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This week’s IAB Podcast Upfront is being held with a tailwind of billion-dollar growth in the industry’s sights. The Interactive Advertising Bureau reported podcast ad revenue soared 72% to $1.4 billion last year and it expects that number to reach $2.1 billion in 2022 -- and top $4 billion by 2024.

“I’m not surprised at the $1 billion because we were forecast to hit that before the pandemic. But the thought that it’s going to double and hit $2 billion this year, that is surprising. But new advertisers are coming into the space all of the time,” said Diana Anderson, Senior VP/Group Director of National Audio at Carat USA during an upfront panel.

Gina Garrubbo, President of NPR’s sales arm National Public Media, said the numbers also reflect that more brands now understand how to harness the power of podcast sponsorship. “They understand how to test creative, how to advance creative, target, use attribution studies to measure, and some are really figuring out how it fits into their media mix while at the same time everyday we have new brands coming in,” she said. “All signs are pretty good.”

Chris Bowlby, Head of Brand Partnerships at AdvertiseCast, said another factor is also at work. He thinks increased brand spending and greater availability of data are “definitely connected” as brand lift and attribution data gives them more confidence in the medium. “It really informs strategy and provides the rationale for marketers,” he said. “The more data we have, the more it’s going to help people to further invest in podcasts.”

Garrubbo agreed that brand lift and attribution studies have been “very effective” in getting marketers onboard. She noted a study that NPR did with Edison Research found that live-read and announcer-read ads both resonate with listeners as long as the ad fits the context of the show, is customized, and is relatable to the listener. Garrubbo also urged marketers to test their audio creative before they start a campaign. “It really helps in terms of making the most impact,” she said.

IAB Media Center VP Eric John said the annual Podcast Advertising Revenue study showed podcast ad categories continue to diversify and more of it is being inserted dynamically rather than being baked-in. “Format wise, we saw announcer-read ads grow its share of revenue up to 40% from 35% in 2020, now also creating more efficient ad creation and deployment,” he said. The IAB’s annual report also showed that the top podcast genres from a revenue standpoint were News, Comedy, and Society & Culture. “And as live sports resume post-COVID, Sports doubled its share of revenue year-over-year,” said John.

Anderson said Carat clients still see the most value in host-read ads. “The people who listen to a podcast consider the host an influencer and they really believe what they are advertising, and that should be the groundwork for any campaign,” she said. But Anderson also thinks pre-recorded ads have a role to play, especially as agencies look to buy ads though programmatic platforms where they are looking to buy across a large number of shows or to easy scale up their reach. “I understand why we’re doing it, but that’s where we are losing some of the specialness of podcasting,” said Anderson.

One of the more surprising findings in the IAB report was a shift in ad placement. While mid-roll ads have long been viewed as the most effective, this year 32% of podcast ad revenue was tied to pre-roll ads compared to 22% a year ago, as dollars moved out of mid-rolls.

Lower CPMs may be a factor, and Anderson said she thinks mid-roll ads will still be the most sought after. “Mid-roll has been the sweet spot and we definitely like to be in that position because you seem like it’s part of the content, especially when it is host- or producer-read,” said Anderson. “But as more advertisers are going into the space and people are buying differently, there may also be an increase in pre-roll. We also see the value in those as well, so I’m not surprised that there was an increase.”

As more marketers come in, Garrubbo said there will also be a need to avoid overloading podcasts -- especially shorter episodes -- with too many ads. That’s especially true for NPR, which research shows has a higher number of ad-avoiders. “Q4 was a very heavy quarter and we chose not to increase ad load,” she said.

Looking ahead, Bowlby cautioned that even though there are robust growth forecasts, among digital advertisers it often takes time for them to digest the reams of data and devise the next media plan. “That process can actually take awhile, so having more information and insights can actually speed up the process for planning and buying teams to set up that next campaign and be back in market for their client,” he said.