If direct response advertisers built podcasting into what it is today, brand advertisers are accelerating the medium’s growth. “If you look at the marketplace, you can see an exciting trend that suggests 2019 will be the ‘year of the brands’ in podcast advertising,” says Westwood One president Suzanne Grimes.
She bases that prediction on a new analysis of data from the annual revenue report released by the Interactive Advertising Bureau and PricewaterhouseCoopers, as well as information pulled in from the network’s annual Advertiser Perceptions study that gauged how marketers are viewing the podcast format. “We found brands are much more active in podcast advertising than meets the eye,” Grimes says in a blog post.
The IAB/PwC data shows that brand advertisers doubled their spending on podcasts in 2018. While direct response ad spending grew at a still healthy 22%, the numbers show it was brand marketers that accounted for three-quarters of the robust 53% increase in total ad spending on the 22 large podcast publishers that provided data to the trade group. Brand advertising is growing five-times faster than direct response ads, it also showed. And while direct response ads made up three-quarters of industry ad revenue in 2016, Grimes says the data shows in 2018 it was nearly evenly split with DR ads maintaining a slight (52% to 48%) advantage.
Westwood One also released results of its latest survey in which it commissioned Advertiser Perceptions to ask advertisers and ad agencies whether they currently spend money on podcasts. Nearly four-in-ten said they do. “The May 2019 study reveals a sharp increase in the proportion of clients in podcast advertising: 32% in 2018 to 39% in 2019,” says Grimes. That’s nearly a doubling of marketers who said they use podcasts in the past three years.
A scan of the list of advertisers that are using podcasts to deliver a brand message to consumers includes several names well known to network and national spot radio. As Podcast News Daily reported earlier this month, Magellan’s list of the biggest brand advertisers during the first quarter was led by Geico, followed by Capital One, Progressive, Procter & Gamble, and True Car.
“While audience measurement challenges remain, it’s clear from those brand awareness advertisers already advertising in podcasts that the medium is attracting major players, and for good reason,” says Grimes. She points to a MARU/Matchbox study conducted in March 2019 that showed podcast ads are least likely to be skipped, compared toall other digital and traditional media. It also showed 85% of “Power” podcast listeners—those who listen five or more hours a week—say they have taken an action after hearing a podcast ad. “Given that brand awareness/branded content spend in podcasts is growing at five times the rate of direct response campaigns, 2019 will be the breakout year for podcast brands awareness campaigns,” Grimes predicts.