Global Ad Trends: Podcasts highlights the rapid growth of the podcasting market and predicts that by 2022 podcasts could account for 4.5% of global audio advertising spend, a total of $1.6bn – almost double the $885m in expected investment this year (the bulk of that coming from the US market).
But it adds that much of this money is coming from brands’ experimental budgets and says that advancements in audience measurement and programmatic buying are required for this nascent format to unlock future growth.
“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,” noted James McDonald, Managing Editor, WARC Data, and author of the research.
That’s something on which Spotify, with its creation of an in-house podcast content unit and a recent spate of acquisitions, is betting big as it seeks to become the world’s largest audio platform; currently the streaming site is the third most-popular platform for podcasts, attracting 28.3% of listeners, according to GlobalWebIndex (behind YouTube on 53.0% and Apple on 28.8%).
It is aiming to monetise podcast ad audiences in two ways, the report notes: firstly, through brand sponsorship of podcast content, and secondly, via programmatic advertising, which accounts for 12% of Spotify’s US ad revenue (well below the global rate of 65.3% 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 as other users).
“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,” observed McDonald.
“Smarter, real-time audience measurement and programmatic buys – a cornerstone of Spotify’s strategy – will also help to propel investment growth.”
Downloads are relatively easy to monitor – offering a decent basis for CPM calculations – but better measurement of engagement and consumer profiling is required on a per show basis for the advertising to realise its potential.
Sourced from WARC