Study: Podcast Ad Market To Reach $2.3 Billion By 2022

Study: Podcast Ad Market To Reach $2.3 Billion By 2022

A new study has found that the global podcast market could account for 4.5 per cent of all audio advertising spend by 2022, equivalent to $US1.6 billion ($A2.28 billion).

The study, by marketing intelligence service WARC, found the predicted revenues were almost double the $US885 million in expected investment this year, equal to 2.5 per cent of the audio market (inclusive of broadcast radio and online formats such as in-stream ads).

Much of this money is coming from brands’ experimental budgets. Advancements – such as more accurate, real time audience measurement and programmatic ad trade – are required for this nascent format to unlock future growth.

Spotify’s recent acquisitions of podcast specialists reflect the potential of podcast spend to outpace the wider online audio over the coming years.

The US is by far the world’s largest market for podcast advertising, accounting for an estimated 61.8 per cent of the format’s global spend last year ($US402 million). The IAB expects this to grow 28 per cent to $US 514.5 million this year.

Commenting on the findings, WARC data’s managing editor James McDonald said: “Podcast advertising holds great potential as it enables brands to reach a highly-engaged, young and affluent audience via a medium they have an affinity with. Spotify is betting big on increasing brand investment over the coming years and has moved aggressively to take ownership of the market.

“The majority of listeners understand the value exchange between podcasts and sponsorships, so brands need to establish a credible relationship between their messaging and the tone of the content to be effective. Smarter, real-time audience measurement and programmatic buys – a cornerstone of Spotify’s strategy – will also help to propel investment growth.”

The study highlights three key trends:

Podcast sponsorship offers consumers a clear value exchange

Almost four in five (78 per cent) podcast listeners state that they do not mind ads or sponsorship messages because they know they are a means of supporting the content. This suggests that most consumers understand the value exchange of podcast advertising.

Ancillary research by Edison, published this month, finds that over half (54 per cent) of listeners state that they are more likely to consider a brand following a podcast ad, while Nielsen research shows that a full 62per cent  of listeners correctly recall a podcast ad, and nearly 70 per cent agree that the ad increased their awareness of the new product or service.

Most podcast ads (66.9 per cent) are read by the host, so the establishment of a credible relationship between the tone and the brand is essential to delivering effective messaging.

More accurate audience measurement is required to unlock future growth

Globally, one in three (33.5 per cent) people listens to a podcast each month, with penetration rates varying across key markets: Hong Kong (55.4 per cent), Taiwan (47.1 per cent), Spain (40.1 per cent), US (33 per cent), Australia (32.8 per cent), Singapore (32.3 per cent), Norway (31.2 per cent), Italy (29.6 per cent), France (28 per cent), Canada (27.9 per cent), Japan (26.3 per cent), Germany (22.2 per cent), UK (18.1 per cent).

Research from GlobalWebIndex shows that almost two-thirds (63.1 per cent) of podcast listeners are under the age of 34, while a third (33 per cent) are educated to degree-level or higher. Most (62.2 per cent) listen during downtime in the week.

The majority of ad buys (85.1 per cent) are made on a CPM basis, and costs are generally high as demand is outpacing inventory. Downloads are relatively easy to monitor, offering a decent basis for CPM calculations. However, more accurate measurement of engagement and consumer profiling is required on a per show basis for the advertising to realise its potential.

Spotify is doubling down on content in quest to become world’s largest audio platform

Spotify is the third most-popular platform for podcasts, according to GlobalWebIndex, attracting 28.3 per cent of listeners. This compares to a 53 per cent share for YouTube, and a 28.8 per cent share of Apple.

Spotify is investing in the creation of original podcast content through its in-house unit Spotify Studios, in a bid to aggregate and retain listeners. The acquisitions of podcast specialists Gimlet Media, Anchor and Parcast give Spotify expertise as it aims to grow its ad business and margins.

Spotify hopes to monetise podcast ad audiences in two ways: firstly, through brand sponsorship of podcast content, and secondly, via programmatic advertising, which accounts for 12 per cent of Spotify’s US ad revenue (well below the global rate of 65.3 per cent for all online display advertising).

Aside from informing ad targeting, user data can also be leveraged to create personalised and, the company hopes, more engaging playlists (podcast listeners spend twice as much time on Spotify than other users).

Doubling-down on original content also enables Spotify to reduce royalty costs for podcasts. Spotify’s gross margin was 25.7 per cent last year, meaning three-quarters of its income was paid out again, mostly in content acquisition fees.




