Podcasting may have been a disruptor during the past several years, impacting how consumers listen to audio and how marketers spend their dollars. As the Interactive Advertising Bureau forecasts podcasting will pull in more than $2 billion in ad revenue this year, ad pros speaking at the IAB Podcast Upfront Wednesday said they see several trends working in the industry’s favor to allow that growth to continue longer-term.
Even as attribution metrics show how podcasts deliver consumers to brands that advertise, Audacy Executive VP of Digital Sales Ken Lagana said the impact of content trends cannot be overlooked either. “The reality is that the content diversity across podcasting could not be stronger. There’s literally a podcast for anyone on any topic, and the content keeps getting better,” he said. Lagana said the industry is also experimenting with new formats, often times with big production budgets, and that is creating opportunities for advertisers. “We’re also seeing continued diversity in audience more than ever before, and from an advertiser perspective that is fantastic to see.”
Pod Digital Media CEO Gary Coichy agrees that democratization is moving the ad needle as bigger stars come to the medium and bring their fans along with them. He says the diversity initiatives being made by larger brands helped funnel in ad dollars to support that content. “They’re realizing that podcasting is a viable channel. It has a seat at the table now,” said Coichy, whose company sells time for more than 400 mostly Black and Hispanic-targeted shows. He said that a lot of brands are not running podcast tests but are jumping in full-throttle with sizable budgets. “We’ve seen our revenue grow 40% year-over-year,” he said.
TransUnion Senior VP Andre Swanston thinks the diversity of content distribution is also a factor. While podcasts are clearly a mobile medium, he said the uptick in smart speakers and smart TV listening also helps. “The other part is the cost efficiency,” he said. “If you have similar brand recall and efficacy with TV at a fraction of the CPM, then it makes sense for an advertiser to leverage more and more of their dollars in that medium.” Swanston said having more consistent data from TransUnion and others is also swaying brands toward audio. “That’s giving more people confidence to move dollars in this direction,” Swanston said.
Lagana also thinks better measurement is paying off. “It’s helped move podcasting from this niche thing to being adopted as more line items into more media plans of major brands,” he said.
Being able to target demographics and psychographics at scale has given marketers a “secure feeling” about how to spend their dollars as they use measurement data that is equivalent to other major platforms, Lagana said.
Coichy agreed, saying Fortune 500 companies may want to reach a more diverse audience -- but they still demand data. That led Pod Digital Media to create a partnership with Nielsen that allows it to track campaign impressions. This has shown consideration, purchase intent, and recommendation lifts among consumer-packaged goods, business-to-business and direct-to-consumer brands that are exceeding the norms for Nielsen. “The measurement plays a vital role,” he said.
Lagana said Nielsen’s growing role in the space, including studies that reveal average brand lift by sector, is advancing podcaster efforts. “Both of those things combined have been the triggers for more spending in the podcast space,” Lagana said.
Audacy recently conducted a study with Claritas and IRI for a major consumer packaged goods brand. It showed how a brand campaign that ran across its podcasts directly contributed to in-store purchases, larger basket sizes, and which brand they rejected to buy the advertised brand thanks to store loyalty card data. “It gives us a direct seat at the table,” he said.
As marketers think more about podcasts, Swanston expects it will become more important to show more media mix modeling information to brands as they track when and where a consumer is exposed to an ad.
For all the growth, Coichy thinks education will need to be a continued focus for podcast ad sellers, especially as the industry develops new products and measurement options. “The medium is still emerging,” he said. “Some brands are still trying to figure it out. We are mainstream, but the maturation is still happening.”