There’s good news on the horizon for podcast revenue growth, and presumably for radio organizations that are active in that space.
Over the last several years, podcast ad revenues accelerated at a rate “nothing short of stunning,” said Pierre Bouvard, chief insights officer at Cumulus Media and Westwood One. He often blogs in support of radio’s place in the audio arena.
He was commenting in his latest post about a report on U.S. podcast advertising revenues from the Interactive Advertising Bureau and PricewaterhouseCoopers. In doing so, he also noted the ongoing strength of AM/FM radio compared to other audio media, citing separate data from Edison Research.
With expected growth of 14.7% through 2020, the stage has been set for podcast revenues to hit $1.1 billion in 2021, according to the IAB/PwC report.
Commenting, Bouvard wrote, “Even with the impact of COVID-19, 2020 podcast revenues are forecast to come in at 94% of last year’s 2020 prediction. … This speaks to the strength of audio as a powerful platform for both brands and direct response marketers.”
While it remains to be seen what long-term impact the pandemic has on podcast revenues, IAB/PwC still predicts a 15% jump in 2020. This comes after podcast ad revenues soared 48% between 2018 and 2019, a “stunning” growth rate, Bouvard said.
He said podcast advertising has proven to be more resistant than other media against COVID-19 for various reasons, including the medium’s relatively flexible format, which enables quick shifting of ad messaging; the popularity of news content; and the strength of certain ad categories like direct-to-consumer retailers and financial services, which so far are maintaining market strength despite the coronavirus.
The report listed the top-earning formats. The leading genre for U.S. podcast advertisers is news, capturing 22% of revenues. Comedy captured 17% followed by society and culture at 13%, business at 11% and true crime at 9%. More than 70% of that ad spend comes from those five.
The report also found that annual buys were increasing as a percentage of the total, while “scattered” advertising declined illustrating that buyers are looking at the long term.
A key takeaway for Bouvard is that “ad-supported streaming audio has peaked over the last four years with little audience growth. Podcasting has all the audience growth and advertiser interest.”
Bouvard cites Edison Research “Share of Ear” data showing that podcasting audience shares have tripled over four years while Pandora’s are down, Spotify is up slightly and SiriusXM is up — but that AM/FM remains the dominant ad-supported audio platform.
And he said AM/FM radio’s share of ad-supported audio is consistently strong.