Podcast advertising is growing and maturing fast. Accordingly, the IAB has published its first supplemental half-year update of its annual Podcast Advertising Revenue Study franchise.
This mid-cycle addition follows the regular 2022 edition released in May 2023 (RAIN coverage HERE).” It is titled “U.S. Podcast Advertising Revenue Study 2023” — which could lead to some naming confusion next spring when we would expect a report with that title.
Nonetheless interesting for that, this new bulletin (co-produced as always with PwC), sets out two executive summary points with detail:
Podcasting is Adopting Practices Prevalent in Other Digital Channels
- As the majority of podcast ad revenues shift from direct response to brand building (revenue share:
48% in 2021 to 61% in 2023), it is evident that the channel can deliver on buyer KPIs across the funnel. - Meeting buyers’ needs for agile ad delivery, dynamic ad insertion (DAI) now represents more than 90%
of ad revenues as its share has nearly doubled in the last 3 years. - As publishers recognize buyer demand for brand safety and suitability solutions, usage has nearly
doubled YoY (brand safety: 44% to 69%; brand suitability: 33% to 62%).
For Continued Ad Revenue Growth, Areas of Opportunity Need to be Addressed
- Although programmatic has shown significant growth (+5x from 2021 to 2023), its share of podcast
revenue lags far behind that of other digital media channels (11% vs. 87%)*. - Podcast ad inventory remains largely show-specific, with sophisticated, audience-based buys used
heavily in other media channels only at ~25% share YoY. - With video-enabled podcasts representing less than 10% of revenues, there is a clear opportunity to
expand engagement from sound to sight.
We learn that podcasting grew more than twice as fast as total internet ad revenue — a remarkable metric. The IAB projects estimated dollar and percentage growth through the next few years, leading up to an estimated $4-billion in 2025:
The report emphasizes an important shift: The majority of ad revenue is shifting from direct response (typically, host-read ad copy with a measurable call to action) to brand building (measuring subjective indicators like brand recall, awareness, and intent). That evolutionary shift is charted out like this:
The dark rectangles atop each bar show declining DR (direct response ads), as brand values (in red) grow their shares of campaign type.
Alongside this trend, naturally enough, dynamically inserted ads (DAI) have accomplished a near-total takeover as baked-in ads nearly disappear:
The report contains more data about the evolutionary shift toward brand safety and suitability tactics, toward which podcast ad buyers are trending. The information includes trending publisher-adopted solutions for campaign customizing.
Moving to traditional targeting types such as geo-targeting, content genre, and audience demo, we see an interesting mix of execution and planning on the buyer side:
Along with all this, not unexpectedly, “Buyers are increasingly using a wide range of measurement solutions commonly used with other digital channels,” according to the IAB. It is part of an overall maturation of the channel.
Part 2 coverage of this important and extensive research to come.
