Spotify’s aggressive push into podcasting isn’t based on a hunch.
According to the latest lofty projection, podcasting revenue is rapidly approaching $1 billion. That’s pretty good for a format that has already died once.
According to The Podcasting Report by Magna, the research and marketplace intelligence unit of IPG Mediabrands, ad spending in podcasting will hit $960 million in 2020 and eclipse $1 billion in 2022. That’s part of a rapid ascent and surge of new programming, with fans increasingly shifting away from linear radio broadcasting.
All this does not mean that podcast advertising will surpass traditional radio advertising any time soon. But advertising in podcasting is growing at a rapid pace, and it’s expected that radio advertising will start to decline in 2020 before embarking on a prolonged decline.
Local radio advertising, in particular, is expected to be hard hit in the coming years. Though advertising for digital audio radio broadcasts and digital audio pure players will continue to increase, podcasting is projected to outpace both.
In total, the audio ad marketplace in the United States is valued in excess of $16 billion, and podcast advertising represents only 3% of this.
By 2022, this share will more than double to 8.2%, according to the projection.
But podcasting is already drawing a premium. The report says that costs per impressions (CPMs) for podcasting are usually higher than rates for other types of broadcast space. This is because the audience for podcasts is relatively small, with growing demand among a diverse group of advertisers. These advertisers are showing an increased interest in doing experiments with podcasts, though supply constraints are hiking rates.
The report further indicates that the prices of podcast ads vary greatly. Pre- and post-roll spots are currently selling from around $10 to $25 per spot and from $20 to $80 for impressions given mid-roll. Some very popular podcasts are charging $70 or more for an ad spot.