Insights: IAB Forecasts Podcast Ad Revenue to Surge

This week’s Westwood One blog covers highlights from the latest podcast advertising revenue report from the Interactive Advertising Bureau and PricewaterhouseCoopers. It also touches on the just-released Q2 2020 Share of Ear data from Edison Research.

• 2020 podcast revenues will come in at 94% of last year’s prediction: The current 2020 podcast revenue forecast of $814M is only 6% less than what IAB/PwC predicted for 2020 last year at this time ($863M).
• Podcast ad revenues soared +48% from 2018 to 2019: The +48% rate of growth from 2018 to 2019 was nothing short of stunning. While the COVID-19 crisis has tempered 2020 growth rates, IAB/PwC still predicts a +15% lift in 2020 revenues.
• 2019 versus 2018: Many measures remain consistent – brand marketers vs. direct response: From 2016 to 2018 the share of podcast ad revenues from brand marketers doubled from 27% to 48%. The share of brand spend in podcasting was stable 2018 versus 2019 (48% versus 45%).
• The proportion of revenues from dynamically inserted ads versus edited-in/baked-in ads remains stable: In 2019, half of ad revenues were dynamically inserted and half were edited-in/baked-in.
• Host-read ads continue to be the dominant podcast creative execution: In 2019, 66% of podcast ad revenues were from host-read ads, 27% were announcer-read/pre-produced ads, and 6% were supplied ads.
• Half of podcast ad buys are now placed via annual/upfront commitments; One-third are purchased quarterly.
• CPM remains the dominant pricing method: 84% of podcast spend in 2019 was based on CPM, very consistent with 2018 (86%) and 2017 (85%).
• Five podcast content genres represent 72% of ad spend: News, comedy, society/culture, business, and true crime.
• Direct-to-consumer retailers and financial services are the two leading podcast spenders over the past three years
• Podcasting is the only ad-supported audio format to show meaningful audience growth over the last four years: Comparing Q2 2016 with the just-released Q2 2020 study reveals podcasting audience shares have tripled (3% to 9%).
• Podcasting has double-digit shares of ad-supported audio listening at home and at work.