When it comes to advertising, podcasts hold a big business advantage against other types of media: their conversion rates.
Podcasts maintain audiences captive and segmented making it easier for brands to hit their target audience. Plus, the intimate relationship created between the podcast host and their listeners builds credibility for products and services.
Is Podcasting Ad Revenue rising?
Consumer confidence translates into sales, and ultimately statistics, and numbers. According to The Interactive Advertising Bureau (IAB), podcast ad revenue in the U.S. will hit $2 Billion by 2023. Podcast revenue grew 19% in 2020 to hit $842M, despite the pandemic. Up from $708M in 2019 and $479M in 2018.
It’s no wonder why big companies have been placing big bets on the podcasting world. There’s Amazon’s purchase of Wondery or Spotify acquiring the Australia-based platform Whooshkaa. Plus the hosting and ad company Megaphone, and more recently, the podcast discovery platform Podz.
The efforts to facilitate ad insertion into podcasts have been a top priority inside the industry.
Some winner deals were also made last year. Beginning with Joe Rogan’s exclusive, multiyear deal with Spotify, Michelle Obama’s debut podcast, and Meghan and Harry’s mysterious but exciting show deal.
Diversify your ads the right way
According to the Podsights Benchmark Report, there is a sweet spot when it comes to frequency and exposure to ads from podcast listeners.
According to Matt Drengler, Director of Partnerships at Podsights, ads that run on multiple podcasts get better conversion rates than if used in only one show or network. He suggests that the sweet spot for average frequency (the number of times someone listens to an ad) remain 2 to 3.
This same study shows that mid-rolls (advertising in the middle of episodes) continue to have the best performance.
Advertisers who use a combination of mid-rolls and post-roll ads have the highest conversion rates.
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Some big league examples
Podcast listeners really come through when it comes to purchasing. In the New York Times’ 2020 Earnings Conference Call, they stated a $36 million revenue in podcast advertising. A huge increase from the $7 million earned in 2019 after they purchased Serial and the rights to sell advertising against This American Life.
The New York Times digital advertising declined 2% in 2021. But podcasting was the only sector that grew.
Even during the pandemic, listener behavior has shown that podcasts are still a preferred medium.
Yes, consumer habits have shifted since a good part of the population doesn’t commute to work or school anymore. But people have found other times to listen to their favorite shows. Plus, ear time is still a far less competitive and crowded arena than screen time. One of the best assets of podcasts is their versatility.
Podcast advertising is definitely not as niche as it was back in 2012. Today, advertising is not only easy to do but also extremely profitable when aimed at the right target audience. It’s all about finding the best alliances for your brand and creating a suitable marketing strategy.
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