Podcasting remains one of the media industry’s hot properties and a new report from Kantar suggests that is not about to change anytime soon. Nearly half (45%) of ad buyers surveyed by Kantar for its Media Reactions 2021 report said they plan to increase their spending in podcast in the coming year. And branded podcasts could be in store for even bigger gains as 71% of buyers said they expect to spend more on branded content by so-called influencers in 2022. The survey results also suggest most traditional media outlets will face the threat of budget cuts.
“After the severe decline in media investment in 2020, the ad industry has been encouraged by a rapid recovery in 2021, with advertising being used as one of the levers to fuel recovery,” said Duncan Southgate, Director of Media Insights at Kantar.
The survey results reveal digital media like podcasting are especially well-positioned. “Next year, the increased spending levels for digital are likely to be even higher than we're seeing this year,” said Gonca Bubani, Global Director of Media at Kantar, on a webinar detailing the report.
One reason podcast advertising stands to gain from bigger marketing budgets is how it is perceived by consumers. Among forms of digital advertising, Kantar’s survey finds that more people are now receptive to advertising on podcasts than from social influencers, which is a reversal of a year ago when podcasting was a still-strong No. 2.
“Podcasts were already the second highest in equity among online channels last year. And this year they overtake influencer content to claim the number one online shopping spot. They're actually the leading online channel in mainland China, Japan, Netherlands, New Zealand and the U.S.,” said Bubani. “Having said that, influencer content is still doing really well,” she added.
Kantar’s findings mean that as more people tune into podcasts, they are concluding that podcast ad quality is high and the messages they hear are more relevant – something that could be a function of a greater reliance by brands on host-read ads in the space.
“Podcast ads have risen in popularity amongst consumers since 2020. Positioned now at number 11 in the overall ad equity ranking, they have overtaken influencer content as the preferred digital ad medium,” said Southgate. “Podcast ads are perceived as better quality and more relevant than they were in 2020, but also more repetitive, which is unsurprising given the increase in ad spend on the platform.”
Bubani said what is happening in audio is a good example of how the media marketplace is finding a new balance. As broadcast radio ad spending holds steady or dips, digital budgets grow. “This will accelerate the digital transformation of audio,” she predicted.
Southgate thinks it is still too early to know exactly how podcasts fit in the media mix. He said the next phase of study for Kantar will be a multimedia assessment to understand that as podcast consumption grows, what works best and which media does it blend best with.
“It's a really exciting time for podcasts,” said Southgate. “And it's not just this idea that consumers like them because they're not too invasive and they seem targeted. Generally, they're also doing very well on brand effectiveness studies.”
The positive halo around podcasting is likely helping Spotify score high in the ranking by marketers of the most trustworthy media brands. The music and podcast streamer was rated as trustworthy by 42% of marketers that were surveyed by Kantar. That put it ahead of TikTok but behind media options like Google, YouTube, Instagram and Facebook. The high score for innovation went to TikTok, however, with Spotify ranking second by that measure.
“Marketers favor channels and platforms they believe provide both trustworthy and innovative advertising environments,” said Southgate. “Among the global brands, Instagram best manages this balancing act. YouTube, Google and Facebook are trusted platforms but are considered slightly less innovative.”
The report also looked at what it calls the “glocal” dilemma as they look to balance the scale of global media platforms with the promise of greater relevance from local media. Southgate says that in 16 of the 23 markets surveyed, the number one ranked brand was a local media brand or a localized version of global media brands. Ten of these 16 are news and magazine brands.
The Media Reactions 2021 report is based on interviews collected from 900 senior marketers around the world representing over 80% of global media spend, and 14,500 consumers in 23 countries.