Brand-building Now Accounts for 61% of Podcast Advertising, According to IAB’s U.S. Podcast Advertising Revenue Study

IAB released a follow up to its earlier podcast study, which found that U.S. podcast ad revenues grew at a rate more than double the total digital advertising market overall.

Part two of the study, titled U.S. Podcast Advertising Revenue Study 2023: Drivers, Strategies, and Tactics for Growth, reveals the drivers, strategies, and tactics propelling podcast ad revenues, and shows where the market is heading.

“The growing interest we’re seeing in podcasting among larger, brand awareness advertisers demonstrates the medium’s evolution to deliver on a range of buyer’s KPIs,” said Matt Shapo, Digital Audio and Video Director, Media Center, IAB. “Podcasting continues to be a remarkably agile channel that enables advertisers to reach an expanding user base, adopt new functionalities and solutions, and develop new content with creators.”

Key Findings

The report shows that podcasting can deliver on buyers’ KPIs across the funnel: the majority of podcast advertising is used for brand-building, which encompasses 61% of total ad revenues — up 13% in the last two years.

For brand marketers, there’s a lot to like. For example, podcasting usage of brand safety and suitability solutions has nearly doubled since last year, with 69% of publishers using brand safety solutions and 62% using brand suitability solutions, including contextual transcript analysis. As the report also shows, buyers are continuing to expand their range of measurement solutions commonly used with other digital channels for their podcast campaigns.

Another key finding in the IAB study is that dynamic ad insertion (DAI) now represents more than 90% of ad revenues as its share has nearly doubled in the last three years.

“For marketers who need to respond fast to trends and update messaging on the fly — but need a brand-safe and brand-suitable solution — podcasting is a proven winner,” said David Cohen, CEO, IAB. “There’s still real growth ahead.”

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Opportunities for Growth

For podcasting to continue this growth, it needs to further develop capabilities to better compete with other digital media channels for buyers’ dollars.

For example, the study shows the industry must continue to invest in creating interconnected networks that offer advertisers both scale and precision. While programmatic has shown significant growth — up 5x from 2021 to 2023 — its share of podcast revenue is still only 11%. For comparison, other digital media channels’ programmatic share is 87%.

Another opportunity for growth is for publishers to rethink their podcast ad inventory and repackage it to help advertisers reach audiences across shows, episodes, and properties. Right now, podcast ad inventory is still primarily show-specific. The kinds of sophisticated, audience-based buys common in other digital media channels only represent 25% of podcast revenues.

Perhaps the most unexpected opportunity for what had been an audio-only channel is video. Users are increasingly consuming podcasts in both audio and video formats, and are leveraging video platforms such as YouTube for podcast discovery and consumption. With video-enabled podcasts representing less than 10% of revenues, there is a major opportunity to engage listeners across environments and expand podcast monetization.

SOURCE: MartekWatch