Podcasts have been another source of fun, information, and something to do during our extensive time at home due to the Covid-19 pandemic. Recent data from a national online survey I conducted in June reported that 20% of American adults were listening to podcasts at least once a week or more, including those who listened every day (7%).
The Interactive Advertising Bureau (IAB), the leading organization for promoting digital advertising, and Price Waterhouse Coopers (PwC), the international consulting firm, recently released their annual study, U.S. Podcast Advertising Revenue Study, for 2020. The study predicts that podcast advertising revenue will increase by almost 15%, “nearing $1 billion in 2020,” according to the IAB and PwC.
In many cases advertising has been hard hit by the economic impacts of the pandemic and stay-at-home orders. For many industries—such as travel, hospitality, retail and others—the result of the current economic upheaval has been huge. The recent study on podcast advertising revenue documents an example of where advertising has been more robust. In general, digital advertising is being less negatively impacted than other forms of advertising during the pandemic.
The same partners in this study issued a similar study in 2019 and past years. In 2019 they estimated that podcast-related advertising revenue was $708 million and that in 2018 it was $479 million. The rates of increase are coming down as the total advertising revenue scales up. Nonetheless, it is clear that podcasts have become an important platform for advertising.
It is often said in the media world that advertising revenue follows eyeballs. In this case it is more that the advertising dollars are following the ears of consumers.
Some of the advertising categories that were strong on podcasting, according to the PwC and IAB report, include consumer brands, financial services, health, wellness, and home appliances. The top type of content on podcasts was news at 22%, comedy at 17%, and society/culture at 13%. It is interesting to note the breadth of podcast content on the top grossing podcasts, such as sports content and commentary from The Joe Rogan Experience or the Bill Simmons Podcast, to true crime podcasts like My Favorite Murder.
There are also other revenue streams growing in the podcasting world, including content licensing and consumer payments. Hernan Lopez, founder and CEO of Wondery, a major podcast company, said looking at the future, “Podcast ad revenues will grow faster than pretty much any other form of media in 2020; and ad revenue is only part of the story. For Wondery, licensing and consumer revenue will represent well over 20% of the total this year.”
In fact, 72% of podcast consumers over the age of 55+ believe in the mixed-business model of paid podcasts and free podcasts supported by advertising. Only 56% of podcast consumers in the 18-to-34 range believed in the mixed model, and 34% of the younger age group felt all podcasts should be free.
The podcast world is growing with major acquisitions, expanded marketing efforts, more distribution outlets, and a number of venture backed companies competing alongside huge companies like Apple and Spotify. For a thoughtful analysis of the larger ecosystem around podcasting I recommendthis article from fellow Forbes.com contributor Jay Kapoor. And if you are trying to find something new in the podcasting realm to listen to, Spotify has launched a series of charts in various countries showing the most popular podcasts, as well as the rising, up-and-coming podcasts.
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