U.S. podcast advertising captured $314 million in revenue in 2017, a rise of 86 percent over $169 million in 2016, according to the latest IAB/PwC Podcast Advertising Revenue Study for full-year 2017 released by the Interactive Advertising Bureau. The research predicts podcast revenue will surge to $659 million by 2020, a triple-digit 110 percent hike from 2017. Dan Franks, co-founder of Podcast Movement, tells Radio Ink, “This study confirms what many of us inside the industry already know: podcast advertising works, and revenues are on the rise.”
In self-reported revenues by top podcast companies, revenue continued to rise steadily, growing 94 percent between Q4 2016 and Q4 2017, yielding an 18 percent compound quarterly growth rate. IAB member companies Audioboom, Authentic, ESPN Radio, Gimlet Media, How Stuff Works, Market Enginuity, Midroll Media, National Public Media, Panoply, Podcast One, PMM, Turner Podcast Network, Westwood One, WNYC Studios, and Wondery, underwrote the IAB Podcast Advertising Revenue Study.
Host-read ads were cited as the preferred ad type, representing more than two-thirds of ads in 2017. Direct response ads transacted on a cost-per-thousand basis made up the majority of campaigns, followed by brand awareness ads (29%). In addition, ads integrated or edited into programming accounted for 58 percent of the podcast ad inventory in 2017.
Of the 14 podcast content genres measured, the top four generated more than half of the advertising revenue in 2017:
News/Politics/Current Events (13%)
Drilling down into the category advertisers that are spending on podcasts, financial services took the top spot with an 18 percent share, followed by direct-to-consumer retailers, which accounted for 16 percent, and arts and entertainment at 13 percent.
The reporting methodology includes compiling a database of the largest podcast advertising revenue generators which are believed to make up a significant portion of the overall market, followed by a quantitative mailing survey with leading industry players, including podcast publishers and ad networks. Specific data items are requested and compiled, including quarterly net commissionable advertising revenue by delivery mechanism, advertisement type, campaign type, buy type, pricing model, podcast content genre, and advertising industry category. In addition, a podcast advertising market sizing is performed to deliver a reasonable estimate of the market in the United States, inclusive of non-survey participating companies.
The IAB is hosting a panel at Podcast Movement in July regarding its study: Sizing Up the Opportunity – A Look At Podcast Revenues and Trends. The panel will discuss findings from the IAB/PwC Podcast Revenue study. Four IAB members will discuss the podcast marketplace and cover everything from ad types and advertiser categories to revenue growth and future trends. The panel will be moderated by IAB Audio Industry Expert Jennifer Lane, and include Tyler Moody, Turner Podcasts; Mark McCrery, Authentic and Podtrac; Kelli Hurley, Westwood One; and Bryan Moffett, NPR/NPM.