Podcast ad spending is forecast to climb 27.4% this year to $1.7 billion. That double-digit growth rate may be welcome, but eMarketer says the real gains are reflected in the share that podcasting makes up in overall digital audio ad spending. In 2019 it says roughly 16% of digital audio ad dollars went to podcasts. This year analysts estimate that share will nearly double to 27.4% with podcasts expected to capture a third of digital audio ad spending by 2024.
“We forecast that U.S. podcast ad spending will surpass $2 billion next year and $3 billion by 2026,” says eMarketer. “Most digital audio monetization will come from recorded music for the foreseeable future, but podcasts’ share of the market has grown so much—and will continue to do so—that it cannot be ignored by marketers. Once relegated to experimental budgets, podcasts are becoming a crucial component of multimedia ad campaigns.”
The Interactive Advertising Bureau has yet to release its final tally for 2021 revenue. But the eMarketer team is confident that the billion-dollar threshold was indeed crossed last year. In fact, it estimates podcast ad revenue totaled more than $1.3 billion, a 55% increase from 2020. And while the rate of growth makes its expected contraction, the overall industry revenue numbers keep growing.
Giving eMarketer confidence in its outlook is an Advertiser Perceptions survey conducted in August. More than half of the 225 U.S. advertisers surveyed said they planned to increase their podcast ad budgets in 2022. Nearly half (46%) said they would maintain current spending levels, with just one percent planning to cut back on podcast ads.
While nearly a third (31%) of advertisers surveyed have a dedicated line in the marketing budgets for podcasts, most do not. Instead, the Advertiser Perceptions survey found that roughly half (49%) took the money out of their digital audio budgets. Nearly a quarter (23%) funded podcast ads through their existing radio spending allocations. While about a third said podcast ads are paid through their test-and-learn budgets.
“As podcast ad spending increases and accounts for a greater share of total audio ad dollars, expect more advertisers to break out podcast-specific budgets,” says eMarketer in a post. “Having dedicated budgets could help centralize campaign planning and measurement for advertisers committed to podcasts over the long run.”
While podcast ad dollars may continue to climb, eMarketer has predicted digital audio subscription’s share will hit its peak in 2022. The firm forecasts after several years of consecutive increases, U.S. digital audio subscription revenue will peak at a 63.9% share of total digital audio revenue in 2022. Dollar figures will continue to grow after that, but eMarketer said in December that it believes subscription revenue will make up slightly less of the digital audio ad revenue pie as ad spending grows in share. By 2025 it says audio subscription revenue’s share will be 62.1% -- or nearly two points less of total audio revenue.
Download the full eMarketer report HERE.