Brands are spending even more money advertising within podcasts, according to a new study published by ad-industry body the IAB and consultancy firm PwC. It claims that US podcast advertising spend grew by 86% to $314m in 2017, and makes the bullish prediction that these revenues will grow to $659m by 2020.
Arts and Entertainment podcasts were the biggest category in terms of ad revenues, accounting for 17% of the total – around $53.4m – ahead of technology (15%), news/politics (13%) and business (11%). Arts and entertainment brands also accounted for 13% of the spending within podcasts, behind only financial services (18%) and direct-to-consumer retailers (16%).
“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,” suggested PwC partner David Silverman.
While this all sounds like good news for music-streaming companies like Spotify and Pandora, who are doing more with podcasts, it’s good to keep some perspective: Spotify generated $1.36bn of revenues in the first quarter of 2018 alone (albeit globally, not just in the US). However, both of these streaming services have spoken publicly about their podcast ambitions.
“We offer a growing number of podcasts, which have gained significant traction with users, creators, brands, and advertisers,” claimed Spotify in its DPO prospectus earlier this year, quoting figures from Ovum suggesting that there were 484 million podcast listeners globally by the end of 2017. “This engagement presents a significant opportunity for Spotify.”
Pandora, meanwhile, is working on its ‘Podcast Genome Project’ – a companion to its existing work categorising music. “In the car, 80 percent of listening is music, while 20 percent is other stuff,” said its CEO Roger Lynch in April. “As a service, if you don’t have that 20 percent, it doesn’t mean you capture the 80 percent, because then people will just stay on their FM Radios. But if you can create audio content for people that gets packaged with the music content in a way that doesn’t give them a reason to go back to that FM dial, then you capture much more than just the spoken word.”