Although the pandemic has revolutionized many of our media consumption habits over the past 18 months, one thing has become increasingly clear: podcasts are not going anywhere. Even as new work-from-home regimes supplanted daily commutes at the height of the pandemic, audio programming continued to find its way into the ears of its consumers.
According to The Infinite Dial, an annual report released by Edison Research and Triton Digital earlier this year, over eighty million Americans ages 12 and up (roughly 28% of the U.S. population) are weekly podcast listeners. That’s a 17% increase in listenership, which is sizable compared to the 9% increase recorded from 2019 to 2020.
“Let me be the first to admit — the increase from 24% to 28% year-over-year did surprise me,” said Tom Webster, SVP of Edison Research and co-author of the report. “In a year in which absolutely nothing was normal, podcasting grew even more than it had the year before.”
Once society enters a truly post-pandemic era, Edison Research’s Webster is confident that listenership will remain loyal, particularly with the resurgence of the daily commute. “Habits are habits. And when people go back to the office, we’re going to see a lot of these habits stick.”
A formidable playing field for ad spending
Advertisers are banking on this habit retention and focused audience attention. The podcast advertising market continues to rise steadily, quarter after quarter. By next year, the global podcasting industry is anticipated to reach $1.6 billion.
While leading podcast providers like Spotify have reported less users than they projected for the second quarter of 2021, their advertising sales are up 110% from last year. Congruently, their ad revenue has jumped from 10% to 12% in the past 12 months.
“It’s clear to me that the days of our ad business accounting for less than 10% of our total revenue are behind us. I expect ads to grow to be a substantial part of our revenue mix,” Spotify CEO Dan Ek told investors in a conference call last month.
According to research conducted by Magellan AI, podcast spending in the second quarter of 2021 rose by a sizable 22% from the first quarter of this year, a 40% increase year-after-year. It’s worth noting that, according to Magellan AI, sports podcasts added the most new advertisers in Q2 than any other genre.
Which brands packed the biggest ad-spend punch? For longtime podcast listeners, direct-to-consumer brands like HelloFresh, Casper Mattresses, or BetterHelp may come to mind. Although, in recent months, larger corporations have risen to the top of the list of biggest ad spenders.
What makes the podcasts so valuable to advertisers, especially the behemoth brands that seemed to have gone “all in” on podcast advertising in recent months? (In particular, what’s in it for those like Amazon or Geico, which seemingly have no lack of demand for their products/services?)
“When you look at that [podcasting] audience, that audience is typically more affluent, more educated, has a higher disposable income. So, it’s very attractive to advertisers,” according to Damian Radcliffe, digital media analyst and professor of Journalism at the University of Oregon. “The other big factor here is that podcast advertising tends to be pretty limited & there’s a value in that exclusivity for podcasters which is quite appealing.”
A season of exclusive brand extensions
As the podcast industry continues to rise in listenership and sponsorship, we can also expect a growing wave of corporate partnerships and exclusive podcasting networks. This month, HBO Max and WWE both announced they would be launching exclusive podcast programming for their subscribers.
HBO Max will be producing a number of ad-free podcasts as in-app exclusives to subscribers, beginning with “Batman: The Audio Adventures,” a scripted series featuring the voices of A-list actors Jeffrey Wright and Rosario Dawson. HBO already has over 25 network-specific podcasts that expound upon its programming including “The Chernobyl Podcast” and “Allen vs. Farrow.” However, “Batman: The Audio Adventures” will be the first audio program exclusively available to HBO Max subscribers beginning this fall.
WWE has teamed up with The Ringer, a subsidiary of Spotify, to create an exclusive audio network specific to wrestling-related content, in what will be a multi-year audio content partnership
“I think this is a model we’re going to start to see also in the podcasting space,” explained Radcliffe. “Instead of this content being available and distributed via an RSS feed to any number of podcast platforms it’s going to be locked in, behind a paywall. The only way [listeners] are going to be able to access it is by taking a subscription to that platform.” Radcliffe also points to an interesting development that’s emerged over the last couple of months, the ability to subscribe to specific shows with a paid relationship.
As media Goliaths and corporations continue to expand their purview to the podcasting sphere, brands across every industry are finding ways to appeal to even the most obscure of consumer niches. Considering that some podcasts have as much listenership as prime-time television viewership, there is no lack of ‘big fish’ in the podcasting pond. All advertisers need to do is find ways to reel them in.
Best practices for embracing the ‘podvertising’ future
Focus on presenter reads
The Super Listeners 2020 study from Edison Research found that 48% of respondents reported paying greater attention to podcast ads than any other form of media advertising. A big reason for this is due to presenter reads.
“If you look at things like presenter reads as a format…It is seen as a very effective way to reach an audience because it feels more integrated into the show, a more seamless part of the content,” explained Radcliffe. “It doesn’t feel as intrusive as ads coming in the same way as pop-ups, banner ads online, or TV advertising.” Radcliffe added that when it comes to presenter-read advertisement, tone matters. If advertisement copy is read casually and informally, it has a tendency to be less obtrusive to listeners.
Select podcasts that make sense for your brand
According to Radcliffe, “As [podcast advertising] continues to grow and as we see more specialized content being offered, that creates more opportunities for targeted advertising.” Although, Radcliffe was quick to emphasize an overlap in listeners and brands’ target consumers. “There has to be a cultural fit there. A fit in terms of style and content.”
Benchmark ROI with listener discount codes
If you’ve ever listened to a podcast, you may have heard advertisements that provide discount codes to listeners of the show. Not only do these discounts incentivize potential consumers, they are “quite a quick way to get a benchmark of ‘Is this advertising working? Am I actually converting listeners into consumers of my product?’ which matters a lot to advertisers,” said Radcliffe, adding, “They know exactly where that consumer has then come from.”
For larger brands, small conversion rates can still be valuable
“Because the reach of a lot of these shows is large, brands don’t need a large percentage of conversion,” Radcliffe articulated. “Their equivalent ‘open’ rate could be small but because brands have got scale in terms of that audience reach. That could still be very valuable for them.”