The increase in podcast ad revenue may have been more modest in 2023, but the Interactive Advertising Bureau forecasts the medium will bring in more than $2 billion for the first time in 2024 after cresting the $1b mark only three years ago.
In the IAB’s annual US Podcast Advertising Revenue Study for 2024 prepared by PricewaterhouseCoopers, it was revealed that podcast ad revenues increased modestly in 2023 by 5% to $1.9 billion. This growth, while positive, represents a significant slowdown from the double-digit increases seen in previous years.
The report attributes this deceleration primarily to a challenging advertising environment that particularly impacted mid-tier companies. Despite the overall slowdown, significant advancements were noted among the largest podcast companies, which continued to experience robust growth.
Looking ahead, the IAB predicts a return to double-digit revenue growth, projecting an increase of 12% for 2024, with expectations to reach nearly $2.6 billion by 2026. This is on par with a previous forecast by Acast.
This optimistic outlook is supported by several strategic initiatives undertaken by publishers to fuel growth. These initiatives include enhancing measurement techniques, expanding programmatic advertising, hosting live events, increasing show promotion efforts, and developing video podcast content.
The study highlights that certain genres have shown remarkable resilience and popularity, with comedy and sports podcasts leading the way. The comedy genre, in particular, has seen a significant uptick in advertiser interest, growing its revenue share by four points over the past two years and attracting nearly 300 new advertisers in the fourth quarter of 2023 alone.
This surge is likely driven by the genre’s ability to draw notable personalities and celebrities, which in turn attracts substantial listener engagement.
Sports podcasts remained the second most popular content genre for the second consecutive year, although they experienced a slight decline from 15% in 2022 to 13% in 2023. Both genres are proving to be vital sanctuaries for listeners seeking entertainment and relief from more serious global and national news.
The report also noted a rise in advertising revenue from Consumer Packaged Goods and retail brands, which saw increases of 4% and 5%, respectively. This trend underscores a broader shift among advertisers towards digital platforms that allow for more direct and engaging connections with consumers.
Additionally, the diversity of podcasting content continues to be a unique strength of the medium. More than a quarter of podcasting revenues were generated from niche categories such as government, non-profit, pets, and home improvements.
IAB CEO David Cohen finished by saying, “Podcasts deliver at scale, can pinpoint niche audiences, and have the power to build authentic connections with consumers. And as audience measurement in podcasting becomes more aligned with other digital channels, there’s more growth ahead.”
The full IAB US Podcast Advertising Revenue Study is available on the IAB website.
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