Podcasters continue to bask in the glow of growth, even in the crowded media landscape. The IAB said podcasting’s 26% revenue increase last year was bigger than the 11% growth rate it tracked for digital media overall.
“We're seeing growth be the name of the game all over the place,” said Patrick Egan, Director of Research and Insights at Disqo. “It continues to have momentum that we don’t see in other digital channels.” Podcasting is benefiting from larger shifts in audio consumption. Egan said during a webinar last week that about two-thirds of U.S. adults are listening to digital audio each month, according to the customer experience platform’s recent research into podcasts.
But for the industry to grow to its projected $3.5 billion in revenue by 2026, Acast Global Head of Ad Innovation Eli Dimitroulakos thinks how buyers approach podcasting will need to evolve. “There has been a historical tendency towards buying podcasts in a way that is not as scalable, and with the growth of listenership, brands are going to lean more into scale,” she said. Dimitroulakos has already noticed more brands looking at attribution tools, which she thinks will help open podcasting to larger budgets. “Hopefully, what we'll see with that is the tendency to decrease the investment gap in podcasts, because although it is the fastest growing medium, the investments are far smaller,” she said.
David McManus, Podcast Project Manager at The Atlantic, said an “untapped element” that he sees available to podcasters is the loyalty that listeners have, as they turn up for episodes on a daily or weekly basis. He thinks that allows brands to deepen their relationship with listeners in a way that other media don’t allow.
“We haven't tapped into that as fully as we can, and a lot of marketers and advertisers are really just starting to figure out the potential there,” McManus said.
Working in the industry’s favor, at least when it comes to pitching marketers, is Disqo’s research confirming podcast audiences tend to be wealthier – over-indexing for an income above $125,000 by eight points. Podcast listeners also over-index in the 25-54 age group that advertisers care most about.
Yet Dimitroulakos said that Acast also sees an opportunity in going deeper and using its AI-powered programmatic platform to help funnel ad dollars to smaller shows, and those appealing to more diverse audiences.
“Newer listeners tend to be 35% more likely to be Black or Hispanic, and so that is a growing community in our eyes. And they often get overlooked because those hosts that attract those audiences aren't the largest in size,” she said. “Our job is to help bridge the gap between the two.”
Disqo’s research finds that a third of listeners overall say they pay more attention to podcast ads compared to those in other media, while a quarter say they pay less attention. The research also finds that podcast ads are viewed more favorably. Egan calls that a “powerful demonstration” that podcasting does a better job at cutting through media clutter.
“Advertisers can get caught sometimes with a personal bias and thinking listeners don't really listen to the show or know the hosts,” McManus said. “But it's important to realize that if someone is a regular listener to that show, then that host is as important to them and has a big impact.”
Dimitroulakos agrees that advertisers’ preconceived notions are the “number one obstacle” when it comes to increasing campaign size. The result is Acast research has revealed 44% of investments go to the top 500 English-language shows. That pushes up CPMs on those podcasts, while also meaning advertisers are missing out on 88% of the addressable audiences available to them. “There is also a diminishing return when you're reaching the same person with the same host all the time,” Dimitroulakos said.
McManus said that too many marketers are also focused on the “last click attribution mindset” which he thinks can be “really detrimental to leveraging the potential of podcasts.” He said it is why The Atlantic turned to third-party vendors like Disqo to help get a better understanding for advertisers about how their ads are performing.
Beyond advertising, McManus said podcast discoverability is something that the industry is still coming to grips with. Disqo research shows 52% of listeners still rely on friends and family to find new shows, with 47% relying on social media. It also says 16% pick up on new podcasts from ads on the radio or from ads aired during other podcasts.
Download Disqo’s “Proving the Power of Podcast Ads” study HERE.