Per IAB’s U.S. Podcast Advertising Revenue Study, podcast advertising revenue in the United States will surpass $1 billion in 2021 and $2 billion by 2023.
Revenues increased 19% YoY to $842 million in the U.S. in 2020 despite a shrinking economy, the study finds. While the use of dynamically-inserted ads, which enables ad placement at the point of listener download, increased share of revenues from 48% to 67%, announcer-read / pre-produced ads, which also put more control in the buyer’s hand, increased share from 27% to 35% in 2020.
“Podcasting will grow in the next two years by leaps and bounds,” said Eric John, Vice President, IAB Media Center. “Podcast listeners have shown that—even when working from home—podcasts are a preferred medium. Advertisers are benefiting from new technologies developed to serve these marketplaces, to make podcast advertising more dynamic and measurable than ever before.”
In 2020, Direct-To-Consumer brands maintained the top advertiser category market share with 19%.
“The big takeaway from consumer behavior pre, during, and post pandemic is that podcasting has tremendous growth ahead. Consumers love listening and will integrate it into their lives wherever it fits. Advertisers love the flexibility to adjust their messaging on the fly. And most importantly, brands are continuing to shift to podcasting simply because it works: when they run an ad, the cash register rings,” said John.
Late 2020 was also very active in terms of acquisitions in the podcast industry. In November 2020, Spotify announced the acquisition of US-based podcast advertising & publishing firm Megaphone for $235 million. Amazon announced that it has acquired the podcast publisher Wondery and has expanded its original audio content catalog in December.
In the first days of 2021, Twitter acquired podcast platform Breaker for its voice chat feature Spaces.
In addition to ads, podcast subscription has become another monetization model. Spotify announced that it is rolling out paid podcast subscriptions for creators in the United States, a week after Apple unveiled its Apple Podcasts Subscriptions.
According to eMarketer’s latest forecast, Spotify’s US podcast listeners will overtake Apple Podcast’s in 2021. The report estimates that in 2021, 28.2 million people will listen to podcasts on Spotify on a monthly basis, while 28.0 million will listen via Apple Podcasts.