Bruderle said. “The fact that podcasting has an established relationship with those ad categories bode well for the podcast space being resilient during COVID.”
Among the DTC ads, the IAB report showed the biggest advertisers are from the health and wellness, home and appliance, and food and beverage categories.
The data also shows that brand awareness ads continue to be an important part of the podcast ad mix. Bruderle pointed out that in 2017 branded ads had a 29% share of all podcast ads, rising to 38% in 2018 and to 42% in 2019. “Direct response is still the dominant type of advertising in the space, and that makes a lot of sense with the call-to-action abilities,” he said. “However, with the fact that the podcast space is taking off from a listener volume standpoint, advertisers are finding it to be a platform that can drive some reach and ultimately drive ad recall.
The IAB said its data showed that even as more brand marketers come into podcasting, many did not bring along their pre-recorded radio spots and attempt to tuck them into the medium. Two-thirds of podcast ad revenue last year was tied to host-read commercials, a three percent increase compared to a year earlier. And the revenue tied to pre-recorded ads fell from more than a third in 2018 to slightly more than a quarter last year.
“It’s easy to switch out messaging when you have host-read,” said Bruderle. He also thinks it is a way for a marketer to tap into the confidence that a listener puts into a podcast host, with their halo over the product advertised. “I think this will only grow,” he said. Dynamically-inserted ads continued to make up about half of the ads run on podcasts last year, the report said.
“The resiliency to COVID is really impressive — the space is really doing well,” Bruderle said about the industry’s prospects for 2020. “It’s a testament to podcasting as a strong advertising platform overall.”
As Podcast News Daily reported Monday, U.S. podcast ad revenues will near the billion-dollar mark in 2020. The growth rate will be halved, however. The IAB projects industry ad revenue will increase 14.7% this year, down from an earlier estimate of 29.6%.
Download the full Interactive Advertising Bureau’s annual IAB Podcast Ad Revenue Report HERE.