Podcast Advertising Growing at Unprecedented Rates
Podcasts have seen an exponential growth rate in the last decade, and expert analyses show no signs of slowing down. There is a podcast about nearly anything imaginable now, and companies and influencers alike are riding the wave. Health and wellness, entertainment and business are among the fastest growing topics. Riding the coattails of this booming industry is another that thrives on social media: advertising. Brands of all industries are seizing the opportunity to reach a wide variety of listeners in a short time. So exactly how much growth are we talking about? And is this growth expected to continue?
RECENT INDUSTRY GROWTH
A study conducted by the Interactive Advertising Bureau examined industry trends for podcast advertising in 2021, and the results are stunning. Podcast ad revenues surpassed $1 billion in 2021; a 72% increase from 2020. The IAB study predicts this growth to compound and multiply. By 2024, industry revenue is expected to be upwards of $4 billion.
This growth is benefiting podcasters and brands alike, as we’ve seen both the amount of podcasters and brands increase rapidly.
DIVERSITY AMONG GENRES
The nature of the podcasting industry allows brands to target specific audiences and increase their conversion rates. Although certain genres have attracted more popularity than others the last few years, there are dozens of genres which are becoming increasingly profitable. Health and wellness has seen steady growth as of late. The ability for trainers, dieticians and fitness content creators to easily spread information to their clients and followers are propelling this industry forward. Financial services has also seen growth. Independent financial advisors, especially within the crypto sector, have become a significant component of the industry within the podcast realm. Regardless of the genre, there is money to be made in the near future advertising on podcasts. Targeting advertising to topics that align with their industry and focusing on high conversion ratings is allowing brands to generate substantial revenue from podcast advertising.
Don’t Miss Out
The influx of new podcasters to the market is expanding the reach of the advertising industry. Brands from all corners of the market are flooding in, which gives rise to new subcategories in which revenue is generated through advertising. According to the same study by the IAB, the “other” category of ad revenue was responsible for the largest market share in 2021: at 28%.
Over a quarter of the podcast advertising revenue generated in 2021 was defined as “other.” Although this may seem odd, it is great for the market. Brands and podcasters from every category and industry are able to profit from one another and the ecosystem thrives.
Accessibility and frequency: a bonus
Oftentimes podcasts are recorded and posted on a schedule. Weekly or biweekly postings allow listeners to stay up to date, as well as providing continuous traffic. The IAB study found that 70% of industry revenue in 2021 came from weekly or biweekly podcasts; a significant portion. The ability to frequently and easily provide content for listeners gives podcasters steady revenue streams, and this helps brands too.
Because podcasts are consumed through digital streaming platforms, brands have the ability to create one-click ads that allow consumers to be taken directly to their websites, social media pages and more. The frequency of postings combined with the easy accessibility of podcast ads creates high conversion rates. And high conversion rates means more bang for your buck for brands, which is why the podcast sector of the advertising industry is booming.
Putting knowledge to use
The IAB 2021 U.S. Podcast Advertising Revenue Study provides valuable and hopeful projections for the future, but how is this knowledge being put to use? Brands are using the opportunity to create short video ads that provide high ROI. The IAB study gives recommendations for how to move forward. They describe the situation, “as the industry increasingly uses automation solutions, the need to continue to deliver strong resonance with consumers and thus value for advertisers is paramount. Now that the majority of host-read and announcer-read ads are dynamically inserted, advertisers get the best of both worlds with podcast advertising: authenticity of messaging with the scalability/flexibility of automated buying.”