In April, Ad Age Studio 30 contributing writer Michael Applebaum examined the growth of podcast advertising in a case study that traces the industry's development from the earlier viral success of the “Serial” podcast’s MailChimp ad to the recent podcast ventures of media luminaries Jacob Weisberg and Malcolm Gladwell of Pushkin Industries. Each month, Ad Age creates and shares an exclusive case study with Ad Age Insider subscribers. Already an Insider? Instantly download the case study here. Or learn more about Ad Age membership levels and benefits here.

What a difference eight months can make. The Interactive Advertising Bureau and PwC had previously estimated podcast advertising revenues to reach $659 million in 2020. Now the firms project those revenues to surpass $1 billion by 2021. The number of podcast listeners in the U.S. is expected to jump 55 percent from 86 million in 2019 to 132 million in 2022, per Statista. (The most recent projection from eMarketer was 83.8 million in 2022.)

The question Ad Age posed in the case study: Will podcast advertising remain the purview of digital startups like ZipRecruiter and Stamps.com and insurgent DTC brands with cult-like followings such as Quip and Casper, or will major brands look beyond the measurement gaps and other drawbacks of podcasting and put their weight behind the platform?

Comparing the list of top 15 podcast advertisers in January and August 2019 (see chart below) reveals a few notable changes. Although ZipRecruiter and Geico remained in the top two slots, Quip, Casper and Skillshare dropped off the list, replaced by newer brands including HelloFresh, Native and ADT. Perhaps the most noteworthy addition is Spotify, whose purchase of Gimlet Media this year and Anchor FM in 2018 have given the company a greater foothold in the space. Spotify has been running ads promoting podcasts that are now available on its streaming service during programming including The Wall Street Journal’s “Your Money Briefing” and “Earn Your Leisure” podcasts.

Spotify is far from the only major audio player expanding into podcasting. On a panel at Ad Age Next: A Revolution in Sound in October, Conal Byrne, president of iHeartMedia's podcast network, said his firm had gone all in on the medium because it had reached "a tipping point" about a year and a half ago: The number of Americans actively listening to podcasts rose from one out of four to one out of three, or 90 million to 100 million listeners a month, according to Byrne. "What's happening now is podcast advertising is starting to evolve into big brand equity campaigns: the Deltas, the AmExes, the IBMs. So now that looks like 60/40 or 50/50 as opposed to 90 percent DR ads."

Data and measurement questions remain

Efforts to improve the data transparency of podcast advertising have been incrementally successful. However, increased demand for more granular platform-level targeting has given rise to solutions like Targeted Marketplace from Megaphone (formerly Panoply Media), introduced in 2017, and the newer Smart Audiences tool from the podcast hosting platform Art19. Both use independent data sources (Megaphone works with the Nielsen Data Management platform) to anonymously connect listeners to their devices and households, allowing marketers to tailor their messages to specific podcast audiences by purchasing ads across multiple programs or networks.

Two industry executives Ad Age interviewed for the April case study provided an update. Korri Kolesa, now CEO of Art19 Media, says that the implementation of the Smart Audiences tool during the past few months has provided an additional incentive for marketers to take another look at the space. “Both performance advertisers and brand advertisers are now thinking about what a targeted audience looks like in podcasting and how to leverage it,” she says.

Still, measurement gaps remain. Namely, there has been inconsistent adoption of the most recent standards. Notes Kolesa, “The biggest thing that a platform like ours can provide is a standard that matches what the IAB has adopted. That’s the way that advertisers can have a level playing field with others.”

In addition, Ad Age recently reported on the introduction of a new ad blocking technology for audio that as yet does not appear to be much of a threat to marketers. The overall popularity of the podcast medium, however, shows no signs of slowing. Sarah Greenfield, executive director of strategy at the boutique creative shop Episode Four, points to new research from her firm that shows an equal or higher level of enthusiasm among general podcast listeners within certain genres—not only thrillers but also newer categories like medicine, history, education and economics—as TV and film.

As for the measurement question, Greenfield anticipates that growing advertiser interest will provide the necessary catalyst for greater adoption of the IAB standards. “It takes a lot of infrastructure, testing and time to make enough progress,” she says. “But I think we’ll get there.”