Late last year Spotify acquired two major podcast advertising analytics tools: Podsights and Chartable. It marked the point at which the industry’s priorities split: while exclusive deals for content creators are still being struck, there is just as much investment in proving the efficacy of podcast advertising.
Since then everyone from DAX to iHeartMedia has been regularly announcing the launch of new and improved analytics tools. It’s indicative of a pivot away from platforms promising huge, indiscriminate scale, and towards more impactful, targeted advertising. At the same time, Insider Intelligence forecasts global podcast advertising spend will hit $3.53bn in 2026, which will continue to spur investment in adtech.
Even with all that investment, however, many of the platforms admit there is still a lot of education to be done on behalf of brands and advertisers looking to tap into that market.
Sometimes that education can simply take the form of demystifying the podcast space. Sarah Toporoff is a podcast audience and product strategist. She argues advertisers should approach podcasts as they would any other medium: “People see podcasting, and they get scared, and they think they don't know anything.”
“You shouldn't necessarily come at it like ‘we want to do podcast advertising’. You have to come at it from the angle of ‘we want to help your brand tell a story’.”
To that extent, podcast advertising should be approached as you would any other medium, and considered as part of multi-channel approaches as much as a channel in its own right.
Toporoff does note, however, that the relative nascency of podcast advertising means that brands need to do their research before contacting a potential advertising partner, as the responsibility for selling space might sit within the traditional ad team, or a special ops division, or sometimes even within an editorial department.
Once that initial obstacle has been overcome, the outcomes of the campaign should be established. For podcasting specifically, the historic measure of success has been in converting listeners and driving traffic back to the advertisers’ other online properties. Lina Wangfang is senior director of inventory at StackAdapt. She explains: “Since listen-through rate is not always possible to track for downloaded podcasts, advertisers should pay more attention to engagement and conversion rates.”
“Successful podcast campaigns should drive traffic to the advertisers’ domain to increase awareness.”
Podcast advertising advocates also note that it is important to be realistic about the size of addressable audiences for many podcasts. Unless you are choosing to spend to appear on some of the big-ticket exclusives, it’s likely that audiences will be relatively small in comparison to those offered through other digital advertising mediums.
Alice Sandelson is commercial director for audio at Tortoise, the audio-first ‘slow news’ publisher. She explains that huge audiences, while a major selling point for most mediums, misses the point of podcast advertising: “Ambitions for audience size should depend on the overall objective of the podcast or the campaign. There’s certainly more value in reaching 1,000 ears made up of the right audience, than 10,000 ears where the brand message isn't relevant.”
“That's a conversation we aim to have with partners early on as it affects not just targets but everything from editorial: the tone, the structure, the guests, right through to branding, release schedule and of course marketing.”
In-person or programmatic
Podcasts are best-known for the personal relationship the medium engenders between host and listener. As a result of that and the original lo-fi nature of their distribution via RSS feed, the primary means of monetisation for a long time was host-read ads.
Thanks to the continued investment in adtech over the years, however - particularly the ongoing push for programmatic revenue from companies like Spotify and Acast - that is changing. Automated ad placement is becoming far more common. As a result, brands looking to advertise on podcasts have another choice to make – host-read or programmatic.
“Host-read ads are rightly considered to be highly engaging and effective,” Sandelson explains. “As an established medium, I have no doubt that they will continue to drive growth for audio advertising. Equally exciting are developments in dynamic audio ads, which will no doubt bring brands that are not currently spending into audio advertising.”
Wangfang, however, argues that programmatic makes more sense for an initial experiment into podcast advertising: “Host-read advertising requires advertisers to negotiate a deal with individual publishers. The creative can only be used in one podcast show and there is a hefty minimum to get started, and you are only reaching the audience of one show at a time. All in all, it's a lot more time-consuming and expensive to launch a campaign.”
As podcast inventory increases, there are a commensurate number of opportunities for brands looking to experiment with the medium. As a result, the amount of initial outlay the experts recommend is very much down to the aims of the overall campaign. It’s worth noting, however, that a study conducted specifically on US podcast advertisers earlier in 2023 found one in five advertisers estimated their return on podcasts was greater than $6 for every $1 spent on the medium.
Podcast advertising has matured significantly over the past few years – but there is still huge amounts of room for experimentation. That presents brands and advertisers who have never tried advertising on podcasts with a number of opportunities – particularly since the podcast platforms are seeking to expand their range of advertising partners in turn.
“On the advertising side Spotify analytics is the first step into going more lower funnel,” explains Kristiana Carlet, head of international advertising sales at Spotify, “because that will open up budgets more on the direct response space, which means that [we] will open up customer sites that we don't have today.”
For new advertisers, then, the opportunity is there – it just requires some careful consideration of what the initial campaign should achieve.