The amount of money advertisers will spend on podcast advertising is projected to more than double during the next five years. PricewaterhouseCoopers forecasts $800 million will be spent this year on podcast ads in the U.S. and by 2024 the total will reach $1.7 billion. PwC says podcast revenue continues to grow at a faster rate than either radio or the music industry – it estimates an annual growth rate of 18.8% through 20204 – which it says is a reflection of gains made by podcasters in reaching new listeners. The U.S. accounts for the vast majority of podcast industry revenue. Yet PwC estimates the global growth rate for podcast revenue will be even larger, estimating a 22.2% year-to-year increase through 2024.
Analysts note, however, that the growth rate for podcasters would have been even larger if it were not for the impact of the coronavirus pandemic. “Even before COVID-19, the podcast industry was seeing rapid growth, with monthly listeners reaching 645 million globally in 2019 and advertising revenues growing at a double-digit rate,” said PwC. “In the past year, large media companies have begun to acquire players in what had been a cottage industry to serve customers and protect margins.”
In comparison to podcasting, PwC says the total amount spent on the radio advertising market will drop this year due to the effects of COVID-19 before rebounding in 2021. Radio’s total ad revenue in the U.S. and Canada is expected to fall 17% to $14.8 billion in 2020 from $17.8 billion last year. However, the market is expected to make a quick recovery next year to $17.1 billion before rising to $18.3 billion by 2024. That translates to an annual growth rate of 0.6% between 2019 and 2024, or just a small fraction of what podcasting is expected to experience.
Broadcast radio’s online advertising, which comprises a smaller share of total radio revenue, is expected to grow at a faster 7.1% annual rate. Online spend in 2024 is forecast to reach $2.6 billion, up from $1.7 billion this year. Total online advertising spend will dip to $120.9 billion this year from $125.2 billion last year.
What is occurring in the U.S. is just a piece of how the ad market has been hit around the globe as PwC said advertising is “likely to be a laggard” in this recovery. “In 2020, the entertainment and media industry absorbed the historic shock of COVID-19, which toppled long-standing business models, amplified existing trends and forged new opportunities,” said PwC. “As the global economy shrinks for the first time since 2009 the $2.1 trillion industry is forecast to contract in 2020 by 5.6%”