Do you remember those old banner ads from the 90s? Well, digital advertising has come a long way since then! It’s all about reaching specific audiences and measuring the effectiveness of the ads.
But when it comes to audio advertising, things have been a bit different. Podcasts have only recently started to make up a bigger portion of digital ad spending. In fact, according to eMarketer, US podcast ad spending is projected to exceed $2 billion by 2023!
Podcasts are becoming more popular and now reach over a third of the US population for more than 50 minutes per day. The Evolution of Podcast Advertising breaks down the history of the medium, the challenges for advertisers, and what the future of podcast innovation looks like.
By 2024, it’s projected that there will be 504 million global podcast listeners! So keep reading to find out if podcast advertising is the right choice for your business.
The Evolution and Rise of Podcasting Advertising
Have you ever listened to a podcast and heard the host promoting a product or service during the show? That’s called podcast advertising! And it’s becoming more and more popular among businesses as a way to reach their target audience. But it wasn’t always this way. Let’s take a closer look at the podcasting evolution:
a. Digital Format or Analog Advertising (2004-12)
Back in the early days of podcasting, creators and publishers wanted to make money from their content. So they started including ads directly in the audio files of their podcast episodes. These ads were called “baked-in” or “burned-in” ads. They were a way for advertisers to align themselves with a trusted podcast or host and do influencer marketing.
But there were some problems with baked-in ads. Advertisers couldn’t be sure they were reaching the right audience, and they couldn’t change the ads if they become outdated or stale. So, while baked-in ads were a unique opportunity, they had some limitations.
b. Dynamic ad insertion (DAI)
The Second is the rise of DAI ( Dynamic Ad Insertion). Podcasts were already growing in popularity. But the introduction of dynamic ad insertion (DAI) marked a significant turning point for the industry.
With DAI, advertisers could record their ad separately from the podcast episode and have it inserted into the content at the time of download by the hosting platform. This allowed for basic targeting, as well as control over the insertion and refreshing of ad creative. Advertisers could even run their ads across multiple episodes or podcasts.
This was a big deal because it gave advertisers more control over their messaging. And allowed them to reach a more targeted audience. Instead of having to create a different ad for each podcast episode, they could create one ad and have it inserted into multiple episodes.
Since then, podcast advertising has only continued to grow in popularity. In fact, in 2021, it was estimated that podcast ad spending would reach $2.7 billion in the US alone.
At the beginning of 2020, the trend moved from downloading to streaming podcasts. And the new player Spotify came up with Streaming Ad Insertion (SAI).
c. Streaming Ad Insertion (SAI)
So, how does SAI work? Similar to DAI, a listener presses play on a podcast episode that has empty ad slots ready for ad insertion. But, rather than counting all impressions at the point of download, Spotify records an ad impression in real-time, as soon as the ad starts playing. That means for the first time ever, podcast advertisers can get insight into confirmed ad impressions. They can have confidence knowing that their ads were heard, instead of simply using downloads as a listening proxy.
But the question remains: is podcast advertising right for your business? The answer depends on a variety of factors, such as your target audience and marketing goals.
Let me share some stats with you about podcast advertising in 2022.
In 2022, 82% of marketers plan to maintain or increase their investment in podcasts. This means that companies are continuing to see the value in advertising in podcasts. It is projected that spending on podcast advertising will reach $1.74 billion this year. This is a significant increase from previous years.
Information Technology companies are also jumping on board with 39% planning to use podcast advertising in 2022. The cost of a podcast ad slot varies between $10 to $50, depending on the popularity of the show. Some premium shows may cost even more.
About 18% of U.S. companies are planning to include podcasts and audio content in their marketing strategies. This is due to the growing popularity of podcasts. Research shows that 54% of podcast listeners are more likely to consider the brands advertised on podcasts.
For retail companies, podcast advertising is considered the media channel with the biggest ROI. 38% of marketers in the retail industry believe that advertising through podcasts is the best way to reach their target audience.
Estimations show that podcast advertising revenue will surpass $2 billion in 2022. This is a significant increase from previous years. This shows that podcasts and other audio content continue to be popular and effective ways for companies to reach their audience.
Did you know that there are now more than 2 million active podcasts as of 2021? And that number is growing fast! In April 2021, there were over 48 million podcast episodes available for listeners to choose from.
