As its market size continues to grow, podcast advertising is currently being used by one-third (34%) of respondents to a new study from Advertiser Perceptions commissioned by Cumulus Media / Westwood One. Intention for and consideration of podcast advertising is on the rise, despite a brief period of difficulty in the wake of the COVID-19 pandemic.
The latest figures from the study of agencies and advertisers involved in digital, mobile and radio advertising, taken annually since 2015, shows podcast advertising consideration to be at an all-time high. Where just 18% of respondents were likely to consider podcast advertising in the next 6 months in 2015, almost half (46%) said the same in July 2020, up from 42% the year prior.
And, intent to advertise in podcasts has grown, in turn. In a similar trend, while just 10% of respondents claimed that they were likely to actually advertise in podcasts in the coming 6 months in 2015, 37% said the same in July this year.
As with podcast consideration, this year’s uptick follows a slight dip last year.
Not only that, but agency/advertiser interest is significant at every stage of the podcast ad purchase funnel. At the top of the funnel, two-thirds (66%) of respondents report having discussed podcast advertising for potential media investment. A further 46% definitely would consider advertising in podcasts in the next 6 months, with almost 4 in 10 (37%) saying they definitely would advertise in podcasts in the coming 6 months.
A full 34% currently advertise in podcasts, though this figure is down from the 39% of respondents who were advertising in podcasts in 2019’s study, potentially as a result of the pandemic.
Podcast Ads Bounce Back After Pandemic
Podcast advertising was not entirely unscathed by the pandemic, as the report found through a partnership with Magellan Al. After seeing a record number of unique advertisers in March (682), April saw this figure drop to 603, with the number of average ads per podcast also decreasing (2.9 to 2.7) as did the total number of podcast advertising detections (4,533 to 3,969).
However, it would appear that podcast advertising has largely been able to bounce back during this time of uncertainty. Between April and June 2020, the average number of ads per podcast has risen by 9%, the number of unique advertisers by 10% and total podcast advertising detections by 8%.
And, notwithstanding the pandemic, the landscape of the type of ads being detected has been evolving since Q4 2018. In the top 400 national podcasts in Q4 2018, the majority (66%) of ads were direct response, with one quarter (25%) classified as brand advertising and 9% as ‘other’. In the latest figures from Q2 2020, brand advertising has increased its share to now account for nearly 4 in 10 (38%) podcast ads. Direct response ads have maintained their majority (54%), though it has slimmed.
What Does the Future Hold for Podcast Ads?
In other research from eMarketer, it appears likely that things will continue to look up for podcast advertising. Between 2020 and 2024, podcast ad spending is forecast to increase from $780 million to $1.61 billion, with its percentage of total digital radio ad spending also expected to rise from 21% to 29%.
However, the report does forecast a slowdown in growth rates: while 2021’s spend of $1.13 billion could represent a 44.9% year-over-year change, in 2024 this will have reduced to an 8.5% change from the previous year.
Finally, it’s worth noting new forecasts from PwC, which come to a similar conclusion, with podcast advertising in the US more than doubling from an estimated $764 million this year to $1.67 billion in 2024.