The podcast industry continued to show growth last year despite a slowdown in national ad spending. The Interactive Advertising Bureau says podcast revenue increased five percent to $1.9 billion. After years of double-digit increases, it says 2023’s overall challenging ad market slowed podcast’s growth. Yet even as it experienced the sector’s smallest expansion since the IAB began tracking podcasting, there were reasons for podcasters to be pleased with the results. Not only does the data show podcast ad spending has more than doubled since 2020, but podcasting outpaced the 7.3% growth in the overall digital ad market in 2023, according to IAB data.
The IAB’s U.S. Podcast Advertising Revenue Study, which is produced by PwC from data reported directly by a sample of podcast companies, shows 2023 was also a year of varying results.
“While a few of the largest podcast companies maintained double-digit growth, mid-tier companies hit a speed bump,” said IAB VP of Industry Insights Chris Bruderle, adding, “But revenue is already bouncing back.”
Analysts say the national ad market is showing improvements, and that is reflected in the IAB’s outlook for podcasting. It forecasts the podcast industry’s revenue growth rate will more than double what it experienced in 2023 by year-end. It projects total industry ad revenue will increase 12% in 2024, with total revenue on track to surpass $2.1 billion. And the IAB says podcast is on a course to have $2.6 billion in total ad revenue by 2026.
“Optimism remains for the next three years,” the report says. “Improvements in measurement and the evolution in programmatic buying, along with revenues tied to video and live events are contributing to the positive outlook.”
For the second consecutive year, Comedy and Sports outranked News as the genre with the highest revenue share during 2023. The IAB says it was Comedy that ranked first, capturing 17% of total podcast ad dollars. Sports, with a 13% share, was down two points, although it still had a one-point advantage on News, followed by Society & Culture, which at 11% was the only other genre with a double-digit share.
“Driven by shows from noteworthy personalities such as Conan O’Brien and Joe Rogan, Comedy’s revenue share grew by four points in the past two years, overtaking News and Sports,” the report says, noting Comedy is the most-listened-to podcast genre.
“Between Comedy and Sports, consumers are using podcasts to be entertained and delighted – which provides a sanctuary from other serious headlines playing out across the nation and the world,” said David Cohen, CEO of IAB. “It’s where the greatest engagement and subsequent ad dollars are.”
True Crime continues to be one of the strongest categories among listeners, especially women, but the content continues to be a turn-off for some brands. The result is the IAB says True Crime’s total ad revenue share was six percent, or roughly a third of what Comedy shows received.
For all its growth, and a flood of major brands coming into the medium, the IAB says podcasting continues to appeal to a broad range of advertisers. In fact, PwC says the biggest ad category for podcasting last year was “other” – or a catch-all category of spenders that don’t fit neatly into one of the other segments. The IAB says that demonstrates that a high volume of smaller categories continue to showcase the channel’s growth and appeal to a variety of advertisers.
“Podcasts deliver at scale, can pinpoint niche audiences, and have the power to build authentic connections with consumers,” Cohen said. “And as audience measurement in podcasting becomes more aligned with other digital channels, there’s more growth ahead.”
On the big brand front, the IAB also points out there were noteworthy increases in the GPG and Retail ad categories – up 4% and 5% respectively since 2022. “The shift reflects CPG and retail’s increased leveraging of digital platforms that enable data-driven, direct connections with consumers, which helps CPG with branding, while helping retailers personalize by geo location,” the report says.
Podcasting remains a fast-growing medium overall, the IAB says in the annual report. It says developments including improvement in measurement, more programmatic sales, live events and the continued development of video podcasts will continue to fuel that growth for the foreseeable future.
“IAB expects podcasting to continue to grow as both a bourgeoning advertising channel for brands and an engaging digital platform forging strong bonds with consumers,” it says.
Download the IAB’s U.S. Podcast Advertising Revenue Study HERE.