Podcast Advertising Revenue Projected to Hit $1B by 2021

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The Interactive Advertising Bureau's annual study reports revenue grew 53% to $479.1 Million in 2018.

Podcast advertising revenue grew to an estimated $479.1 million in 2018, up 53% over the previous year, according to a study published on Monday (June 3) by the Interactive Advertising Bureau (IAB).

The study, which reports podcast ad revenue generated in the U.S. only, is prepared annually by PricewaterhouseCoopers (PwC) using survey data reported directly to the firm by companies that sell ads on podcast platforms. It was initiated in 2017 by the IAB’s Audio Industry Working Group.

While PwC doesn’t receive data from every podcast publisher and ad network — this year’s survey received responses from 22 companies representing revenues of $344.7 million — it extrapolates on the data it does receive to come up with an estimate of the size of the total market.

The study further highlights growth in the use of dynamically inserted ads (a.k.a. ads that can be swapped out for different ones at a later date). Those represented 48.8% of all podcast ads in 2018, up from 41% in 2017. Baked-in ads (those that cannot be swapped out) still represent the majority, but their use appears to be shrinking fairly rapidly as the overall market expands.

Elsewhere, the study notes that brand awareness and branded content campaigns accounted for 48.3% of all podcast ads in 2018 (up from 35.7% in 2017), while host-read ads shrank slightly to 63.3% (down from 66.9% in 2017). Meanwhile, 60-second spot lengths were the most popular at 30% of the market, followed closely by 90-second spot lengths at 27%.

In addition to overall metrics, this year’s study breaks down ad revenue by genre. Among the top five categories in 2018, news, politics and current events podcasts generated the highest percentage of revenue at 18.4%, followed by comedy (13.9%), business (12.8%), education (10.6%) and arts and entertainment (10%) podcasts.

The study also dissects ad revenue by business type, with 22.2% of revenue generated coming from direct-to-consumer retail companies, followed by financial services (20.7%), business-to-business (14.1%), arts and entertainment (9.6%) and telecommunications (7.1%) companies.

The podcast advertising market has been expanding rapidly over the last several years and it is expected to continue growing at a fast clip, with this year's IAB report projecting total estimated revenue to reach $678.7 million (up 42%) in 2019 and more than $1 billion in 2021.