Brand Safety and Suitability Solutions Usage Take Off
NEW YORK, Oct. 26, 2023 /PRNewswire/ — Today, IAB released a follow up to its earlier podcast study, which found that U.S. podcast ad revenues grew at a rate more than double the total digital advertising market overall.
Part two of the study, titled U.S. Podcast Advertising Revenue Study 2023: Drivers, Strategies, and Tactics for Growth, reveals the drivers, strategies, and tactics propelling podcast ad revenues, and shows where the market is heading.
“The growing interest we’re seeing in podcasting among larger, brand awareness advertisers demonstrates the medium’s evolution to deliver on a range of buyer’s KPIs,” said Matt Shapo, Digital Audio and Video Director, Media Center, IAB. “Podcasting continues to be a remarkably agile channel that enables advertisers to reach an expanding user base, adopt new functionalities and solutions, and develop new content with creators.”
Key Findings
The report shows that podcasting can deliver on buyers’ KPIs across the funnel: the majority of podcast advertising is used for brand-building, which encompasses 61% of total ad revenues — up 13% in the last two years.
For brand marketers, there’s a lot to like. For example, podcasting usage of brand safety and suitability solutions has nearly doubled since last year, with 69% of publishers using brand safety solutions and 62% using brand suitability solutions, including contextual transcript analysis. As the report also shows, buyers are continuing to expand their range of measurement solutions commonly used with other digital channels for their podcast campaigns.
Another key finding in the IAB study is that dynamic ad insertion (DAI) now represents more than 90% of ad revenues as its share has nearly doubled in the last three years.
“For marketers who need to respond fast to trends and update messaging on the fly — but need a brand-safe and brand-suitable solution — podcasting is a proven winner,” said David Cohen, CEO, IAB. “There’s still real growth ahead.”
Opportunities for Growth
For podcasting to continue this growth, it needs to further develop capabilities to better compete with other digital media channels for buyers’ dollars.
For example, the study shows the industry must continue to invest in creating interconnected networks that offer advertisers both scale and precision. While programmatic has shown significant growth — up 5x from 2021 to 2023 — its share of podcast revenue is still only 11%. For comparison, other digital media channels’ programmatic share is 87%.
Another opportunity for growth is for publishers to rethink their podcast ad inventory and repackage it to help advertisers reach audiences across shows, episodes, and properties. Right now, podcast ad inventory is still primarily show-specific. The kinds of sophisticated, audience-based buys common in other digital media channels only represent 25% of podcast revenues.
Perhaps the most unexpected opportunity for what had been an audio-only channel is video. Users are increasingly consuming podcasts in both audio and video formats, and are leveraging video platforms such as YouTube for podcast discovery and consumption. With video-enabled podcasts representing less than 10% of revenues, there is a major opportunity to engage listeners across environments and expand podcast monetization. The industry needs to create new ad models that align with larger percentages of podcast consumption within video environments.
Shapo concluded, “While there’s significant work ahead for podcasters, there’s more than enough investment from brand marketers to make it worth the effort. Buyers believe in podcasting, and they’re ready to invest more.”
Methodology
Conducted by IAB and PwC, this in-depth quantitative survey of the leading podcast publishers and a series of discussions with industry experts reveals the drivers, strategies, and tactics that are propelling podcast ad revenues, and points to where the market is headed next.
About IAB
The Interactive Advertising Bureau empowers the media and marketing industries to thrive in the digital economy. Its membership comprises more than 700 leading media companies, brands, agencies, and the technology firms responsible for selling, delivering, and optimizing digital ad marketing campaigns. The trade group fields critical research on interactive advertising, while also educating brands, agencies, and the wider business community on the importance of digital marketing. In affiliation with the IAB Tech Lab, IAB develops technical standards and solutions. IAB is committed to professional development and elevating the knowledge, skills, expertise, and diversity of the workforce across the industry. Through the work of its public policy office in Washington, D.C., the trade association advocates for its members and promotes the value of the interactive advertising industry to legislators and policymakers. Founded in 1996, IAB is headquartered in New York City.
About PwC
As business, accounting, and tax advisors to many of the world’s leading technology, media, and telecommunications (TMT) companies, PwC (www.pwc.com/us/tmt) has an insider’s view of trends and developments driving the industry. With approximately 1,200 practitioners serving TMT clients in the United States, PwC is deeply committed to providing clients with industry experience and resources. In recent years, our work in TMT has included helping our clients to develop strategies to leverage digital technology, identifying new sources of financing, and marketplace positioning in industries characterized by consolidation and transformation. Our experience reaches across all geographies and segments, including broadband, wireless, film, television, music, publishing, advertising, gaming, sports, theme parks, computers and networking, software and technology services. With thousands of practitioners around the world, we’re always close at hand to provide deep industry knowledge and resources.
SOURCE Interactive Advertising Bureau (IAB)