Podcasts Reach An Inflection Point
In a relatively short time, podcasts have become a viable medium for brand awareness, storytelling, and performance. Instead of fighting for slivers of a niche budget, podcast ad providers now compete for significant pieces of advertisers’ digital budgets.
Mainstream status comes with deeper scrutiny, though. The public flap over the most listened-to podcast pits advertisers’ increasing concern over brand suitability against the medium’s most favored attributes – powerful hosts and brand safety. Couple that with advertisers’ increasing demands for more granular measurement and attribution, and podcasts are at an inflection point.
Interviewed last fall, 53% of advertisers said they are increasing their spending on podcasts this year, with more than half spending more on digital/streaming audio in general. And they’re doing it to fuel both brand and performance advertising. Advertisers recognize the listening audiences are growing and loyal, and they now rank podcasts on par with TV for driving brand favorability.
As with TV, advertisers are also looking for audience scale from podcasts, but not at the expense of program quality. In fact, scale and program quality are the top two criteria driving podcast advertising provider selection, in roughly equal measure. This is important to keep in mind as advertisers turn increasingly to programmatic to achieve greater scale. Sixty percent of advertisers indicated they prefer to buy podcasts programmatically, up from 53% in 2020. In order to balance advertisers’ need for both scale and quality, providers should be prepared to catalogue their inventory with objective scores for hosts, episodes and programs overall for quality and brand suitability.
Equally important will be upgrading measurement and attribution. From the medium’s nascency, podcast providers have relied on basic methods of evaluating performance (e.g., vanity URLs and discount codes) to prove business outcomes. With podcasts now playing in the omni-channel mix alongside more mature digital media types, advertisers are looking for campaign data comparable to what they’re accustomed to with video. Audibility and completion rates are just a start.
Some providers, including Spotify, already deliver streaming-based ad serving and campaign measurement. More will surely follow suit as advertisers want to optimize their media mixes with as much comparable cross-channel data as possible. In fact, 73% of advertisers said they want standardized measurement methodologies. It’s a safe bet that moving towards this goal will keep podcast investment levels trending up.