Independent podcast company Acast has started the first quarter of 2023 on a positive note, according to its latest financial results, with an 11% increase in net sales year-on-year amounting to SEK 331.3 million (£25.8m).
The results follow a couple of rocky months that Acast faced last year. Challenges in the macroeconomic environment led to a high operating loss of SEK 352.6 million (£27.5m) in Q3, causing the company to cost cuts and reduce its workforce by 15%. The company had a strong end to 2022, however, when it increased its net sales by 35% YoY and reduced its operating loss by 60%.
Although Acast’s operating loss had increased again by nearly 25% from Q4 2022 to this quarter - due to factors such as sales and marketing, administration, and product development expenses - the operating loss is still a 2.5% decrease year-on-year. This indicates that it is stabilising after the heavy cost reductions that were made towards the end of 2023.
Acast’s CEO Ross Adams also credits the company’s net sales in Europe - which grew by 14% to a total of SEK 217 million (£16.9m) - to the company’s continued expansion through partnerships with podcast production companies like Tonny Media in the Netherlands which was announced in January this year. However, net sales in North America dropped by 1% due to continued weakness in the advertising market.
“It is with excitement and anticipation that I look forward to the coming year, despite the continued great macroeconomic uncertainty,” said Adams. “In recent years, Acast has strengthened its position as a global market leader in podcasting and we are today well equipped to meet advertisers’ needs to maximise relevant media channels with high returns.”
Adams also said that the company sees “a continued positive trend in terms of programmatic advertising sales” having continued to make innovations in the podcast advertising space through developments like keyword and contextual targeting tools. In Q4 2022, Acast saw an increase in programmatic ad sales which accounted for 13% of the platform’s overall revenue.
“We focused on building our programmatic offering probably five years ago, we were the first doing it, we were incredibly early, we're still incredibly further advanced than any other platform out there and how we focused on it,” Adams told PodPod on an episode last year. “And that's through conversational targeting, which we think is going to be a key thing moving forward.
“Through keyword targeting, and through conversational targeting, we start to understand the conversations that are happening within podcasts…the relevancy should see a mass uplift in brand awareness and an attribution and convert more.”
As part of its new developments, Acast started to roll out Interchangeable Ad Slots across its network at the end of March this year, which can help advertisers identify if a sponsor-read ad slot has not been sold on a show and replace it with a pre-recorded ad, which leads to increased podcast inventory for brands and fewer ad slots going unsold.
Acast also launched its self-serve ad platform in November 2022 which allows companies, large and small, to launch podcast campaigns for as little as $250 across Acast’s Marketplace of over 100,000 podcasts. Since launching, more than 150 advertisers have already advertised on the platform as of Q1 2023 and nearly 40 percent of these advertisers booked more than one advertising campaign.