top of page

IAB Still Sees Double-Digit Growth For Podcasters In 2020.

U.S. podcast ad revenues will near the one billion dollar-mark in 2020 according to the Interactive Advertising Bureau. The fourth annual IAB Podcast Ad Revenue Report, which was again prepared by PwC, forecasts the industry will still experience double-digit growth this year, despite the impact of the coronavirus pandemic. 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%. 

“In the early days of COVID-19, the media formats that remained resilient were those that provided agility to marketers to change messaging,” said Sue Hogan, Senior VP of Research and Analytics at the IAB. “Sixty-six percent of podcast advertising is host-read – providing a very valuable, fast way for brands to stay in-market with the right message at the right time.”

Third and fourth quarter podcast revenue is expected to “rebound” according to the report. The IAB says it thinks the pandemic will only shave four to eight percent off the original forecast in the second half of the year, compared to the past few months when business lockdowns resulted in advertisers hitting pause. 

“Podcast advertising is considered more resistant than other media against COVID-19 for multiple reasons,” the report says. That includes the medium’s “agile and flexible” format with host-read ads allowing for a quick shift in ad messaging. The report also cites the strength of the News genre, already an advertiser favorite, which is seeing growing audiences. 

“News ad revenues were hard hit in other media. In the early days of COVID-19, we saw advertisers blacklist and block news sites and search terms while they pivoted messaging to avoid seeming tone-deaf,’ said Hogan. “News podcasts have been a favorite of consumers and set the medium up nicely for advertiser placement.”

The IAB also says that some of podcasting’s best advertising categories – such as direct-to-consumer (DTC) and financial services – have maintained their overall spending despite COVID-19.

To gauge more granularities on the COVID-19 impact, the IAB and PwC asked podcast companies why they are now scaling back their own revenue projections for 2020. Nearly a third (31%) said that advertiser cancellations were the biggest drag. And a quarter said clients were pausing campaigns that had already been running. One in five said there have been fewer incoming requests for proposals from marketers. And one in ten said clients had not updated their creative messaging to reflect the times.

Some podcast executives had predicted, pre-pandemic, that the billion dollar-mark could be crossed as soon as this year. But the IAB report now suggests that milestone will likely need to wait until 2021. Based on data collected from 19 podcast companies, the IAB/PwC report says that is all but certain. It forecasts a stronger 55% growth rate for the industry next year, with another 36% gain projected in 2022.

2019 Revenue Topped $700 Million

For a fast-growth industry like podcasting, the focus is on the road ahead. But the IAB/PwC report also has a final tally on how last year was. It shows industry revenue totaled $708.1 million in 2019, an increase of 48% compared to the year before. 

The data shows retail direct-to-consumer (DTC) ads and financial services continued to dominate with 22% of industry revenue coming from DTC brands and 16% from the financial category. Overall, the share of direct response ads remained roughly the same. They accounted for 54% of all podcast ads last year, according to the report. Brand awareness ads continued to grow, accounting for 42% of industry ad revenue in 2019 compared to 38% in 2018. Yet at the same time, branded content’s contribution was cut by two-thirds. The report says just 3% of industry ad revenue last year came from branded content compared to 10% the year before.

Even with more brand advertisers, the host-read ad continues to hold its appeal. Two-thirds of ad dollars last year were tied to host-read ads according to the IAB, a three-point gain from a year earlier. And despite more big-name brands coming into the space, there isn’t a flood of radio-style commercials. The data shows announcer-read and pre-produced ad dollars dropped year-to-year with less than a third of revenue coming from that type of creative.

How long are those ads? The report says 44% of spots were between 31- and 60-seconds in 2019 with a move toward shorter ads as the number of spots in the 16- to 30-second range grew. The data also showed that three-quarters of revenue was generated by mid-roll ads, with another quarter coming from pre-roll ads. Just a small amount of revenue comes from post-roll ads.

“Podcasts have solidified their place in the marketing mix, with more marketers planning ahead to secure both inventory and pricing earlier in the season,” said Zoe Soon, VP at IAB’s Consumer Experience Center of Excellence. “Brands increasingly see the value of ‘owning’ a podcast series — podcast hosts are becoming trusted influencers with loyal communities. That translates to more consumer engagement and, ultimately, stronger ROI.”

2 views0 comments


bottom of page