Podcast ad revenue is expected to increase 14.7% this year, about half as much as previously predicted, according to the latest forecast from the Interactive Advertising Bureau.
The IAB initially projected in March, when the Covid-19 pandemic had just begun to spread in the U.S., that podcast advertising would grow by 29.6% this year.
Prior to the pandemic, podcast downloads had been growing 35% year-over-year, before declining sharply in March as Covid-19 changed how most Americans live and work. Downloads started to see an upswing in mid-April, according to podcast measurement company Podtrac.
Total U.S. podcast ad revenue is expected to hit $1 billion this year, as media planners incorporate podcasts into their proposals rather than depending on the scatter market. In all, 47% more brands incorporated podcasts into their annual buys this year.
Podcasting platforms created their own ad marketplaces this year in an attempt to make it easier for media buyers and planners to purchase ad spots across a portfolio of brands. This has included iHeartMedia, which launched an ad marketplace in February and allowing some advertisers to place their ads at the start of every podcast.
Spotify released Streaming Ad Insertion (SAI) in January, which offers analytics and in-app offers. Omnicom Media Group announced a $20 million deal with Spotify last week for ads from its SAI program for the rest of 2020.
And SiriusXM is also doubling down on podcasting, announcing today that it has acquired podcast directory Stitcher from E.W. Scripps for $325 million.
“The addition of Stitcher is an important next step as we continue to develop and strengthen our offering in the fast-growing podcasting market,” said Jim Meyer, CEO of SiriusXM, in a statement. “Stitcher has a talented team with deep experience in the podcast space, and we look forward to working with them to better meet the needs of creators, advertisers and listeners.”
Podcasts’ flexible formats also allow brands to quickly shift ad messages in the news genre, which is a favorite among advertisers, according to the IAB.
The IAB will host its annual podcast upfronts virtually in September. Read the IAB’s revised podcast forecast report here.