Whether you’re interested in sports, true crime, current events, Star Wars or Bigfoot conspiracy theories, there’s a podcast - or several - out there for you. Podcasts have been growing in popularity in the past few years. According to the latest Infinite Dial survey, in 2020, 37% of Americans over the age of 12 listened to at least one podcast each month, up 5% from 2019. For listeners 12-to-34 years old, that number increases to almost half (49%).
And where the consumers go, advertisers are bound to follow. In 2020, estimated podcast ad spend was $800 million, a number that is expected to more than double to $1.7 billion by 2024 according to IAB PwC. This is an annual growth rate of nearly 20%, which isn’t all that surprising when you consider that over one third (37%) of marketers said they would likely use podcast ads in their media strategy in the next six months, per a Westwood One survey conducted in 2020.
With all the growth this medium is experiencing, it's quite frustrating for advertisers that podcast advertising is still very fragmented. In order to buy ads, you have to connect with multiple different podcast publishers or creators, negotiate separately with each one and work to get your message to the right audience at the right reach and frequency. Spotify is working to change that.
Spotifying the Podcast Industry
Recently, Spotify has invested millions in podcasting, acquiring publishers such as Gimlet, production studios such as Anchor and, most notably, the audio advertising company, Megaphone. To double down on these investments, the company also introduced Streaming Ad Insertion (SAI) to provide podcast marketers a better read on ad impressions, frequency and reach along with anonymized data on listener demographics. The process of placing podcast ads remained unstreamlined, though.
In February, the platform finally addressed media buying with the introduction of the Spotify Audience Network. This will allow marketers to manage campaigns across Spotify's ad supported music offerings, podcasts and on content outside of Spotify such as Megaphone and Anchor. The Spotify Audience Network also makes all media addressable based on demographics (age, gender and location) and audience segment. Contextual targeting is expected later this year.
A “First-of-its-Kind” Solution
Spotify is describing the Audience Network as a “first-of-its-kind audio advertising marketplace” where advertisers of all sizes have access to a broad range of content. By their own assessment, this solution will allow brands to:
Reach engaged audiences in screenless moments at scale on and off Spotify
Leverage targeting tools to reach the right audiences
Explore advanced insights powered by SAI
Is the Future of Podcast Advertising Here?
It’s probably a bit too soon to accurately predict how podcast advertising will look in a few years. While the Spotify Audience Network is certainly a step in the right direction for effectively monetizing this industry, Spotify isn’t the only guy with a horse in this race. Apple also has designs about monetizing its podcasting platform, and did we mention Pandora? Yep, SiriusXM, which owns Pandora, has a goal to build the best home for podcast creators and has been acquiring podcast companies.
This industry will definitely be heating up in the coming months and years. If you’re interested in getting in on the action, contact The Ward Group to learn more about our expertise when it comes to media planning and buying in the audio space. We’ll stay tuned in to the rapid changes of the podcast industry so you won’t have to!