The U.S. podcasting industry had a record year in 2017, reaching $314 million in revenue – a figure that’s up 86 percent from the $169 million in 2016, according to new study out this morning from the Interactive Advertising Bureau (IAB) and jointly conducted by IAB and PwC U.S.
The firms are also estimating podcast revenue will see triple-digit 110 percent growth between 2017 and 2020, when revenues will then reach $659 million.
The study also examined what sort of podcasts were benefiting the most from the increased interest in the audio format, as well as what sort of advertisements were preferred.
As you may have guessed (if you spend any time listening to podcasts), host-read ads were the more heavily used ad type, accounting for a whopping two-thirds of all ads in 2017.
Direct response ads transacted on a cost per thousand basis made up the majority of the campaigns, followed by brand awareness ads at 29 percent.
In terms of placement, ads that were inserted or edited into programming accounted for 58 percent of the ad inventory last year, the report also found.
Top advertisers included financial services (18% share of ads), direct-to-consumer retailers (16%), and arts and entertainment (13% of all ads).
However, certain types of podcasts are doing better than others when in comes to raking in the ad dollars.
In fact, the top four content genres, out of the 14 measured, generated over half the advertising revenue in 2017. These were: Arts & Entertainment (17%), Technology (15%), News/Politics/Current Events (13%), and Business (11%).
IAB has particular insight into the podcasting market, thanks to member companies like Audioboom, Authentic, ESPN Radio, Gimlet Media, How Stuff Works, Market Enginuity, Midroll Media, National Public Media, Panoply, Podcast One, PMM, Turner Podcast Network, Westwood One, WNYC Studios, and Wondery, who underwrote the industry study.
And in case you’re suspicious that an ad bureau claiming ads are doing great, the numbers here back up other industry reports confirming the podcast explosion. Nielsen, for example, claims that half of U.S. households listen to podcasts now, including big consumer groups – like beer buyers or new parents – who advertisers want to target.
ComScore, meanwhile, claims 1 in 5 Americans aged 18-49 listen to podcasts at least once per month.
And podcast startups are benefitting from the increased consumer interest in the format, as well. Wondery, for instance, raised $5 million earlier this year from Greycroft, Lerer Hippeau Ventures and Shari Redstone’s Advancit Capital. At the time of the raise, IAB was forecasting $220 million in podcast ad revenue.
HowStuffWorks also raised $15 million last year, as did Gimlet Media; radio broadcaster Entercom bought 45 percent of podcast producer and network, Cadence13 (previously Dgital Media), home to “Pod Save America.” Podcast platform Anchor raised $10 million in 2017, podcast platform Art19 raised $7.5 million, and, this spring, Castbox raised $13.5 million for its podcast app.
Investors wouldn’t be throwing money at the business if there wasn’t potential for more money to be made. And to some extent, those increased opportunities to reach consumers via audio are attributed to the changes in how we listen to audio content – that is, on mobile devices instead of radio, and on smart speakers in the home.
PwC also credits smart speakers and mobile as contributing to the opportunity here.
“The growing trend toward ‘anywhere and everywhere’ media engagement has created tremendous opportunity for digital media, of which podcasting is a significant component,” said David Silverman, a Partner at PwC U.S.m in a statement about the new report. “Whether at home on a smart speaker, at work on a PC, or somewhere in between on a mobile device, more and more Americans are listening while they live, providing a robust podcast platform where advertisers can connect with today’s consumers,” he said.