Podcast Advertising Trends and MythBusters – Separating Fact from Fiction

Listeners and brands alike are recognizing that no other medium is quite as powerful and memorable as audio.  The mobile-first, intimate medium invokes instant reactions and visceral emotional responses, as well as a proven recall of meaningful content.

As podcasts surge in popularity and listenership, they now reach an increasingly diverse      audience worldwide.  Offering a more personal, engaging storytelling medium, consumers across all demographics are flocking to podcasts over broadcast radio, cable TV, social media, and even digital content which has advertisers taking notice.

In fact, brands are turning to audio ads as a way to tailor their message to their target audience due to the growing popularity and audience reach podcasts offer. Insider Intelligence predicted that in 2023, podcast advertising will account for $2.25 billion of ad spend and grow to $3.53 billion by 2026. Additionally, the low cost of creating and placing audio ads is another major draw to the platform.  Audio advertising is more than 90% less costly than other mediums on average, yet it brings brands much closer to their desired demographics.

Contrary to popular belief, the podcast audience is growing rapidly.  62% of the U.S. population over the age of 12, or an estimated 177 million people, have listened to a podcast, and 80 million people of the same demographic are now weekly podcast listeners.  In fact, the portion of Americans who listen to online audio and podcasts have reached record highs according to The Infinite Dial, Edison’s 2023 Report.  183 million Americans have listened to a podcast, tuning in to an average of nine podcast episodes per week, up from eight episodes in 2022.

As a result, brands are investing more in audio advertising.  Podcast ad spending will surpass $2 billion in 2023 and the top ten podcast advertisers spent nearly $300 million combined on the channel last year, according to eMarketer.

The growth of podcasts as a channel is truly astounding, yet there remain several myths and misconceptions that must be dispelled in order for this medium to reach its full growth potential.  Take a look at the following six myth busters that will separate fact from fiction.

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MYTH #1: People Listen to Podcasts to Learn New Things

• While people listen to podcasts to fuel curiosity, most listeners flock to them for other reasons according to the iHeartMedia Podcast Listening Study, 2022. Top reason for podcast followers listen to them is to be entertained, while the second most popular reason was to tune in to learn something new.  Gen Z listeners engage in podcasts to feel connected while millennials listen to podcasts to feel productive. With this in mind, iHeart Media was built with audio-only marketing, reaching a total of 33 million listeners while generating 6X growth from September 2018 to January 2023. Listeners are turning to podcasts for a variety of reasons, which makes it the primary medium for marketers.

MYTH #2: Podcasts Are Not Growing Anymore

• More people are listening to podcasts on a daily basis with double-digit growth across every demographic. According to The Infinite Dial, Edison’s 2023 Report, 42% of Americans have listened to a podcast in the last month, a new all-time high and up from 38% in 2022. The average time spent listening to podcasts has grown from 26 minutes to 57 minutes, according to eMarketer, as podcasts cannibalize time spent on social media and reach more people than Netflix does on a weekly basis.

MYTH #3: There Are Tons of Casual Listeners in Podcasting

• Heavy Listeners are now the new podcast majority according to a 2022 research report from Scarborough. Heavy Listeners and “Super Listeners” now make up 24% and 22% respectively, of all podcast consumers. Podcasts now serve as a mainstream activity as there are over 125 million regular podcast listeners in the U.S. alone.

MYTH #4: Advertiser Interest in Podcasting is Not Comparable to That of Consumers.

• Some may think that the inflated interest in brands wanting to increase their podcast ad spend may not meet the demand of consumers. However, this could not be further from the truth. As stated above, podcast consumers are doubling in size, and advertisers are seeing the market value in paying for audio advertising. Brands are finding that audio invokes an emotional and instant reaction from the consumer unlike that of other mediums. As brands increase their audio ad spend, they should also consider how they can best utilize creative testing in the process. Creative testing can tell brands what’s effective or ineffective about their ads, leading to ads that resonate with the target audience and increase customer buy-in at a more efficient and lower cost.

MYTH #5: Podcasts Are Not Diverse

• On the contrary, diverse audiences are fueling podcast growth because they are offering content that speaks to highly specific demographics. In fact, Spanish language podcasts are currently one of the fastest growing audio programs with additional languages following closely behind.  As more podcast creators tailor content to specific generational speaking preferences, they will customize them accordingly and integrate them in a more meaningful way. Additionally, the diversity of podcast content has grown tremendously over the past few years, allowing for diverse audiences to listen to the shows that address what they’re interested in. While podcasts began as a medium for a niche audience, there are now shows on virtually any topic you can imagine, making it easily accessible and relevant to everyone.

MYTH #6: Podcast Ads Are a Risky Investment

• Audio advertisers use creative testing to determine what’s right and what’s wrong with their ads, leading to improved content that resonates better with the target audience, allowing them to attract loyal customers more efficiently, at a far lower cost. As the market becomes more competitive, testing will be one of the key differentiators for brands looking for a competitive edge.
• Rather than taking an educated guess, testing allows brands to know with certainty that ads contain the necessary features to connect with their specific audiences. Audio ad measurement is coming of age as brands not only tailor sound design, audio logos, and voice changes to create the desired outcomes for audience reach but also create benchmarks to boost conversion rates and ROI. The right benchmarks help brands diversify their ads to engage a wider range of relevant audiences.

Over the past 2-3 years, podcast content has evolved significantly, offering more than just true crime.  This audio content reflects what’s happening in our lives right now: since COVID, there’s been more of an emphasis on comedy and mental health-focused podcasts as listeners seek humor and healing during perilous times.  Branded podcasts have also skyrocketed as they allow advertisers to create long-form content that reaches specific demographics in a deeper, more engaging manner.

This evolution has created richer opportunities for advertisers as the medium has become     dynamic and measurable than ever before.  In tandem, new audience innovations, such as transcription technologies for contextual targeting, dynamic content insertion and programmatic buying, are creating new opportunities for podcast creators.  Thus why we are in the midst of an “audio renaissance” for brands that seek to engage more deeply with consumers via a dynamic and highly customized podcast advertising strategy.

While many myths about podcast advertising exist, research clearly shows its increasing popularity among consumers and brands alike. Audio is the wave of the future for effective ad campaigns. When consumers connect with brands through an audio-only experience, it creates higher engagement and recall for the listener while giving brands more “bang for their buck” for their ad spend. Powerful days are ahead for the future of podcast advertising, and the increased creativity and effectiveness of what we are seeing in audio is only the beginning.

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