Podcasts could be worth $1.6bn – or 4.5 per cent – of global audio advertising investment by 2022, almost doubling the $885m expected to be spent this year, according marketing intelligence service Warc.
The increasing spend seems to be the right direction for the industry to take with 78 per cent of podcast listeners understanding the value exchange, saying they don’t mind ads or sponsorship message because understand how this supports the content.
Separate research from Edison found that 54 per cent of listeners are more likely to consider a brand following a podcast ad, while Nielsen research showed that 62 per cent of listeners correctly recall podcast ads, and almost 70 per cent agreed that ads increased their awareness of a product or service.
“The majority of listeners understand the value exchange between podcasts and sponsorships, so brands need to establish a credible relationship between their messaging and the tone of the content to be effective,” said James McDonald, managing editor at Warc Data.
Around the world, 33.5 per cent of people listen to a podcast each month, with the highest penetration rates in Hong Kong (55.4 per cent), Taiwan (47.1 per cent), Spain (40.1 per cent), and the US (33 per cent). The penetration rate in the UK is a lowly 18.1 per cent.
Amongst those listening to podcasts, 63.1 per cent are under the age of 34, while 33 per cent are educated to degree-level or higher, according to GlobalWebIndex
“Podcast advertising holds great potential as it enables brands to reach a highly-engaged, young and affluent audience via a medium they have an affinity with,” said McDonald.
Spotify, which is the third most-popular platform for podcasts, according to GlobalWebIndex, has been investing heavily in podcasts in a bid to diversify its offering further.
The world’s largest music streaming service recently acquired three podcast firms: Gimlet Media, Anchor, and Parcast. And it’s investing in its own in-house original podcasts also.
It’s Spotify’s intention to monetise podcast audiences through brand sponsorship and via programmatic advertising, which only accounts for 12 per cent of its US ad revenue.
“Spotify is betting big on increasing brand investment over the coming years and has moved aggressively to take ownership of the market,” said McDonald. “Smarter, real-time audience measurement and programmatic buys – a cornerstone of Spotify's strategy – will also help to propel investment growth.”