Is it the booming era of the podcast? Its audial and visual potential and reach are growing and more and more brands are taking notice. Podcasts, once a go-to marketing channel for direct-to-consumer brands, have become a mainstay for more seasoned advertisers, agency executives say.
“As part of our conversations, brand interest in podcasts has more than doubled in the last six months,” said Tom Kelley, CEO and partner at marketing agency Revival House, which has worked with clients like DraftKings, Sony and Nike. “It certainly feels like a trend on the rise.” (He did not provide specific figures around client podcast advertising inquiries).
In 2023, podcast advertising is estimated to account for $2.25 billion of ad spend and grow to $3.53 billion by 2026, according to Insider Intelligence. Even with economic uncertainty putting marketing budgets under intense scrutiny, podcast ad buyers said in February they had yet to see a slowdown.
For brands like Sleep Number, podcast advertising spend has grown to account for 20% of its audio advertising budget over the past year, which marks a five year steady increase especially as audiences grow around more niche topics.
According to Josh McDonald, senior marketing manager of FMBs (Flavoured Malt Beverages) at Molson Coors Beverage Company, “we know podcasting is growing in leaps and bounds year-on-year […] It’s integrated into our strategy. It’s not a test to learn. We’re leaning into it. It’s a strong piece of our media strategy.”
Meanwhile, The Weather Channel ran a podcast ad campaign on Pandora last summer, which drove a 6% lift in overall brand favorability, according to Samantha Cohen, head of marketing technology and media for The Weather Company, an IBM Business. Per Cohen, research showed that nearly half of The Weather Channel’s target audience tuned into four or more podcasts on a weekly basis, making it a channel worth testing to get in front of that audience.
There are a few reasons brands seem more keen on podcast advertising now than they have in the past, agency executives say. They include better measurement tools, increased listeners and more shows (thus more genres and audiences) to pick from. For instance, back in 2020, Spotify rolled out Streaming Ad Insertion (SAI) technology to help advertisers with digital planning, reporting and measurement. There’s also programmatic podcast advertising, which has sparked some advertiser interest even though it’s still in its infancy.
And unlike other marketing channels, podcasts are immersive because they capture a listener’s full attention even as life returns to normal post-pandemic. (Although it is worth noting that the podcast boom has decreased slightly since its spike during pandemic lockdown.)
New channels have also emerged mid podcast boom, like YouTube adding podcasts to its music app and new video podcast capabilities are being added to both YouTube and Spotify.
The podcast stats are huge; on average, U.S. adults will spend about one hour and 43 minutes per day listening to digital audio, like podcasts, this year, according to Insider Intelligence. That figure is expected to increase slightly next year to an hour and 45 minutes per day.
With that said, the podcast advertising industry is poised for growth among brand advertisers, especially as diversification of media spend continues to be a topic of conversation throughout the industry.