In the pre-pandemic world, the time that most people turned to a podcast was during their morning or evening commute, so when the pandemic hit, the initial assumption was that we would see a decrease in audiences. In fact, the opposite was true. No longer confined to rush hour, consumers are turning to podcasts more than ever; as a source of news, entertainment and to generally keep them company during the working day in isolation.
It’s therefore not surprising that investment is up, with increased M&A activities in this space and several major publishers and tech platforms investing in podcast-related businesses. But what makes this sector so lucrative for publishers, and what changes are happening that makes it more appealing to advertisers?
More content and bigger audiences
Global lockdown created a unique opportunity for podcast creators, giving them more time to create new content. From February to March 2020 alone, we saw a 22% increase in new podcasts created using the Simplecast platform, and this continued to grow exponentially throughout the rest of 2020.
Creative job roles were hit particularly hard during the pandemic with the closure of theatres, cancellation of concerts and the lack of tv and movie production. This gave a unique opportunity for creatives to either start a podcast or increase the number of episodes they were producing, with 36% of podcast producers planning to up their episodes, whilst 59% spent the time trying to grow their show and its audience.
All-day, every day
Historically podcast consumption peak hours would be from 7am-9 am and then again from 5 pm-6 pm. But throughout 2020, we saw these hours change dramatically as people got used to working from home, and work-life balance became more fluid. By October, the peak window had changed and massively increased, to now cover 8 am-8 pm and Nielsen reported that by August, 73% of consumers listened to audio while working from home.
All of this shows that podcasts are no longer a way to communicate with audiences during a limited timeframe during the working day. They have become a part of our everyday life, and a lucrative opportunity for both publishers and advertisers looking to reach these audiences.
When reaching audiences has become even more challenging in a post cookie world, advertisers and publishers have needed to look at new ways to target their advertising. With audio contextual targeting, when done right, advertisers can choose which segments to include or exclude at a podcast series or episode level. This is definitely in demand, with 27% of surveyed advertisers and 30% of publishers ranking it as one of their top requests.
Increase in advertising opportunities
Advertising opportunities are allowing publishers to monetise these platforms more effectively than ever, with an 80% increase in podcast ad impressions throughout 2020. But, one of the main challenges has been making audio advertising a measurable investment. The introduction of programmatic delivery and accurate audience segmentation is making this far more achievable.
Advertisers ranked behavioural segments and contextual targeting as their main priorities when it came to podcast advertising, with 48% saying that the ability to target away from specific content is very important. Where metrics are concerned, 94% of advertisers ranked conversion rates as most important, with sales lift and intention to buy also key.
Agencies and advertisers already including digital audio in their media mix favour programmatic purchasing for digital media, yet only 23% of digital audio buys are done this way today. That share is even lower for podcast advertising, for which automated buying is still nascent. As the technology becomes more advanced, automated buying will represent a huge growth opportunity for podcast advertising and 60% of surveyed advertisers are planning to purchase digital audio and/or podcasts programmatically in the next 12 months.
60% of surveyed advertisers are planning to purchase digital audio and/or podcasts programmatically in the next 12 monthsBrieuc Verwilghen, Vice President Supply Partnerships, EMEA & APAC, AdsWizz
What does the future hold?
We found that just under half of publishers are currently making available their podcast content for programmatic advertising, with 63% planning to do so in the next 12 months. We know that the demand is there from advertisers, so expect serious growth in the sector in 2021.
We will also start to see an increase in the type of advertising that is automated. Today, the majority (82%) of publishers say that their content is being monetised by sponsorships or host-read ads. It’s a hugely effective method because it feels like a part of the content and there’s a built-in trust factor. But, it is labour intensive and can become irrelevant very quickly so there is a demand from podcasters and publishers to automate this content. Enabling this automatically would be a game-changer for podcaster advertising, provided that technology is capable of addressing the challenges related to brand control and brand safety .
Advancements in podcast advertising will continue to increase efficiency while allowing advertisers to reach huge audiences daily. We do however need to remember the responsibility we have as an industry to listeners, ensuring that the content and the advertising alongside it remains relevant and authentic in order to preserve the listener experience and intimacy of podcast listening. Ultimately, consumers are there to listen to the content, and this must remain at the heart of everything.
Vice President Supply Partnerships,
EMEA & APAC, AdsWizz
AdsWizz is the underlying monetization solution for well-known music platforms, podcasts and broadcasting groups worldwide. Through dynamic ad insertion, advanced programmatic platforms, and innovative audio formats, AdsWizz efficiently connects buyers and sellers for digital audio and podcast advertising, and offers industry-leading podcast hosting and analytics via Simplecast. AdsWizz is owned by SiriusXM, and is headquartered in San Mateo, California, with a Technology Development Hub in Bucharest, Romania.