US podcast advertising revenue leapt to $314 million in 2017, a rise of 86 percent over $169 million in 2016, according to stats released this week by the Interactive Advertising Bureau (IAB). The research predicts even stronger returns in the coming years, with forecasts that podcast revenue will surge to $659 million by 2020, a triple-digit 110 percent hike from 2017.
Of the 14 podcast content genres measured, the top four generated more than half of the advertising revenue in 2017:
- Arts/Entertainment (17%)
- Technology (15%)
- News/Politics/Current Events (13%)
- Business (11%)
Regarding brand advertisers allocating budgets to podcasts, financial services took the lead position with an 18 percent share, followed by direct-to-consumer retailers, which accounted for 16 percent, and arts and entertainment, at 13 percent.
As for the ad production itself, host-read ads were cited as the preferred ad type, representing more than two-thirds of ads in 2017. Quite rightly, brand advertisers feel that involvement with the hosts themselves has far more impact than campaigns using hired voice over artists, not least in terms of engagement and subject matter authority.
Branded podcasts grew from 1.5 percent to 6.5 percent of all ad revenue between 2016 and 2017, displaying an increasing industry reliance on sponsorship and heavy brand involvement.
Commenting on the findings, Anna Bager, Exec VP, Industry Initiatives, IAB, said, “These strong numbers speak to advertisers’ increasing recognition that podcasts provide a powerful platform for reaching and engaging audiences,” before adding, “Advertisers that range from traditional financial services to direct brand retailers are tapping into the medium’s highly engaged audience.”
David Silverman, a Partner at PwC US who jointly conducted the research said, “The growing trend toward ‘anywhere and everywhere’ media engagement has created tremendous opportunity for digital media, of which podcasting is a significant component. Whether at home on a smart speaker, at work on a PC, or somewhere in between on a mobile device, more and more Americans are listening while they live, providing a robust podcast platform where advertisers can connect with today’s consumers.”
The findings underpin the view that podcasts remain an untapped opportunity, especially for small to medium sized publishers with limited resources. Indeed, whilst they demand short bursts of labour intensive production, podcasting remains significantly cheaper to produce compared to movies, TV shows, and even scheduled talk radio programming. With podcast ad revenues set to double by 2020, the IAB findings make a compelling case for publishers to offer podcasts as yet another diversified revenue stream.
Click to download the The IAB Podcast Revenue Study.