As podcasting becomes more popular, it’s becoming an increasingly successful advertising channel for businesses to promote their brands and expand their reach to a wider range of audiences. According to the latest WARC global advertising forecast 2022/2023, podcast advertising is expected to grow this year by 19.3% reaching $2.6 in revenue and it is expected to continue growing by 8.1% in 2023.
“Listeners have been found to not only understand but accept the value exchange of podcast advertising when it supports the content, and this can be a potent draw for brands as audiences often have a deep engagement and affinity with shows,” said James McDonald, director of data, intelligence and forecasting at WARC, in an interview with Digiday.
Podcast advertising has something for every brand, from host live-reads of sponsored advertisements, branded podcasts like F1: Beyond The Grid, or creative collaboration projects like Acast’s partnership with fintech company Klarna for the “Money Talks” card game, in which podcasters across the platform’s creator network played the game to spark conversations about financial issues.
These are some of the key takeaways from podcast advertising experts from this year on why podcasts are worth investing in as a marketing tool for brands.
Increasing brand awareness
For many brands and ad agencies, the main goal when it comes to podcasts is to increase awareness and expand to new audiences that are likely to engage with their product.
Podcasts have been successful in creating an environment in which audiences are willing to pay more attention to advertisements than they would on other platforms. According to the Super listeners 2021 report, 86% of podcast listeners are more likely to recall an advertisement they hear compared to ads they see on social media (80%) and websites (79%).
Jon Mew, chief executive of the Interactive Advertising Bureau (IAB) - speaking at the organisation’s annual Podcast Upfronts event - says that this is likely due to the content being more authentic and technology like tailored ads allowing brands to target specific audiences.
“You have people's attention, generally their undivided attention, more so than in other platforms,” says Mew. “Whether that's from dynamic ads to creating podcasts specifically for brands, there's a range of opportunities that weren't available a few years ago.”
Original branded podcasts have also become a popular option for many companies, with notable examples like Pretty Little Thing’s Behind Closed Doors podcast and Adidas’ people-focused podcast, Rebellious Optimists. These podcasts allow brands to reach out to a new audience in a creative and more intimate way that is more likely to form a sustained connection with them over a longer period of time.
“Branded podcasting is all about niche; a super engaged audience who have chosen to come to that content and create something that the audience really value,” says Neil Cowling, founder of branded podcasts production company Fresh Air. “It doesn't necessarily have to be a mass market, it doesn't necessarily have to have a huge audience. It just needs to have the right audience.”
Speaking at the Podcast Upfronts 2022, the production team behind the Devils In The Dark true crime podcast revealed that the show’s demographic is predominantly females between the ages of 25-34 and that they are likely to spend more money on the brands that are advertised to them.
The hosts, Helen Anderson and Danni Howard, use live-reads for sponsored advertisements on the show that differ from one episode to the next, so it feels more like a conversation rather than a scripted advertisement. One example was an ade promoting Calm’s meditation application, which sparked a discussion between the hosts; as one hadn’t used it and one had, they were able to represent the point of view of listeners who are new to the product, while also sharing their personal experiences with it, acting as the point of view of the advertiser.
Lance Paterson, VP of research from Audioboom, says the fact that podcasters are matched up to products that they’re compatible with and truly endorse makes ads more authentic, and the live-reads provide a way of promoting a product that makes listeners want to engage more.
“Podcast listeners are incredibly loyal to podcasts,” says Paterson. “There's a certain understanding that if you support the brand, you are directly supporting the podcasts because there is a relationship there and loyalty codes.”
The same applies to branded podcasts, in which depth of engagement is more often the goal rather than direct revenue or calls-to-action, according to Cowling.
“When we look at the types of goals that brands want to explore with us, it's very rarely a call to action or direct response medium,” says Cowling. “It's about building a relationship with a particular community of people who have a particular interest.”
Cheap at twice the price
Podcast advertising has become a more popular advertising strategy for brands to invest in, and it seems that it will continue growing according to the IAB advertising growth projections, which suggest that revenue will increase to over $4 billion in 2024.
“More and more money is being invested into podcast advertising because it works,” says Mew. “...it's actually one of the fastest growing categories in digital advertising and that's because of all the things we talked about, the great content, the opportunities that are available, and it is working for brands.”
Although there have been some challenges under the economic conditions in the UK that have impacted some platforms - such as Audioboom, which experienced a £5 decrease in average global CPM according to its latest Q3 Trading Update report - podcast advertising is still expected to grow in 2023.
“Advertising demand began to rebound in the second half of Q3, and that trend is continuing into Q4, with advertising bookings of more than US$73 million in place for 2022 - 21% more than the entirety of last year's revenue,” says CEO of Audioboom, Stuart Last. “We are confident of a positive end to the year.”
Matt Rouse, Podcast Lead at Octave Radio, believes that podcasting is a much cheaper medium to buy into in the current economic climate as budgets start to get cut and people transition into audio mediums rather than TV.
“I don’t see podcasting being hit by the cost of living crisis,” he says. “If anything it might benefit from it, because it’s a cheaper medium, more intimate, and much more memorable.
“It’s just down to people like myself and others in the industry to make sure clients and brands are all aware of that.”