Dive Brief:
- Podcasting ad revenue in the U.S. grew 26% year-over-year in 2022 to reach $1.8 billion, according to a new report from the Interactive Advertising Bureau (IAB) and PwC. That rate of growth far outpaces the total digital ad market, which was up 11% YoY.
- The IAB said increased macroeconomic pressures have not stymied momentum for podcasts, and the trade group upheld a sunny outlook for future growth. The report projects podcasting revenue will more than double by 2025, reaching nearly $4 billion.
- For the first time since 2018, news programming is no longer the top revenue-generating content genre in podcasting. The channel is now led by sports, society and culture and comedy programming, pointing to its appeal to a diverse array of consumer interests.
Dive Insight:
While it may seem like podcasting has become too saturated with content, it is exactly this category diversification that is fueling more advertising revenue growth, according to the IAB and PwC’s latest survey of the audio streaming market. The report’s findings were also detailed at the IAB’s Podcast Upfront earlier in May.
The low cost of entry into podcasting has resulted in a wide array of content that appeals to niche, passionate audiences. Indeed, 28% of all of podcasting’s 2022 ad revenue came from advertisers across a small collection of categories, including advocacy, home improvement and education. The next highest advertiser category was financial services (14%), followed by arts, entertainment and media (13%) and consumer packaged goods (10%).
“It’s clear now that the growth of podcasting was not just a temporary shift in behavior,” said David Cohen, the IAB’s CEO, in a statement. “The diversity of voices and content — often targeting underserved audiences — is driving more listenership and more time spent, and that is attracting more advertisers.”
The revenue projections are a bright spot for a sector that is feeling pressure after a period of exponential growth. Platforms that invested heavily in the space began the year by freezing budgets, and in some cases, initiating layoffs. NPR in March axed four well-regarded podcasts amid a broader round of cuts. A cooldown in interest was particularly apparent in the news and political opinion podcast vertical in 2022, which declined to command about 12% of the market, according to the IAB.
Despite the IAB touting the growth of niche programming, other research has indicated there is some imbalance in how revenue is spread around. Among the more than 2 million English-speaking podcasts in the U.S., about 44% of ad investments flow to the top 500 shows, according to separate data from Acast. These programs account for 12% of the sector’s monthly reach.
