Dive Brief:

• Podcasting ad revenue rose 19% to $842 million last year, driven by a 37% gain in the fourth quarter, and is expected to surpass $2 billion by 2023, according a study by the Interactive Advertising Bureau (IAB) and consulting firm PricewaterhouseCoopers. Brand advertising grew its share to 45% of the total, almost matching the 51% share for direct response marketers, the study found.

• Dynamic ad insertions (DAIs) that are placed as listeners download a podcast increased their share of revenue from 48% to 67% last year. Announcer-read/pre-produced ads increased their share of spending from 27% to 35%. Among types of ad creative, host-read spots were still the most popular, making up more than half of total revenue, per the study.

• The study's findings that bigger brands are spending more heavily on podcasts come as Sirius XM Holdings this week said it had created SXM Media to unite its ad sales teams under one roof, per an announcement shared with Marketing Dive. The unit will handle ad sales for SiriusXM, Pandora and Stitcher, the podcast network Sirius XM acquired last year.

Dive Insight:

Podcast ad revenue growth accelerated in the final quarter of last year, indicating that marketers sought to reach audiences who were spending more time listening to audio content on mobile devices and smart speakers. Growth is forecast to continue for at least the next two years as the podcasting audience continues to expand and more brands increase their spending on the format, per the IAB. The growing presence of major brands in the podcasting market is especially significant in affirming the power of the format to capture the attention of consumers. Their spending will likely help to fuel further development of the kind of high-quality content that can support listenership growth.

The enduring popularity of host-read spots shows that brands value podcasters as influencers, helping them to reach audiences of loyal listeners. Meanwhile, the rapid growth in DAIs indicates that marketers seek flexibility in their podcast media buys. DAI technology helps to target audiences based on criteria such as listening habits, geographic region and current weather. Audio platforms including Spotify, iHeartMedia and Pandora offer dynamic audio ads for improved targeting.

The IAB study helps to confirm other reports indicating that the podcasting industry showed a healthy rebound from the early days of the pandemic. Podcasts initially experienced a dip in downloads as fewer people commuted to work during the strictest lockdowns in March and April 2020, before bouncing upward to new highs during the second half of the year, according to measurement firm Podtrac. That decline and recovery mirrored broader trends as brands shifted their spending to digital platforms including podcasts, streaming video and social media, per a separate IAB study.