Podcasts are one of the best ways for brands to advertise their products. Most people tend to trust podcast advertisements over ads via other digital means (like the TV) because podcasts are more intimate and the people who host them are trustworthy. The brands get to generate conversions while podcasters get to make money, so it’s a win-win situation for all.
To gauge the status of the podcast advertising industry, every year, PwC along with IAB release the U.S. Podcast Advertising Revenue Study. Let’s look at what 2023’s report reveals.
U.S Podcast Advertising Revenue Study 2023 By IAB And PWC
Pricewaterhouse Coopers LLP is a British multinational brand of firms that’s considered one of the Big Four accounting firms. They are business, accounting, and tax advisers to several of the world’s leading technology, media, and telecommunication companies and solve important problems by leveraging the leading trends and developments happening within each industry.
The Interactive Advertising Bureau is an advertising business organization in the U.S. that helps marketing and media companies with digital marketing by conducting research, developing industry standards, and providing legal help for them.
This report was written by compiling a database of all the largest podcast advertising revenue generators and conducting a quantitative online survey with leading podcast publishers as well as advertising networks.
Key Statistics From The U.S. Podcast Advertising Revenue Study 2023
In 2022, the entire digital advertising industry faced a slowdown with budget cuts on advertising and marketing. In spite of this, U.S. podcast advertising revenue saw a growth of 26% with a total revenue of $1.8 billion!
The reason for this growth has been attributed to three things:
- An expansion and diversification in the number of podcast listeners as they seek out authentic content from their favorite niches. This has resulted in an increase in the total number of time spent listening to podcasts.
- Podcast producers continuing to put out unique and engaging content to meet the demand of the consumers.
- To capitalize on this, existing brands as well as new brands have increased the amount of money spent advertising on podcasts across multiple ad categories.
U.S. Podcast Ad Revenue Market Size and Growth
- With a year on year growth of +11%, this has become one of the fastest growing digital channels compared to others such as social media, paid search, display, digital video, and digital audio.
- Typically, as the year progresses, the percentage of ad revenue increases, with Q4 often seeing the largest share. However, in 2022, it was the opposite with Q4 seeing the least percentage. This shows how the budget for ad spends decreased as the year progressed.
- The podcast advertising revenue is projected to more than double by 2025 and reach around $4 billion, with 2023 and 2024 also seeing a significant increase.
Advertising Categories and Content Genres
When it comes to podcast ad revenue share by industry, these three categories came out on top:
- Financial services (14%)
- Arts, entertainment, and media (13%)
- Consumer packaged goods (10%)
Out of these, the financial services industry alone saw a minor decrease in share of 1% compared to the previous year, while the other two industries saw a growth of 2%.
The least share was held by these three categories:
- Travel and tourism (3%)
- Professional services for non-business entities (2%)
- Beverages and restaurants (1%)
Compared to last year, travel and tourism as well as professional services for non-business entities saw a growth, while the beverages and restaurants industry further declined.
However, the total highest share (28%) was held by “others,” which includes several low-revenue categories such as energy, government, non-profit, law, tech, pets, and religion, among others.
On the other hand, when it came to the podcast ad revenue percentage by content genre, the top three categories were:
- Sports (15%)
- Society and culture (14%)
- Comedy (14%)
All the three podcast content genres saw an increase in percentage compared to last year.
At the bottom three were these three categories:
- Arts (2%)
- Health and fitness (2%)
- Music (1%)
Out of these, arts as well as health and fitness saw a decrease compared to last year, while the share of music remained the same. Overall, news saw the largest decline, going from 19% to 12%.
What’s surprising is that, for the first time since 2018, news is no longer the top content genre for podcast ad revenue, coming in at 4th instead. The report suggests that this is probably due to the fact that major in-person and live sporting as well as lifestyle events returned after a period of slowdown, while news and political opinion took a backseat. Another possible reason could be that 2021 was an election year, which might have contributed to the waning consumer interest in anything related to news and politics.
Key Industry Developments
Despite all the other digital advertising channels experiencing a slowdown, this report proves that podcast advertising continues to thrive, mainly because of the increase in listenership. In light of this, here are a few key industry developments that the U.S. podcast advertising revenue study highlights:
- Due to advertisers’ demand for contextual audience targeting, programmatic buying – that is, using software to buy digital ad space – will probably grow.
- In 2022, the podcast industry used contextual transcript analysis to aid brands with brand safety and suitability targeting solutions. This year, more and more brands and advertisers are expected to become aware of these solutions and make use of them to increase their brand safety.
- In recent years, the measurement of a digital advertisement has shifted from “an opportunity to see/ listen to the ad” to “attention” and “business outcomes.” Since podcasts usually attract highly interested listeners, advertisers and brands who are looking for ways to target highly engaged people will be more interested in spending money on podcast ads.
What This Means for Brands/ Advertisers and Podcast Hosts
It’s clear that podcast advertisements are the future. Since the pandemic, social interactions have decreased and more and more people have shifted to a hybrid/ work-from-home model. This leaves them with enough time to engage in other activities, such as listening to podcasts from their favorite genres.
It’s because of this that the podcast industry has also been seeing a rise, and, as this report suggests, the number of listeners is only going to keep increasing. This gives brands and advertisers an excellent opportunity to advertise to their target audience – especially millennials and Gen Z – and get a leg up over other brands who are still relying on older advertising methods.
For example, if a sports brand advertises on a sports-related podcast, they are likely to make more conversions since a large percentage of the listeners will be sports fans.
Moreover, podcast ads are unique in the sense that they are both authentic and brought by people’s favorite + trustworthy podcasters.
Want more alternatives to traditional brand advertisements? Check out what user-generated content (UGC) is! This report by TINT also provides further evidence on how well UGC content does when compared to other types of advertisements.