The following is a guest post from Zoe Soon, VP of mobile at the Interactive Advertising Bureau. Opinions are the author's own.
Podcasting is having a moment. Record numbers of consumers are tuning in, and advertiser investment is projected to more than double to over $1 billion by 2021.
A key driver behind this growth is that people are passionate about podcasts. The creators, hosts and publishers care about producing great content and experiences, and, in turn, consumers love podcasts. A BBC study from September also found that people who listen to podcasts while performing other tasks were found to have a higher level of engagement over time. This insight may make podcasting the perfect 21st century digital media experience: It's intimate and engaging, and the ads work better when consumers multitask as they consume.
This year's Podcast Upfront by the Interactive Advertising Bureau (IAB) revealed six key reasons podcasting is well-suited to the times and why this party is just getting started.
Podcasts are still intimate
A recent Digiday article fretted that as platforms like Spotify and Pandora have discovered podcasting, the "small beautiful age is drawing to a close." To say podcasts are gentrifying is an oversimplification. Yes, something that was once considered a cultish underground thing is now going mainstream. But while platforms are making podcasts more discoverable, they remain an intimate 1:1 medium whispering in your ear. The podcast ecosystem is maturing and scaling, but it's also getting better as engagement continues to rise.
Even at increased scale, podcasts are niche and diverse
The continued quality and diversity of podcast programming that debuted at the recent Upfront event was notable. In addition to the standard-bearers of news and true crime, creators are developing programs that tell stories across a wider diversity of styles, formats and perspectives. Shonda Rhimes, who already has a nine-figure TV deal with Netflix, signed a three-year podcasting agreement with iHeartPodcast Network, creating Shondaland Audio in the process. Other TV companies like HBO are also making podcasts with significant success — and not at the expense of smaller pioneering podcasts.
New fans are as engaged as longtime super listeners
The same people who were listening 10 years ago are now listening more than ever. According to an Edison study from earlier this year, new listeners are just as engaged and spend as much time listening as longtime super listeners.
There are ad challenges in such an intimate medium
Dynamic ad insertions that let podcasting revenue scale can be jarring, not unlike the feeling when you're watching a natural disaster on the news and the camera cuts back to a smiling anchor. Artificial intelligence can help with this by looking for sentiment, cadence or other markers to deliver the right ad within context. While there's no magic bullet yet, brands that get in early can reap big rewards. Similar to the early days of Facebook, brands that take advantage of the current low CPM rates of podcasts can reach an incredibly receptive audience at scale.
Podcasts can have a halo effect on the brands that support them
Ira Glass of popular shows "This American Life" and "Serial" put it this way at the Upfront: "There is an intimacy to this medium that carries over to advertisers." In other words, ads feel like more like endorsements than paid placements, and consumers tend to respond accordingly. There's also a relative lack of clutter in the podcast landscape compared to other media. Podcast ads reach people who typically avoid ads and more commonly use streaming services like Netflix and Spotify than traditional channels.
Narrative podcasts can have the same audience power as binge-worthy TV
Podcasts take listeners back to one of humanity's most primitive forms of entertainment: storytelling. Narrative podcasts draw us in with stories and can amass audiences at a fraction of the cost of producing a full-blown TV show or film. Unlike elaborate visual productions that require expensive sets and costumes, podcasting triggers the imagination and engages the theater of the mind.
As podcasting moves into the media mainstream, the engagement, intimacy and quality of the craft are accelerating, and the happy winners in this creative arms race are consumers.