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Podcast advertising is exploding, and the third annual report on the subject from the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers shows how big that explosion continues to be.
Podcast advertising reached $479 million in the U.S. last year, according to the Podcast Advertising Revenue Study – a 53 percent increase over 2017’s $314 million. The 2017 figure itself was 86% higher than in 2016. By 2021, the report estimates, podcasting ads will more than double, hitting a billion dollars.
“Brand safe environment”
Similarly, the study found that 2018 self-reported revenues from leading podcast companies jumped 34 percent over 2017, to $345 million. The data for the study was compiled from self-reported info submitted by nearly two dozen companies that generate revenue from podcast ads in the U.S.
The key driver to the continued boom in podcast ads is the popularity of this form of content, with podcast listening rising by seven percent last year. More than half of the population over 12 years old has listened to podcasts, and the ads score highly for engagement and responsiveness.
That growth in listening is also fueled by new opportunities that go beyond individuals wearing earplugs attached to a mobile digital audio playback device like a smartphone. Cars and smart speakers, for instance, are also becoming part of the playback gear for podcasts.
“Podcast storytelling is deeply engaging and provides marketers with a brand safe environment that enhances the appeal to advertisers,”
IAB Executive Vice President for Industry Initiatives Anna Bager said in a statement.
“Baked-in ads” still the majority
On the ad side, programmatic buying and dynamically inserted ads are increasingly becoming part of the podcast ad environment. Although “baked-in ads” recorded as part of the podcast still represent the majority of podcast ads delivered in the U.S. last year, the report noted that dynamically inserted ads rose from 41.7% to 48.8%.
Brand awareness and branded content ads are increasing as a percentage of total ads, and direct response ads are shrinking, but direct response ads still make up 51.6% of the total. Host-read ads are still the dominant form, representing two-thirds of all podcast ads.
The report was sponsored by 17 podcast makers, ad providers and distributors, including iHeartMedia, WarnerMedia, Adswizz and Wondery.