Experts say podcast listeners are a sticky audience, and the content offers more flexible ad formats. That might explain why the podcast advertising spend has grown from $806 million in 2018 globally to $2.6 billion this year, according to research firm WARC. In 2023, it is projected to reach nearly $2.8 billion globally, accounting for 26.8% of all online audio investments. By comparison, global ad investments in radio will drop an estimated 2.4% next year.

“Most people are running or driving or doing something while listening, and I don’t think they’re skipping through the ads,” said Nadia Gonzalez, CMO at Scibids. “Audio ads are a strong format at the moment.”

The variety in ad formats and devices to reach consumers is helping drive interest to this medium – from earbuds and speakers to smart home devices and car listening. The podcast format is effective, especially if you have an audience that likes a show or its creator, said James McDonald, director of data, intelligence and forecasting at WARC.

Many shows integrate host-read ads, for instance, which currently account for the largest share of ad spend in audio, according to WARC. One downside to host-read content is the fact that it’s not easily scalable. But to believers in the medium, that’s not an obstacle.

“Listeners have been found to not only understand but accept the value exchange of podcast advertising when it supports the content, and this can be a potent draw for brands as audiences often have a deep engagement and affinity with shows,” McDonald said.

And with more devices for listening available, more adoption will lead to newer audio ad formats, such as shoppable or interactive ads. Paul Kelly, chief revenue officer of A Million Ads, believes podcasting as an ad-supported medium is “currently under-monetized.”

“Adding to cart [or] saving to a bookmarking list creates an entirely net new advertising surface for those moments where we are not actively consuming media,” Kelly said.

In fact, independent agency Ocean Media recently started a new podcasting team as more of its clients expand into that media. CEO Jay Langan said streaming and podcasting are by far their biggest areas of growth now. Ocean Media worked with car platform Vroom, for instance, aiming for a younger, tech-savvy audience with new media channels. After investing in a mix of podcasts and talk shows, such as “First Things First” and “Conan O’Brien,” the brand achieved 10% more efficiency in its upper funnel metrics and 43% more efficiency in the lower funnel.

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Source:: Digiday

Author: Aaron