iHeartMedia NEW 200

There is growing momentum for podcasting at iHeartMedia which reports its second quarter podcast revenue jumped 152% from a year ago to $53.4 million. That was better than the 142% growth rate of the first quarter. And for the first half of the year the company says its podcast revenue grew 147% to $91.8 million. Based on current podcast industry revenue forecasts, the numbers suggest nearly two of every ten podcast ad dollars spent in 2021 will be with iHeart.

“Podcasting is the hottest category within digital advertising, it’s the hottest of the hot, and we have a great hand – we’re No. 1 by quite a lead in podcasting,” said CEO Bob Pittman referencing the monthly Podtrac rankings. During a conference call with analysts Thursday, he said podcasting is the “tip of the spear” for iHeart with many advertisers first coming to the company interested in podcasting and then expanding to other digital properties and broadcast radio. 

Pittman said CPMs charged for advertising are similar to OTT streaming television. “Why? Because it’s very hot, he explained, “and people are superior engagement.” He said more people now listen to podcasts than the big streaming music services like Apple Music or Spotify, and the numbers continue to climb. “I think we have a great future ahead of us there on podcasting,” he told analysts. 

With podcast revenues soaring, Pittman called podcasting a “powerful growth engine” for the company and framed the podcast ecosystem for investors. It relies on three interdependent stakeholders: listeners, advertisers and creators, Pittman said, telling them iHeart is the only podcast publisher that has success with all three stakeholders, along with the tools and support that podcast creators need for success. 

“We’re beginning to get the flywheel effect of this success with our audiences,” said Pittman. “The more successful podcasts we have with large audiences, the more effectively we're able to promote new podcasts and new episodes, helping to drive engagement and success for creators and advertisers.”

In terms of advertising, Pittman said he believes as much of a third of inventory is currently unsold and iHeart is building ad tech platform that will allow marketers to target audiences across media channels. 

“It’s a little bit here, it’s a little bit there,” he said. “We are building out the marketplace so people can buy the audience impressions and once they find the audience they want we can help them extend that audience from podcasting to digital audio, and the nirvana is broadcast radio where they can get this phenomenal reach and we always have some unsold inventory.”

It was not just spoken word that is growing online. Podcasting is part of iHeart’s Digital Audio Group which includes its radio station webcasts and music channels. The company said excluding podcasts, the Digital Audio Group’s revenue doubled from a year earlier to $144.5 million during the second quarter. That growth was credited to a combination of increasing demand for digital advertising as well as iHeart improving its abilities to sell its digital audiences and inventory. That included the addition of Triton Digital, which became part of iHeart on April 1 in a $230 million buyout of the digital measurement unit from the E.W. Scripps Company.

Overall, iHeart reported second quarter revenue of $861.6 million, a 77% increase from a year ago when the impact of the pandemic on advertising was most severe. That was better than the 65% growth rate executives had projected earlier. Pittman said the gains were despite “lingering headwinds” of the pandemic.

“The second quarter continues the positive trends we’ve seen in our business and highlights the value of our multiplatform strategy for consumers and advertisers, plus the value of our focus on and investment in ad tech and data,” Pittman said. From grizzled broadcast radio vets to fresh-faced podcast newcomers, Pittman said the company’s employees “set the stage for what we believe is a full recovery to 2019 levels by the end of 2021.”