Despite economic headwinds, Magellan AI says podcast advertising managed to eke out some growth in advertising revenue during the third quarter. Podcast ad spending decreased from June to July, but Magellan AI says it recovered in August and September and put the final tally at a 2.6% growth rate compared to the second quarter.
The top 10 advertisers in Q3 spent an estimated $75 million, which was a six percent increase from what the top ten spend during second quarter. Magellan AI says eight of the top ten advertisers remained the same, led by the online mental health brand BetterHelp, which remained the top spender at $20.9 million – a four percent increase quarter to quarter. The top ten includes a newcomer with Helix Sleep’s $4.5 million of podcast investment during Q3 earning it a tenth-place finish.
Live entertainment was the hottest podcast ad category for a second consecutive quarter. After more than doubling its spending from Q1 to Q2, Magellan AI says live entertainment spending jumped 72% between Q2 and Q3 to an estimated $8.2 million. Another fast-growing ad category was fantasy sports, which rose 57% to $9.8 million. In terms of dollars, the third-biggest gainer meant more to the industry, however. Consumer electronics spending jumped 47% quarter-to-quarter to $17.4 million during Q3.
Based on its analysis, Magellan AI says the average monthly spend increased three percent quarter-to-quarter for brand awareness while direct response ad spending was flat. And during Q3, brand ads made up 62% of the market compared to 29% for direct response.
Even as podcasters look to programmatic solutions to help sell the so-called long-tail of podcasting, Magellan AI says the biggest shows still consume the largest share of ad dollars. During the third quarter, it says the top 500 podcasts pocketed 44% of podcast ad dollars. That is roughly on par with the 47% share in Q2. Magellan AI says advertisers spent an average of $190,000 per month on podcasts that ranked in the top 500 compared to an average of $30,000 on shows that ranked between 501 and 3,000.
The quarterly report by Magellan AI says average podcast ad loads shrank by four percent between the second and third quarters. Listeners probably did not notice the change since it means that the average podcast dedicated 5.77% of an episode time to ads compared to 5.99% in the prior quarter.
True Crime was the genre with the heaviest ad load during third quarter, with more than eight percent of episode time going to advertising. It was followed by Family & Kids and Society & Culture, both of which topped seven percent.
During Q3, five of the 19 genres tracked by Magellan AI increased their average ad load. The biggest increase was among Leisure podcasts (+0.19%) while the biggest decrease came among Fiction podcasts (-1.69%).
For the second time, over a third (36%) of the ads detected were 30-seconds in length, continuing a trend that Magellan AI says parallels an increase in produced ads.
Even with ad budgets under pressure, the quarterly report shows a lot of brands are still making their move into podcasting. Magellan AI says it detected 1,878 new brands for the first time during the third quarter. Their spending was not huge – the average new brand spent $18,000 during Q3 – but in some cases it could open the door to much bigger investment in future quarters.
A snapshot of some of the industries that are spending the most on podcasting shows where some of the infusion of new brands is coming from. For instance, the business services and software segment had 653 different brands active during third quarter. That included 154 new brands. And the television and film segment had 404 brands active, including 123 new brands.
Magellan AI says Sports podcasts continued to be the most popular destination for new brands with one in five turning on shows in that genre. About 10% of brands new to the market included News podcasts in their plans, while the number of new brands including Society & Culture podcasts in their plans dropped from 325 in Q2 to 232 in Q3. Overall, Magellan AI says new advertisers typically placed mid-roll ads with spots than ran an average of 54-seconds.
Magellan AI’s quarterly update is based on data it collated from more than 10,000 brands that placed ads across 76,000 episodes during the second quarter. Its proprietary model is used to estimate advertising spend. Download a copy of Magellan AI’s Quarterly Podcast Advertising Benchmark Report HERE.
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