According to a report by the IAB and PwC, the US podcast marketplace will surpass $1bn in 2021. Marketers spent $479m on podcasts in 2018 and $314 million in 2017.
DTC and financial brands were jointly responsible for 43% of all podcast revenues, the former accounting for 22% and finance 21%. They were joined by B2B (14%), arts and education (10%), and telecommunications (7%) to make up the five sectors representing nearly three-quarters of the nine-digit spend.
The report found that while the use of dynamically-inserted ads increased from 41.7% to 48.8%, ‘baked in’ ads that are encoded into the podcast’s audio file still account for 51.2% of all podcast advertising.
Host-read ads proved to be the preferred type of communication, accounting for 63.3% of ads. And although direct response campaigns (like those that that prompt listeners to apply a trackable discount code on a retail site) are still popular (51.6% of ads studied), brands are now experimenting more than ever before with brand awareness ads (38.2%) and branded content (10.1%).
“The steady climb in revenues for the podcast ad market underscores the value of the platform’s flexibility and reach,” said David Silverman, a partner at PwC US. “Consumers are listening to podcasts wherever and whenever – from their morning workout to their evening commute – making it appealing to brands that want to reach today’s audiences.”
Anna Bager, executive vice-president of Industry Initiatives at the IAB, added: "Today’s technology has created an audio-first environment where audio is the preferred interaction — and consumers have put podcasts front-and-center. Podcast storytelling is deeply engaging and provides marketers with a brand safe environment that enhances the appeal to advertisers.”
The study was sponsored by a number of media and audio tech brands, including ABC Radio, AudioBoom, ESPN, Gimlet, iHeartMedia and Wondery.
The IAB and PwC compiled a database of the podcast advertising revenue generators presumed to make up a significant part of the market.
From there, methods branched into the forms of a quantitative mailing survey sent to podcast publishers and ad networks, a podcast advertising market sizing and the collection of factors such as campaign type, pricing model, podcast program genre, advertisement type and business category.
Additional reporting by Katie Deighton