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Tuesday, July 14, 2020

Report: Advertisers Making Longer-Term Podcast Buys

The Covid-19 pandemic has slowed the growth of podcast advertising revenue, but the industry remains in a good position to grow, according to Barron's citing data from  IAB, the Interactive Advertising Bureau.

Podcasting has grown from a niche hobby with a homemade charm a decade ago into a major media industry today attracting hundreds of millions of dollars worth of investment and major star power.

Spotify Technology is the biggest spender on podcast acquisitions right now, because the company sees podcasting as a complementary service to its music offerings. It has spent more than $500 million to buy podcast companies and technology since the start of 2019, according to analyst and media estimates.

Other companies are also making investments, with Sirius XM Holdings (SIRI) announcing on Monday that it would buy the podcast company Stitcher for $325 million.

Last year, podcasting brought in $708 million, a 48% gain from the $479 million it took in 2018. In 2020, IAB estimates that podcasting revenue will grow another 15% down from pre-Covid estimates of 30% growth. That 15% gain equates to ad revenue of $812 million this year.

One positive from the report is that more advertisers are making large annual buys on podcasts, a sign that they are becoming a larger part of their brand strategies.

IAB has not put out post-Covid estimates for 2021 and 2022, although it had previously expected growth of 55% and 36% in those years. The study was sponsored in part by companies involved in the industry, including Spotify and Slate. It uses data reported to PwC by companies in the industry.



The No. 1 genre in podcasting is news, which pulls in 22% of revenue, according to IAB. People have flocked to podcasts to get more information on the pandemic.

About two-thirds of ad revenue from podcasting comes from ads read by the host, IAB says, but some industry players say the next stage of growth will involve more dynamic insertion of ads from big brands. New technology allows podcasting companies to target ads at consumers based on their interest and location.

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