More and more people are tuning in to podcasts too. Monthly podcast listenership has grown by 6.1% to reach 125 million in 2022. It’s not just a small niche anymore – 73% of Americans who are 12 years old or older have listened to a podcast in the past month.
That’s not all, either. Between 2021 and 2022, the percentage of people over the age of 12 in the U.S. who listen to podcasts has gone up from 57% to 62%. It’s clear that podcasts are becoming an increasingly popular way for people to consume content and stay connected to the world around them.
Around 79% of people over the age of 12 in the U.S. know what podcasts are. That’s pretty cool, right?
Out of all the people who listen to podcasts, about 53% of them are men. That means more than half of the podcast listeners are guys.
Do you happen to be a millennial? If so, you might be interested to know that 41% of people in your age group listen to podcasts every week.
It’s not just men who are into podcasts though. In 2022, 53% of men and 46% of women were listening to them. That’s pretty close, don’t you think?
If you’re wondering who exactly is listening to podcasts. Well, it turns out that about 66% of them have a college degree and make around $75,000 a year on average.
Finally, the age group with the biggest increase in podcast listenership in the past year has been people aged 12 to 34. So, if you’re in that age range, you’re definitely not alone in your podcast-listening habits!
Podcast Listener Behaviours
Many people listen to podcasts at home, but a sizable minority, about a quarter, listen in the car. People often learn about podcasts by searching online or hearing about them from friends.
Listeners tend to listen to most podcast episodes. They’re also more likely to own smart speakers than people who don’t listen to podcasts. Among podcast listeners, podcasts are the most popular form of audio content. In fact, many podcast “super listeners” say that podcast ads are the most effective way to reach them.
Younger generations, like millennials and Gen Z, are more likely to listen to podcasts for professional development than older generations. Even customer service reps listen to podcasts at work! Apple Podcasts is the most popular platform, followed by Spotify. Millennials also tend to listen to educational podcasts more than other types.
Listeners are more likely to share podcasts with friends if they can share short segments, rather than entire episodes. Host-read ads are also popular. More and more brands are getting into the podcast game, with branded content increasing by 82% between 2020 and 2021.
Pre-roll ads are becoming more popular, and podcast ads tend to be 16 to 30 seconds long. Most podcasters charge for ads using cost-per-mille pricing. NPR reports that a whopping 75% of its podcast listeners take action after hearing sponsored content.
Why Podcasts are a Great Choice for Marketing Your Business?
Like millions of other Americans, you’ve probably listened to a podcast or two. It’s a common pastime, with the average U.S. podcast listener tuning in to four or five podcasts each week.
The podcasting industry is on the rise, and it’s growing every year. According to Infinite Dial, seven million more people were listening to podcasts in 2021 compared to 2020.
That’s why you should consider podcast advertising for your brand.
Here are some reasons why:
1. Use podcasts to build brand awareness, not just to generate leads
Podcasting is a great tool for gaining exposure and brand awareness. Instead of trying to generate leads, focus on getting your name out there. It’s not always about measurable ROI, so consider organic mentions that feel natural.
2. Remember that your audience may have diverse interests
Don’t make assumptions about your audience’s tastes and interests. They may surprise you! So, don’t be too rigid in sticking to one category. Mix it up and try new things to see what works.
3. Host-read ads work better than third-party ads
Host-read ads are more effective than scripted, third-party ads. Listeners are more likely to respond to a message that feels like it’s coming from a trusted source. Consider producing organic mentions that the host can deliver in their own voice.
4. Measure and evaluate the success of your campaigns
Measuring the success of your podcast campaigns is key. Use promo codes, custom links, and post-checkout surveys to track success. Be prepared for some ads to fail at first and test a variety of shows to figure out what works best. Use a tool like Casted to track metrics like behaviour, demographics, and traffic.
5. Smaller Podcasts Can Reach the Same Audience as Big Ones
Sponsoring smaller podcasts can be just as effective as sponsoring larger ones. Pre- and post-roll ad spots are generally cheaper and take less time. Plus, you can purchase multiple ads on smaller shows for the same cost as one on a larger show. When sponsoring a podcast, trust the host to deliver your message in their own voice.
In conclusion, podcasting is an excellent way to market your business. It’s engaging, authentic, and effective. With the right strategy and measurement tools, you can connect with your audience in a new and powerful way.