Podcasts provide advertisers with a wealth of opportunities, so why are media buyers holding back? We recap the benefits for brands and advertisers, as well as exploring what’s stopping media buyers from pressing play on the opportunity on a larger scale. 

The effectiveness of audio advertising has long been known – how many times have you had an annoying ad jingle stuck in your head? Audio is one of the most flexible formats, with consumers able to listen to content indoors doing housework or outside walking the dog, navigating public transport or in the shower via a speaker – you name it, pretty much. 

As well as tuning in simply for entertainment, many people are turning to podcasts to learn more about all sorts of topics, ranging from news and politics to more niche subjects like design or botanics. In the UK, Gen Z’s podcast listening to the Educational category on Spotify surged by 61% between 2022 and 2023. 

According to eMarketer, the average US adult spends over two and a half hours per day listening to audio, but advertisers are only spending 4.5% of their ad budgets on audio – which is mainly directed towards traditional radio channels. Yet, the popularity of podcasts just keeps growing. Despite a slight slow in US ad revenue growth during 2023, the figure was still up 5%. 

US podcast ad revenue is expected to grow twice as fast this year, a report from IAB details. 

So, why are media buyers seemingly holding back? First, let’s recap the vast benefits of podcasts for brands and advertisers. 

The podfluencer effect 

Just as with influencers on social platforms such as Instagram or TikTok, podcast influencers – podfluencers – are extremely influential to their audience. More influential actually, according to Spotify’s 2024 Podcast Trends Tour report: over six in ten research respondents reported trusting their favourite podcast more than their favourite social media influencer. Looking at ads specifically, Spotify found that 48% of Gen Zs and Millennials are more likely to be interested in ads or products when they are promoted by their favourite podcaster. A similar percentage of Gen Z and Millennial respondents said that they trust brands or products being promoted through a podcast’s ads because of their relationship with the hosts. These figures show just how much of a valuable advertising channel podcasts can be for brands and marketers. 

A brand safe, contextual space 

Podcasts are largely a brand safe environment. Advertisers can effectively find trustworthy podcasts by filtering based on risk level, for example. Of course, it's advisable to steer clear from advertising on podcasts which regularly convey disinformation. Some may also prefer to avoid advertising on podcasts which focus heavily on political topics. Going beyond safety to brand suitability, advertisers can utilise GARM’s content ratings to find the right podcast fit for their brand, ensuring their ads align with the content. 

This leads us on to the fact that podcasts are a great contextual targeting environment, ideal to meet the current demand of privacy-conscious advertising – plus, unaffected by Google’s third-party cookie deprecation debacle. Podcasts are an incredibly effective channel for advertisers to deliver messages which are relevant to the context in which they are being listened to, and align particular products or services to certain audiences. Advertising on more niche podcasts can also give marketers access to much harder to reach audiences. 

Low environmental impact 

Another attractive feature of the podcast is its low environmental impact, compared to certain other channels. To start with, creating audio ads generally requires much fewer resources than visual ads like video, for example. Additionally, audio files are also generally much smaller than their video counterparts, so less energy is needed in order to upload, store, and stream them. No advertising is completely emission-free, but audio is certainly not among the worst offenders. 

With so many benefits, why is the podcast ad market still so undervalued by advertisers and not higher on the list for media buyers?

Overcoming measurement challenges 

Many advertisers approach the audio space cautiously. A primary challenge revolves around measurement: podcast advertising falls short when it comes to tracking results. Many advertisers struggle to combine data from podcast platforms with data from other media channels, due to the lack of traditional digital identifiers in the podcasting space. Compared to channels such as social media or TV, the metrics fall short. This is understandably a complication when it comes to analysing overall effectiveness of a campaign, and working out what to optimise and where. Advertisers can be left with no clear ROI investment path to track. On the flip side, the obstacle for podcast producers and distributors is offering buyers a set of equally measured and consistently defined metrics.

Although it doesn’t solve the problem of creating a standardised metric, attention can certainly aid advertisers in their podcast measurement. Luckily, ad tech evolves rapidly. There are now products which provide publishers with the capability to analyse ad placements in their podcast catalogue, producing a quality ranking for high attention spots to be purchased through programmatic buying, for example. With rapid development in the attention space (for other formats), we could potentially soon see attention measurements become standardised.   

Tackling transparency 

Intertwined with the measurement challenges is the lack of transparency within the programmatic podcast ad buying space. This can partly be attributed to the common use of purchasing placements by CPM – which is calculated by episode impressions or downloads. Calculating CPM by the number of episode downloads fails to account for how many times the ad will actually be listened to, as many people may download an episode but not end up listening to it. Matters become complicated due to the offline listening to downloads. Additionally, for new podcast shows, CPM rates are usually based on estimates for impressions/downloads, as it’s not yet known how successful the show will be. This leaves advertisers who choose to invest in a new podcast show in an uncertain situation.  

Last September, Apple’s introduction of iOS17 included an alteration to Apple episode downloads which discontinued the automatic download of episodes for shows that a user had subscribed to. Although this brought down publishers’ metrics in the short term, it was a positive move for advertisers who want a more accurate picture of how many times their ads are being heard. Yet, it still does not guarantee that a downloaded episode has been listened to. As explained by the IAB Tech Lab in a May report detailing technical guidelines for podcast measurement, podcast downloads do not send information about playback, in contrast to other IP-connected mediums which rely on signals to confirm an ad was received. Instead, ad play is calculated based on the analysis of server logs which provide information about what was served. These logs contain details such as file requests for downloaded podcast files, dynamically inserted ads, and content requested by an application. 

The king of audio 

Despite certain issues and limitations for industry members, podcasts are only becoming more popular among consumers. As figures drop for traditional audio channels like radio, we can expect streaming to lead the audio future. With imminent advancements in ad tech assisted by the rapid development of AI, measurement should become easier for advertisers. Looking to the future of audio ads themselves, we’re likely to see increasingly seamless integration.