Marketers add more podcasts to the mix
Total spending on podcast ads rose 86% last year, but the format remains relatively niche
Marketers are starting to tune in to the growing appetite for podcasting.
While podcasting remains a relatively small market, audio firms have made progress in tapping ad budgets for brand advertising, according to a new report from the Interactive Advertising Bureau and accounting firm PricewaterhouseCoopers LLP.
The report, which was released Monday, said advertisers spent an estimated $313.9 million ($407.5 million Canadian) on podcast ads in 2017, an increase of 86 per cent from about $169.1 million ($219.5 million Canadian) a year earlier.
That is still modest compared with other advertising channels. Marketers will spend about $69.87 billion ($90.6 bil- lion Canadian) on TV advertising in the U.S. in 2018, according to estimates from eMarketer. It projects the total U.S. market for digital advertising in 2018 will be about $107.3 billion ($139.3 billion Canadian), with Google and Facebook reeling in an estimated $60.92 billion ($79 billion Canadian).
Much of the growth for podcasting came from brandawareness ads and branded content, which comprised 35.7 per cent of ad spending in 2017, compared with 26.9 per cent in 2016, according to the report.
That is significant, in part, because the lack of independently gathered listening data has hampered podcasters’ ability to persuade marketers to run high-dollar brand-advertising campaigns. Instead, marketers have largely opted to buy direct-response advertising, or advertising that compels listeners to take a measurable action in response to the ad — entering a coupon code, for example.
The growth in podcast advertising can be attributed to sev- eral different factors, said Anna Bager, executive vice president of industry initiatives at IAB. Marketers are growing increasingly familiar with the medium, she said, and smart speakers like Amazon Echo and Google Home have helped expand the podcast audience, making audio advertising more valuable. Marketers are also getting used to purchasing podcast ads in advance, with 38 per cent of podcast ad spending coming from annual upfront buys, she said.
“Advertisers are making longterm commitments based on the effectiveness of the campaigns,” Ms. Bager said.
The report projects further growth. By 2020, it predicts marketers will more than double their spending on podcasts from 2017 to $659 million ($855.4 million). Meanwhile, spending on some other, moreestablished channels, such as TV, is decreasing. TV-ad spending will fall by about 0.5 per cent in 2018, according to estimates from eMarketer.