2019 Prediction: Big Year for Audio
In 2019, the advertising industry shifted its focus from mobile to audio, with podcast ad spending tripling year-over-year in 2018, podcast listenership soaring from 3.3 million to 48 million between 2013 and 2018, and smart home device adoption reaching 18% of Americans, signaling audio's growing dominance and technological mainstream acceptance.
For many years, the phrase “This is the year of mobile” was common in advertising circles. From the first half of 2017 to the first half of 2018, mobile advertising increased by 42%, according to an IAB Internet Ad Revenue report conducted by PWC. By 2021, mobile video was expected to reach approximately $16.2 billion. Snapchat, the messaging and social media app, recognized the potential of this medium and capitalized on the expanding market.
However, advertisers have shifted their focus. According to industry discussions, this is now considered “the year of audio.”
Out of the roughly 3.6 hours U.S. users spend on their mobile devices each day, 52 minutes—the largest portion—are spent listening to audio, as noted by a Goodway Group article. Podcasts were a major topic in two-thirds of the 2019 discussions at Digital Content Next, a conference for high-quality digital content companies. Both ESPN and the Harvard Business Review brought up the theme unprompted. The trade association even featured Sean Combs (Puff Daddy/P. Diddy) due to his involvement in the audio and music industry.
Ad Spending on Podcasts
Digital Spend on Ads for Podcasts
The number of digital ad dollars spent on podcasts tripled year over year (YoY) in 2018, with more than 144 different podcasts advertising.
Print Ad Spend from Podcasts
Print advertising spend on podcasts also tripled YoY in 2018. The biggest spender was “Fatal Voyage: The Mysterious Death of Natalie Wood.”
Podcast Listeners
Between 2013 and 2018, the number of people listening to multiple podcasts in one month grew from 3.3 million to 48 million, according to Edison Research.
Technology Adoption Life Cycle
A Spring 2018 study by Edison Research and NPR estimated that 18% of Americans now own a Smart Home device. This is significant because it indicates that the technology has moved past the “Chasm” in the technology adoption cycle—a gap that previous technologies like Smart Glasses and 3D TVs did not cross.
As Smart Home devices entered the “Early Majority” phase, Amazon and Google invested heavily in advertising their Amazon Alexa, Amazon Echo, and Google Home products in 2018. Together, they spent over $250 million. Both companies advertised across multiple mediums, including TV, online, mobile, and Snapchat. Amazon advertised its Echo and Alexa on TV and online every month of 2018, dedicating more than 20% of its total ad spend to these products. Google also allocated over 20% of its advertising budget to its Smart Home device, advertising online every month and on TV during the first and fourth quarters.
Spotify versus Pandora versus Castbox
Spotify, Pandora, and Castbox are all competing to be the leading podcast discovery engine. Spotify aims for users to discover and loyally listen to the 170,000 podcasts on its platform through its recommendation tool. Pandora launched its Podcast Genome Project, which recommends shows based on about 1,500 different signals. Castbox has transcribed every word from its podcasts to create a searchable database, allowing users to find shows by topic.
Conclusion
Between 2016 and 2017, podcast ad revenue increased by 86%, according to Ad Age. The Interactive Advertising Bureau (IAB) predicts that revenues will grow to $659 million by 2020.
Ad inventory is scaling, with 67% of listeners preferring host-read ads at the beginning and end of shows. While this presents challenges, advertisers see significant potential.
There are now celebrity-curated playlists, daily news briefs from digital assistants, and branded podcasts. The variety of audio formats and niche audiences provides advertisers with multiple opportunities to engage in 2019.
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The Podcast Market is Steaming Ahead—and Ad Spending is Along for the Ride
Tech giants like Amazon, Apple, Facebook, and Netflix are rapidly expanding their podcasting ventures through acquisitions and new monetization programs—such as Amazon's purchase of Art19, Apple's Podcasters Program subscription model, and Facebook's integration of podcasts into its platform—capitalizing on the growing and diversifying podcast audience to create enhanced advertising opportunities and revenue streams.
Top 10 Brands Investing in Podcast Advertising
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Why Spotify Bought Gimlet: The Power of Podcast Advertising
Spotify's $200 million acquisition of podcast company Gimlet, alongside its purchase of Anchor, reflects its strategic investment of $500 million to expand beyond music streaming into a comprehensive audio platform, leveraging the growing podcast industry and its advertising potential to offer diverse, narrative-driven content and capitalize on the evolving audio market.
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Are Podcasts the Answer to B2B Losses in Print?
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