Podcast advertising has shown itself to be incredibly beneficial to both podcasters and businesses. In our previous article on podcast advertising, we highlighted the ad spending of Marc Weldon, a company that spends a quarter of its advertising budget on podcast advertising after a single host-read ad doubled their sales. While podcast listeners are known to make a joke here and there about the nature of podcast ads, they’re usually spoken of without the usuals scorn found in other forms of advertising.
Even with 2020 being a tumultuous year, budgets for podcast advertising have only increased. According to the IAB, this trend doesn’t look to be faltering anytime soon.
The Impact of Podcast Advertising
While the public is more aware of being advertised to than ever before, this doesn’t mean that advertising has lost its impact. Nor does it mean that listeners expect podcasts to go ad-free. CNBC reported that 78% of podcast listeners did not mind ads in their podcast; they’re aware that podcasters need sponsorships to keep running, and do not take issue with sponsored messages or advertising in their content. Stats go on to show that 80% of listeners listen to most if not all of a podcast episode, highlighting that only a fifth of any major audience may click away or skip advertising. And according to MusicOomph, 69% of listeners reported that they were introduced to new goods and services through podcast advertising.
It’s also an excellent way of targeting an audience that may not otherwise be reachable. MusicOomph highlights that podcast listeners are more likely to invest in streaming services like Netflix, Hulu, and Amazon Prime Video, thus cutting down on their exposure to traditional television advertising. 2017 also reportedly saw more money invested in digital advertising than television advertising, though ad-block software means that almost 30% of the potential audience will not see the ads.
Podcast advertising has become so popular with certain brands that listeners sometimes joke about this, which in itself shows the strong brand awareness their ads have provided. These companies have seen amazing returns over the years and now more companies are looking to tap into this success. By taking advantage of an ad format that listeners have generally positive sentiment about and are more likely to pay attention to, you can ensure that your advertising will be more effective at converting listeners into customers.
2019 At a Glance
2019 was a big year for podcast advertising, seeing an estimated 700+ million dollars in revenue (up from the $313 million of 2017), a nearly a 50% increase of ad revenue from the previous year. 66% of 2019’s ads were host-read, showing a decline in pre-recorded ads from 2018. Host-read ads are either dynamically inserted or read as a baked-in ad depending on the podcaster and the advertising agreement. The stats show that listeners tend to prefer the host-read ads over any other type.
2019 also saw some changes in how ads are displayed. There was a rise in ads being 16-30 second long and 61-90 second long (with corresponding drops in ads running shorter than 15 seconds and those 31-60 seconds long). The longer ads play into the effectiveness of host-read ads – the Marc Weldon ad was over seven minutes long, but was also presented in such a way that it entertained as well as advertised.
Overall, there’s been massive growth in ad revenue from 2015 onwards, with trends pointing to further increases through 2020 and beyond.
Podcaster Advertising and COVID-19’s Impact
2020 has been quite a year for everyone, and we don’t need to explain why – COVID-19 is the forefront thought of most businesses. There have been plenty of concerns about its impact on the economy (and what it’s already done). However, there are some things to keep in mind when it comes to ad revenue and 2020.
The economic forecast shows that spending is back on the rise, and expected to bounce back during Q3 and Q4. The IAB states that there is still an expected 14% growth in advertising revenue for 2020. Companies have found ways to continue moving forward, and while many places aren’t running at the same capacity they were this time last year, they’re still doing better than the drop in February-March 2020.
IAB’s stats go on to show that 30% of the yearly revenue is made in Q4, meaning that with the expected bounce back there will be a definite rise in ad revenue coming at that time. At the time of this article being published, there’s plenty of time left in the year for things to veer back upward in terms of revenue. Businesses working to recover profitability for 2020 may particularly benefit from the effectiveness of host-read podcast ads.
The Benefits of Host-Read Ads
Having a podcast host add their own personality to the ad and read their own copy makes the ad itself more personal and natural. The description and the call to action can come from the host’s own experience and will match the tone of the rest of the content.
More than that, host-read ads take advantage of the trust the host has already cultivated with their audience. Their listeners are already going to have a sort of relationship with the host by virtue of choosing their content to consume and hearing their voice regularly. They trust the host enough to keep coming back to them for information or entertainment. Brands understand that while advertising is about creating interest and action, potential customers must first have trust in the brand to turn to the products or services. With podcast ads, you are increasing that trust level more rapidly by building off of the trust they’ve already built with their host.
Host-read ads also mean that the podcast host can take a bigger role in the advertising in general. Cultivating a positive relationship with the host you’re advertising with has nothing but positive results, and thus it is beneficial to allow them a larger role in production of the ad campaign. Brands can work collaboratively to ensure their messaging aligns, but the podcast host generally has a unique insight into what will appeal to their audience.
Where Advertising Can Grow from Here
Ad revenue is still on trend to grow throughout the year, even with the external forces currently present. However, there are a few things to help ensure your advertising lands well with your audience.
- Analyze the pathos behind your advertising. The current emotional climate means that some marketing materials and advertisements may come off as tone-deaf. However, over 40% of the modern audiences have already voiced their exhaustion with marketing based around the pandemic. Focus on highlighting what features you’re advertising and different use cases beyond COVID-19, as these can also reach past the pandemic.
- Focus more on host-read ads and collaborate to create the best listener experience. Obviously, you can have a final say in how your service or product is presented, but your podcast host is going to know your audience best, and will know the best way to speak to them. Giving them creative control over the ad and how it’s presented will help you build upon the host’s relationship with the audience.
Utilizing Dynamic Ad Insertion through PodAds
PodAds is Podbean’s dynamic ad insertion service that gives you the granular control needed to run ads in your own content. Geographically lock your ads and run multiple ad campaigns at the same time with different ads utilizing the same ad time slot, all with their own start and end dates set by you.
Your stat reports through PodAds are all IAB certified, meaning there’s no need to worry that they’re not genuine or correct. To learn more about setting up your PodAds campaign, join our free webinar on monetization!
Podcast advertising has shown to have benefits for both the podcaster and the advertiser. Podcasts reach over 50% of the 21+ audience every month. Combined with the fact that 68% of podcast listeners buy products advertised in podcasts, podcast ads have a high return and help brands reach an audience that is not so easily reached by traditional media anymore.