Despite COVID-19 making home the new office, podcast ad revenues are expected to climb to about $813 million this year, a 15 percent upswing over 2019, according to a new report released Monday from the Interactive Advertising Bureau.
Advertising on podcasts is no longer considered a “scatter” media purchase—when marketers make ad buys closer to a show’s air date—and are instead being included in annual media plans, the IAB says. The news suggests that advertising on podcasts has matured, as agencies are now committing large portions of ad dollars to the format upfront.
Last week, for instance, Omnicom Media Group said it would commit $20 million to advertising on podcasts through Spotify’s platform over the next five months. The IAB says that the proportion of advertisers who make podcasts part of their annual media buys has nearly doubled this year to 47 percent.
“Podcasts have proven to be more COVID-resilient than other ad formats,” says Sue Hogan, senior VP of research and measurement at the IAB. She adds that marketers flocked to digital audio shortly after social-distancing guidelines were put in place because "it allowed brands to quickly pivot and change their messaging."
Expensive ad format
The cost of running a podcast ad 1,000 times, also known as CPM, runs anywhere from $30 to $40, says Collin Colburn, an analyst at research group Forrester.
“Podcast advertising has exploded so much but the thing that is overlooked is they are expensive ads,” Colburn says. “They are way more expensive than Facebook ads, and those large [podcast] testing budgets are shifting to dedicated budgets.”