Please login with linkedin to comment

podcasts Spotify Warc

Latest News

Archibald Williams Wins NBA Digital, Activation & Fan Engagement Accounts For APAC
  • Media

Archibald Williams Wins NBA Digital, Activation & Fan Engagement Accounts For APAC

Independent brand and digital agency, Archibald Williams (AW) has been appointed to lead the NBA account across the APAC region. The NBA is one of the most prestigious sporting leagues in the world and basketball is one of the fastest-growing sports in Australia. Effective immediately, AW said it was “excited” to work across all digital, […]

QMS Champions Creativity As First Most Contagious APAC 2023 Sponsor
  • Advertising

QMS Champions Creativity As First Most Contagious APAC 2023 Sponsor

Leading digital outdoor company QMS has announced it is the first-ever inaugural partner for Most Contagious APAC, the landmark London event by creative and strategic intelligence company Contagious, which will be showcased in Australia on Tuesday, 12 December in Sydney and Wednesday, 13 December in Melbourne. Most Contagious is an event that delivers key advertising […]

OMG’s Annalect First To Get Meta’s Advanced Analytics
  • Technology

OMG’s Annalect First To Get Meta’s Advanced Analytics

Omnicom’s data and analytics division Annalect has partnered with Meta, giving it access to Advanced Analytics (AA) – one of Meta’s privacy-focused measurement solutions – to provide Omnicom’s clients with future-proof, next-level measurement. Omnicom is the first holding company to have access to AA. AA allows advertisers to combine their first-party data with Meta’s ads […]

AKQA Launches Eco-Conscious AI DIY Assistant Encouraging People To Gift More Sustainably
  • Technology

AKQA Launches Eco-Conscious AI DIY Assistant Encouraging People To Gift More Sustainably

WPP’s AKQA has launched Fixmas.gift, an environmentally conscious AI-powered DIY assistant, affectionately known as Fixie, for a one-stop solution for all things repair. Fixmas.gift hosts an array of guides and inspiration to empower people to prolong the lives of their belongings or purchase pre-owned items that need a little love and care. Fixie can: Help […]

Marc Collister: AI & Automation Set To Revolutionise Creativity In 2024
  • Opinion

Marc Collister: AI & Automation Set To Revolutionise Creativity In 2024

Marc Collister (pictured) of P2 Content Creators spills the beans on his 2024 predictions drawing from two decades of experience in the advertising, film and television industry. I’m certain it will come as no surprise that in 2024, we can expect our industry to move at breakneck speed again. With even more rapid shifts in […]

Opinion

by B&T Magazine

B&T Magazine
Zeno Group Australia Bolsters Client Offerings With An Expanded Creative Services Portfolio & New Senior Leader
  • Marketing

Zeno Group Australia Bolsters Client Offerings With An Expanded Creative Services Portfolio & New Senior Leader

Zeno Australia has announced expanded creative design capabilities and the appointment of Jim Michell (lead image) to its senior leadership team. The new moves support strong growth in the region. Zeno Australia’s clients, including Abano Healthcare, Motorola and Yorkshire Tea, can now tap into a suite of creative design services to augment the agency’s work […]

Assembled Media Inks TikTok Creator Campaign for BIC
  • Campaigns

Assembled Media Inks TikTok Creator Campaign for BIC

Assembled Media, is drawing upon the creative power of TikTok Creator Marketplace to help generate unique, impactful content for iconic stationery brand, BIC. The social activation campaign titled ‘A Pen for Every Side of You’ promotes the flexibility of BIC’s 4 Colours pen and is active nationwide on the BIC Stationery TikTok account. The campaign […]

Big data and analytics visualization technology with scientist analyzing information structure on screen with machine learning to extract predictions for business, finance, internet of things
  • Media

IAB Launches Fourth Module In Its Marketing Measurement Innovation Series

IAB Australia has launched ‘Evolution in Market Mix Modelling’, the fourth module in its Marketing Measurement Innovation Series, which has been developed by IAB Australia’s Ad Effectiveness Council. The module explores what is driving the increased use of MMM and how the technique is evolving with advances in computing power and machine learning to provide […]

Aerial view of a coal fired power station with large cooling towers emitting co2 into the atmosphere. With its lights already turned on the power station is illuminated in moody twilight.
  • Media

Scope3 Expands Carbon Measurement Capabilities To Include DOOH Advertising

Scope3, the collaborative sustainability platform leading the decarbonisation of media and advertising,  announced the addition of digital out-of-home (DOOH) to its emissions measurement. With DOOH ad spending predicted to grow from $17B in 2023 to nearly $24B by 2028, measuring this channel brings us one step closer to understanding the total impact of digital advertising […]

January 14, 2023 - New York, New York, USA: 2023 NRF Big Show press conference with Composition 2024 NRF Singapore.    Photo by Ian Wagreich / © Ian Wagreich Photography
  • Marketing

Now Open For Registration – NRF 2024: Retail’s Big Show Asia Pacific

NRF 2024: Retail’s Big Show Asia Pacific, is now open for online registrations for the main conference. Jointly organized by the National Retail Federation and Comexposium, Retail’s Big Show Asia Pacific will take place from 11 – 13 June, 2024 at the Sands Expo and Convention Centre in Singapore and is expected to draw thousands […]