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IABPwC US Podcast Advertising Market Size 2015 2019 Aug2020As the number of US adults listening to podcasts continues to grow, so too does the opportunity for advertisers to use the popular medium. According to the IAB and PwC’s latest Podcast Advertising Revenue Study [download page], 2019 saw a 48% increase in the estimated total market revenue for podcast advertising year-over-year (y-o-y), with growth continuing to be forecast for 2020 even among the impacts of COVID-19.

Here are 5 points to take away from the study on the nature and future of podcast ad revenue.

1. Revenue Grows Once Again

Podcast ad revenues – both self-reported (by surveyed podcast publishers) and in estimated total – rose once again last year. The former enjoyed an increase of 46% y-o-y, from $344.7 million in 2018 to $503.9 million last year, while total market estimates grew 48% from $479.1 in 2018, reaching $708.1 million – more than double 2017’s figure.

Not only that, but more revenue was generated in Q4 than any other quarter for the 5th consecutive year. While each quarter has seen y-o-y growth since 2015, in 2019 some 31% of self-reported podcast ad revenue was generated in Q4 ($158 million), compared to 26% in Q3 ($129 million), 24% in Q2 ($123 million) and 19% in Q1 ($94 million).

2. COVID-19 Impacts Revenue Forecasts and Messaging

Pre-COVID-19, self-reported revenue was forecast to increase by 29.6% in 2020. However, an additional post-pandemic study of 17 of the 19 podcast companies originally surveyed highlighted an expected 11.5% revenue decline due to the crisis. As such, growth is still expected but at a revised rate of 14.7%, around half of the original expectation.

According to this COVID-19 impact study, the effect of the pandemic on podcast companies has taken a variety of forms. Most prevalent of these is canceled campaigns, which about one-third of respondents cited as a top reason for decreased revenue projections in 2020. Also mentioned were paused campaigns that are currently live, a lower volume of incoming RFPs, and CPMs having decreased.

The vast majority of podcast companies surveyed have seen an increase in mission-based and cause-related marketing in creative messaging, as well as a decrease in performance marketing.

3. News and Comedy Genres Dominate Revenue Share

Respondents indicated that several content genres, derived from Apple Podcast categories, accounted for a large share of podcast ad revenues in 2019. News takes the lead, representing 22% share of revenues, followed by Comedy (17%), Society & Culture (13%) and Business (11%). Podcast genres with the lowest share of ad revenues were TV & Film (2%) and Music (1%).

In terms of industry categories, DTC Retail (22%) and Financial Services (16%) continued to account for the largest share of podcast ad investments.

4. Annual Buys Double in 2019 to Take Highest Revenue Share

In 2018, quarterly buys accounted for the largest revenue share (38%) among buy types, followed by remnant/transactional/scattered buys (34%) and annual buys (24%). In the latest data covering 2019, though, annual buys doubled to nearly half (47%) of revenues, while scattered buys declined to 21% of overall buys.

Campaign types also saw some changes, though less dramatic. In both 2018 and 2019, direct response campaigns generated the majority of revenue (52% and 54%, respectively), followed by brand awareness (38% and 42%) and branded content (10% and 3%).

5. Mid-Roll, Host-Read Ads Are Preferred

For the second year running, host-read was the preferred ad type, accounting for two-thirds (66%) of podcast ad revenue in 2019. Announcer-read or pre-produced ads remained the next-most favored type (27%) but lost some of this share to supplied ads (6%).

Other areas studied in the report include placement, in which mid-roll ads generated the majority (74%) of ad revenues in 2019, and delivery mechanism, which highlighted the split in revenue share between dynamically inserted ads (48%) and edited-in/baked-in ads 52% for the second consecutive year.

Read more about podcast advertising revenues in the full report here.

About the Data: Results are based on marketing sizing estimates from the IAB and PwC compiled using survey and other quantitative data.

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