What’s Happening:

Marketing information and guidance company WARC released its Global Ad Trends report in April 2019, which focused on podcasts. The report includes key findings on ad spend, market penetration, audience data and media intelligence, to provide an overview of the state of the global advertising market.


Digging Deeper

Some of the key media intelligence in the report include:

  • Almost one in four adults has watched a gaming livestream in the past month.
  • One in three people worldwide listens to a podcast each month.
  • Flipkart is poised to overtake Amazon as the largest e-commerce platform in India.
  • Three-fourths of consumers have limited their online footprint.
  • Brazil, Canada and Japan have seen the largest growth in influencer marketing.


Podcast Trends

While monthly podcast penetration has reached a third worldwide, some countries have seen higher numbers, such as Hong Kong at 55.4%, Taiwan at 47.1% and Spain at 40.1%. The reasons that consumers listen to and interact with podcasts also vary considerably by country; for example, in China, most listeners do so via paid subscriptions. Educational content is also very popular in China, while in North America the topics of the highest interest are news and political genres.

The relationship between podcast hosts, listeners and advertisers is core to the medium and crucial to their success. More than 58% of podcast ads are integrated into the content and blend in, rather than disrupt.


Podcast Ad Spend

Podcast ad spend is on track to double to $1.6 billion by 2022, according to PwC. When compared with WARC’s media data, this gives podcasts a 4.5% share of global audio ad market spend, up from 1.9% in 2018. WARC reports that the strong growth in podcast revenue won’t necessarily hurt radio. Unlike broadcast radio, podcasts are an on-demand format, with a highly engaged, otherwise hard to reach listener base. Therefore, podcasts offer advertisers an opportunity to reach a distinct audience via a medium they have chosen to engage directly and often have an affinity with.

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“Most ad buys are made on a CPM basis,” said James McDonald, data editor at WARC. “Downloads are relatively easy to monitor, and offer a decent footing for CPM calculations, but more accurate audience measurement is required to unlock future growth.”

Whether this projected growth is realized will depend on the success that brands have with their forays into the podcast format. Most spending is currently coming from smaller experimental marketing budgets, but the interest in this growing market is there.


Other Key Findings for Podcasts

Additional important findings of podcasts for publishing companies in the WARC report include:

  • Podcasts’ share of all audio ad spend in 2022 is 4.5%, up from 1.9% in 2018.
  • The United States has a 22% weekly podcast penetration, equating to 62 million Americans.
  • Worldwide, monthly podcast penetration is 33.5%.
  • The share of podcast ads that are added dynamically, at the point of download, is 41.7%.
  • The share of listeners who use YouTube for podcasts is 53%, compared to 28.8% for Apple and 28.3% for Spotify.
  • The proportion of listeners who do not mind ads as a means of supporting podcast content is a whopping 78%.


The Spotify Takeover

Podcasts are a new medium just emerging as a potentially high-revenue platform. Spotify is doubling down on its content in a quest to become the world’s largest audio platform. Through its in-house Spotify Studios and acquisitions of podcast specialists, the company is investing in the creation of original podcast content. Spotify aims to monetize podcasts through brand sponsorship and programmatic advertising.

“Spotify’s acquisitions of podcasting specialists is seen as a power grab for the lion’s share of this money,” McDonald said. “However, several advancements are required in order for this nascent format to reach its full potential.”

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Sponsorships offer consumers a clear value exchange, McDonald said. “Almost four in five listeners do not mind branded sponsorship of a podcast, because they understand that the messaging supports the content.”

He added that Spotify hopes to cut royalty commitments by creating its content in-house through its own studio. The company is also looking to leverage programmatic delivery of podcast advertising based on its use of data.

“The company hopes these initiatives will boost its growth margin, which is currently around 26%,” McDonald said.


The Bottom Line

With large moves like those by Spotify and the increased popularity of podcasts among audiences worldwide, the platform is forecast for heavy growth and experiments in how best to adopt and monetize it.

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