Despite economic headwinds, podcast ad revenues posted strong growth in 2022, increasing 26% to a new record of $1.8 billion, according to the Internet Advertising Bureau. “For the second year in a row podcasting is the number one growth channel across all digital media,” said Eric John, VP of the IAB’s Media Center, who released the report Thursday during the IAB Podcast Upfront. He pointed out that podcast’s growth rate was twice that of digital advertising overall.
Podcasting also continues to be one of the fastest-growing digital channels according to the report, produced with PricewaterhouseCoopers. It exhibited higher growth rates than social media (4%), paid search (8%), display (12%), digital video (19%), and digital audio overall (21%). “Podcast revenue remains comfortably at the top for the second year in a row,” John said.
The data, however, reflects the ad marketplace overall. Typically the fourth quarter has the largest share of revenue each year. That was the case again last year, but Q4’s share was the smallest seen in the last six years. It accounted for 29% of last year’s total revenue compared to more than a third in 2021 and 2020. That led to a year-end tally that was below the $2.1 billion the IAB had previously forecast.
In what may reflect a shift of consumer interest away from news content without a presidential election – something also seen in cable television ratings – the IAB says Sports overtook News as the biggest revenue-producing category.
“It's hard to pinpoint what's causing this or for how long it lasts. But we're positing that the rise of Sports, Society & Culture, and Comedy reflects the return of interest in live events and face-to-face living that fuels those genres,” John said. “Meanwhile, we expect the decline in News may reflect the fact that we're between political cycles. And 2022 was the first year when there were no COVID-related lockdowns, mask mandates or school closures, likely producing a lower appetite for news and political opinion.”
The report says 15% of industry revenue last year went to Sports podcasts. The Society & Culture and Comedy genres tied for second, with each accounting for 14% of total revenue. News, which had led in 2021 with a 19% share, fell to fourth, with 12% of revenue coming from that category. The True Crime genre ranked fifth, with its share falling by nearly a third to seven percent.
The annual report shows podcasting continues to benefit from a wide array of advertising categories. The biggest was financial services, accounting for 14% of industry revenue last year. The arts, entertainment and media category ranked second, at 13%. The IAB says the consumer packaged goods, retail and pharmaceutical categories were also significant contributors – with retail up 80% year-to-year as consumer spending in stores rebounded in 2022 and returned to pre-pandemic levels.
But the report notes that the “other” category, that includes multiple low-revenue categories, was actually podcasting’s biggest revenue source last year with 28% of ad dollars coming from that broad mix of product and service advertisers.
“For a while podcasting was a marketers best kept secret. But as this year’s study shows, the news is out,” John said.
Looking ahead, the IAB and PwC are forecasting that podcasting will continue on its growth trajectory in 2023, despite the ad market uncertainty. It estimates podcast ad spending will climb 43% with revenue reaching nearly $2.3 billion. And by 2025, it expects industry ad revenue to approach $4 billion.
“It’s clear now that the growth of podcasting was not just a temporary shift in behavior,” said IAB Chief Executive David Cohen. “The diversity of voices and content — often targeting underserved audiences — is driving more listenership and more time spent, and that is attracting more advertisers.”
While podcast ad revenue is still increasing double-digits, the updated forecast points to a slower pace of growth than the $4 billion in revenue predicted for in 2024 – that threshold isn’t expected until 2025.
Yet as podcast consumption keeps climbing, John said that more ad buyers will take notice and shift more dollars into the format.
“These ad category and content genre trends tell us that the growing appetite for bespoke diverse content is accelerating and opening doors for better relevance and better adjacencies for marketers that align with those creators who are leading the conversations that matter to your customers,” John said.
The IAB’s 2022 podcast revenue results are based on data collected by PwC from seven large podcast companies, including AdsWizz, Cumulus Media, iHeartMedia, NPR, Soundrise, Spotify, and Wondery.
Download the full IAB podcast revenue report HERE.
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