The pace of growth for digital advertising may be slowing, but podcast revenue is forecast to grow at a faster clip than digital audio overall. Magna’s latest forecast projects podcast ad revenue will increase 29% in 2019. That’s four-times the 7% growth rate that it is forecasting for overall digital audio ad spending. “Podcasting has graduated from its early portfolio of direct-to-consumer advertisers to attracting an increasingly broad number of brands in various sectors, including consumer packaged goods,” the agency says. Its tally shows podcast advertising revenue totaled $400 million in 2018 to represent 15% of all that was spent by marketers on digital audio.

“Podcast advertising is definitely driving the total digital audio segment as listening increases over time and more advertisers jump into the space,” said Mike Leszega, Manager of Market Intelligence at Magna. Its five-year forecast shows double-digit growth will continue into 2023, at which point the industry’s ad revenue will grow 11% to $950 million. That compares to a 5% growth rate for digital audio advertising overall. Just as noteworthy: Magna estimates that podcasting will represent 25% of all of the money advertisers spend on digital audio in 2023.

Digital ‘Stabilizing’ Audio Revenue

On a macroscale, the Magna report shows audio advertising is holding its own. Magna says the $3 billion in digital audio advertising sales it projects for this year will “help stabilize” the 2.6% slide it estimates for over-the-air radio. Magna says overall audio advertising is on track to total $16.2 billion in 2019, a 1% slip from a year ago.

In terms of digital advertising sales more broadly, Magna estimates digital ad dollars increased 16% during the first quarter. That’s a noticeable drop off after six consecutive quarters where growth was consistently between 19% and 22% every quarter. Magna says it has been expecting that slow down as both volume—things like clicks and active social users—and pricing—as measured by revenue per click or revenue per social user—are cooling down following years of very rapid growth. 

“I think we’ve reached a tipping point with the sheer scale of digital advertising,” Magna EVP Vincent Létang told Adweek. “Nothing can grow for 20% forever.”

Nevertheless, digital had a 52% ad share at the end of last year. And Magna still expects digital advertising to grow by double digits for two more years: increasing 13% in 2019 and up 10% in 2020. Compare that to traditional linear ad sales, which it thinks will decrease by 7% this year in the U.S.—with about half the drop related to the lack of election or Olympics ad spending.

Magna says most ad categories are expected to increase their spending in 2019 and 2020, especially in financial services, food and beverage, and technology. Among the handful of verticals that are expected to reduce their ad levels are the key categories of automotive, retail, and movie studios.