Listen Up! How Podcasts are Changing the Ad Industry

Did you listen to the podcast Serial? With more than 40 million estimated downloads to date, it’s clear that this is one story that people can’t stop talking about. As this true-story murder mystery podcast sweeps the globe, it’s also creating rapid interest and growth in the podcast as a media form. Listen and learn about how podcasts are changing the ad industry.

What is a podcast? You might have spotted podcasts in your iTunes library, though never downloaded one yourself. Podcasts are audio files that you can download or stream through an audio platform (like iTunes, Stitcher, or Podcast Addict) or through web browsers. Podcasts are similar to on-demand television, except for audio — you can listen to whatever podcast show you want, when you want.

How popular are they? Last year, podcast subscriptions surpassed 1 billion. Roughly 15% of all US residents listen to at least one podcast per month, and more than 225,000 podcasts exist. Though podcasts have been around for nearly a decade, it wasn’t until the recent craze over shows like Serial that the medium really took off. Favorites like This American Life, The Moth, and the TED Radio Hour have steadily increased their subscriber numbers for years, creating an audience of listeners dedicated to the podcast platform.

Why Should I/My Brand Care? As podcasts become more popular, they’re also becoming more profitable. Many traditional publishers like NPR, Real Simple, BuzzFeed, and Slate include paid advertising placements in their podcasts; most podcast celebrities accept brand sponsorships and feature paid endorsements during their show.

Brands like LegalZoom, Hulu, Audible, and MailChimp are heavily invested in podcast advertising. Although the cost of a podcast ad is higher than a traditional display ad or even a YouTube video ad (at about $15 to $45 per thousand listens, as opposed to $17 per thousand YouTube views, according to Slate), podcast ads offer unique advantages over other ad forms, such as:

• Audience demographics. If your target audience includes young people with disposable incomes, podcasts could be an appropriate platform. According to a study from Midroll, most podcast listeners are millenials (ages 18-35). Most listeners earn $50,000 or more per year and spend $30+ on entertainment, $150+ on food and nutrition, and $50+ on clothing and fashion every month.
• Authentic endorsements. A podcast host typically delivers a podcast ad directly in his/her own voice. By hearing to a trusted source directly endorse a product or service, listeners are more likely to connect and engage with the brand.
• Attentive audience. Podcast ads flow seamlessly within the actual show content. Furthermore, the podcast medium does not easily lend itself to skipping and fast-forwarding. Thus, podcasts listeners can’t easily anticipate, ignore, or skip over ads — they actually seem to listen to them. In comparison,94% of people skip YouTube pre-roll ads.