Ossa Podcast Industry News | July 15, 2020| IAB Gives the Latest Podcast Advertising Stats
Podcast Industry News
Spotify Releases New Charts to Help Listeners with Podcast Discovery
This week in podcast industry news, Spotify announced the introduction of a new feature to their rapidly-expanding podcast platform: Top and Trending Podcast charts. It’s yet another strategic move in Spotify’s ongoing battle-for-the-top with Apple.
By highlighting podcast engagement and growth, Spotify aims to help podcast listeners discover interesting and popular podcasts for their listening pleasure.
Top Podcasts will be a showcase of the top 200 overall most-listened-to podcasts on Spotify. The Top Podcasts charts will be determined by recent listener numbers and updated on a daily basis to give users insight into which shows have longer-lasting influence.
Spotify will also offer the option to view the top podcasts for any given region.
Trending Podcasts will be a list of Spotify’s 50 most-rapidly growing shows. The chart will use an algorithm that blends the discovery of newly-launched shows along with the fastest-climbing podcasts.
The main goal of the Trending Podcasts chart is to help creators secure a place on the charts to help reach a new audience. It will be added to the Spotify mobile app across 26 markets.
Additionally, charts based on category-level data will be available soon in 7 of Spotify’s 26 markets–U.S., U.K., Mexico, Brazil, Sweden, Germany and Australia. Users in these seven markets will be able to view Top and Trending Podcasts by genre — e.g., the top shows in True Crime, Comedy, News, or Education.
The Top and Trending Podcast charts will be replacing Spotify’s existing “Top Shows” chart. By separating popular shows from trending shows–as well as by offering category-level detail in key markets–Spotify hopes to offer their listeners a better podcast discovery experience.
Spotify has successfully used Top and Trending charts for years on their music platform. They have seen the way that top and trending charts can help users find new music and discover new artists, so it’s not a leap to assume that this system will also work for podcasts.
Spotify now has over 1 million podcasts, up from just over 700,000 shows reported in March. Coronavirus may have had an impact on when and where users listen to podcasts, but it hasn’t taken a long-lasting toll on listenership. Spotify said podcast consumption was up by “triple digits” in the first quarter of the year, compared with Q1 2019.
Look out, Apple Podcasts! Spotify continues to bring their A-game.
Podcast Industry News
New Podcast Advertising Stats from IAB’s Podcast Ad Revenue Report
According to the Interactive Advertising Bureau’s annual IAB Podcast Ad Revenue Report, News and Comedy are podcasting’s biggest revenue genres.
The report found that more than $1 of every $5 in podcast advertising revenue comes from shows in the News genre. Based on the $708.1 million industry tally for last year, the News category had total revenue of roughly $156 million. Comedy was second, with 17% of podcast industry revenue.
This ad revenue data is not surprising, because news and comedy were the top genres for listenership in 2020. Top listenership makes news and comedy podcasts attractive to advertisers looking for shows with audiences that are likely to offer strong returns from a reach and engagement standpoint.
With COVID taking a hit on the number of ad dollars spent across nearly all media platforms, news and comedy podcasts have shown impressive resiliency.
The biggest source of those advertising dollars continued to be retail direct-to-consumer (“DTC”) brands, which for a second year accounted for 22% of industry revenue during 2019.
If you’re new to advertising terminology, DTC products are good for direct response advertising– a type of advertising focused on getting people to take an immediate action from an ad while offering a measurable response from that action. The goal from direct response advertising is conversions — for example, how many people heard your Sunbasket meal delivery ad and signed up with your special promo code for $50 on their first 3 months?
After retail DTC, the next-highest source of ad dollars comes from the financial services sector, with a 16% share. This is a six-point drop from last year’s market share, but given the ad spending cuts from COVID across all market segments in the first half of 2020, this still represents a strong performance.
Among the DTC ads, the IAB report showed the biggest advertisers are from the health and wellness, home and appliance, and food and beverage categories.
Among the other big revenue-generating show categories were Society & Culture and Business, both with double-digit shares, and True Crime, responsible for about one of every ten dollars pocketed by podcasters last year.
The data reported by IAB also demonstrated that brand awareness ads have continued to be an important part of the podcast advertising space. Unlike direct response advertising that we discussed earlier, which is all about getting results right now, brand advertising is intended to make your prospects aware of your company so it stays top-of-mind when it comes time to make a purchase.
In 2017, branded ads had a 29% share of all podcast ads, rising to 38% in 2018 and to 42% in 2019.
Chris Bruderle, Senior Director of Research and Analytics at the IAB, says that “Direct response is still the dominant type of advertising in the space, and that makes a lot of sense with the call-to-action abilities. However, with the fact that the podcast space is taking off from a listener volume standpoint, advertisers are finding it to be a platform that can drive some reach and ultimately drive ad recall.
Another unique aspect of podcast advertising reported by the IAB is the fact that advertisers are forgoing the pre-recorded ads that were–and still are–widely used on radio, thus seeing the value in giving podcasters a creative license to promote their products.
Two-thirds of podcast ad revenue last year was tied to host-read commercials, a three percent increase compared to a year earlier. And the revenue tied to pre-recorded ads fell from more than a third in 2018 to slightly more than a quarter last year.
Bruderle points to the fact that host-read ads make it easy to switch out messaging. It’s also a great way for advertisers to tap into the trust and confidence that listeners tend to put into their favorite podcast hosts, with their “halo” over the product being advertised. He expects this trend away from pre-recorded ads to only continue to grow.
“The resiliency to COVID is really impressive — the space is really doing well,” Bruderle said about the industry’s prospects for 2020. “It’s a testament to podcasting as a strong advertising platform overall.”
U.S. podcast ad revenues will near the billion-dollar mark in 2020, which is way ahead of earlier projections that had originally slated the billion-dollar mark for ad revenue in 2023.
The growth rate, however massive, has still been negatively impacted by COVID. The IAB projects industry ad revenue will increase 14.7% this year, down from an earlier estimate of 29.6%.
You can download the complete Interactive Advertising Bureau’s annual IAB Podcast Ad Revenue Report study here.