IAB: Podcast ad revenue grew 86% in 2017 to hit $314M

Dive Brief:

U.S. podcast ad revenue hit an estimated $314 million in 2017, an 86% increase from $169 million in 2016, according to findings from the Interactive Advertising Bureau (IAB) and PwC made available to Marketing Dive. The report, the IAB's second annual Podcast Revenue Study, forecasts that podcast revenue will reach $659 million by 2020, a 110% increase from 2017.
The preferred type of podcast ad was host-read, which made up two-thirds of podcast ads in 2017. Direct response ads accounted for 64.2% of campaign revenue, with brand awareness ads at 29.2%. Ads integrated or edited into programming made up 58% of the podcast ad inventory in 2017, up from 43.6% in the previous year.
The study analyzed 14 podcast content genres, with the top four generating more than half of the ad revenue in 2017: arts/entertainment (17%), technology (15%), news/politics/current events (13%) and business (11%). Financial services advertisers made up 18% of the ad revenue, direct-to-consumer retailers accounted for 16% and arts and entertainment landed at 13%.

Dive Insight:

The IAB's research shows that marketers are recognizing the power of podcasts in reaching a growing number of largely on-the-go consumers tuning into the channel. Monthly podcast listeners have grown from 24% of U.S. consumers aged 12 and older to 26% of that group year-over-year, according to findings from Edison Research. Interest in podcasts has grown to the point that the IAB puts on its own Upfronts for the channel, mirroring similar presentations made by TV networks and digital ad platforms.

A number of brands have started incorporating podcasts into their digital marketing, hoping to reach customers across multiple platforms and devices. American Express said it would run ads in more than 20 podcasts for a global campaign and brand platform it launched in April that highlights how people balance work and personal lives.

Marketers are also investing in the format by creating their own branded podcasts, providing listeners with exclusive content. McDonald's recently released a three-episode "investigative" podcast series with the publisher Gizmodo called "The Sauce." It examined the craze behind the fast-food chain's Szechuan dipping sauce, which it brought back in a bungled promotion after the condiment appeared on the animated series "Rick and Morty." In May, Trader Joe's launched its own podcast focusing on how the company does business, and the high-end retailer Barney's that month released a series called "In Conversation," which features interviews with top designers.

Mobile is driving much of the investment in digital advertising formats, which include podcasts, according to separate IAB research published in May.