CUMULUS MEDIA | Westwood One partnered with Magellan AI, the definitive source of podcast advertising analytics, to analyze podcast advertising occurrence data from the top 400 podcasts in the U.S. Each week’s sample included up to two episodes from shows publishing new episodes.
Here are the key takeaways:
Ads per podcast up only +3%
Podcast over-commercialization has not arrived. From Q4 2018 to Q4 2019, the average number of ads per podcast has increased only +3%. In Q4 2018, there were 3.1 ads per podcast. The number grew 3.2 ads per podcast in Q4 2019, still far fewer messages than the 36 ads per hour on U.S. television as reported by Media Dynamics.
Podcast ads are up +25% powered by episode growth
The total volume of podcasts ads is up +25% (Q4 2019 versus Q4 2018). The vast majority of this growth is due to a +22% increase in the number of episodes. Of America’s top 400 podcasts, the average number of episodes grew from 2.3 in Q4 2019 to 2.8 in Q4 2019. Podcast producers are answering the call of listeners who seek more episodes of their favorite podcasts.
Unique podcast advertisers are up +7%
Magellan AI finds that the number of unique advertisers in the top 400 podcasts has grown from 1,118 to 1,201 from Q4 2018 to Q4 2019, a +7% increase. Here is Magellan AI’s scorecard of key podcast ad occurrence metrics:
Ads comprise less than 10% of podcast time: The longer the podcast, the lower the proportion of ad time
Podcasts under 15 minutes have 1.5 ads, about 7.2% of total content time. Podcasts over 60 minutes have 4 ads, representing only 5.3% of program time. This pales in comparison to television where 25% of a typical hour is devoted to ads and promos, according to Media Dynamics.
Brand advertising differences: IAB/PwC says brand ads represent nearly 50% of podcast revenues while Magellan AI reports brand ads make up 32% of ad occurrences
The big story from last year’s IAB/PwC analysis of 2018 podcasts ad revenues was that the proportion of brand spend (48%) was very close to direct response share of spend (52%). For the last ten years, the engine of podcast advertising was direct response marketers.
However, from an ad occurrence perspective, Magellan AI reports the share of brand advertisers has grown from 24% in Q4 2018 to 32% in 2019, a +33% increase.
How can brand marketers represent half of podcast spend and only 32% of ad occurrences? It is possible that brand clients seek the safety of major shows with big rates and high CPMs.
The use of mid-roll ads in podcasts is on the rise at the expense of pre-roll ads
The share of ad detections in the mid-roll position has grown from 57% in Q4 2018 to 62% in Q4 2019. The pre-roll share of all podcast ads has dropped from 29% to 25% over the same period. Post-roll pod position share of ad occurrences is stable (14% to 13%).
75% of all podcast ads run in comedy, sports, true crime, news, and society and culture podcasts
Comedy podcasts represent nearly one out of five podcast ad detections.
The podcast genres with the highest proportion of brand advertising are music, TV and film, business, and arts podcasts
The podcast genres exhibiting the largest growth in share of brand advertising are history, TV and film, sports, kids and family, business, and true crime
Magellan AI’s Brand Power Ratio ranking reveals music, business, TV and film, arts, and sports genres have the greatest relationship between share of brand ad occurrences and share of total ad occurrences
Sports podcasts represent 22% of all brand ad detections compared to 16% of all podcast ad occurrences. This relationship generates a 1.39 Brand Power Ratio for sports podcasts. Comedy podcasts have one of the lowest Brand Power Ratios at 0.59. 11% of all brand podcast ads run in comedy compared to 18% of all podcast ads.
The top ten brand advertisers have doubled down with a 2X increase in ads run
The number of ads run by podcasting’s top ten advertisers is up slightly compared to the previous year
Many top podcast advertisers also advertise heavily in AM/FM radio to add reach
There was a time when podcast advertisers, mostly direct-to-consumer (DTC) brands, rarely used AM/FM radio or TV. This is changing.
DTC brands are getting priced out of Google and Facebook as cost-per-acquisition soars. The cost-per-acquisition for a $100-dollar product was $15 to $20 three or four years ago. Now it is $40 to $50 to acquire that customer. Given this paid social inflation, brands are turning to AM/FM radio realizing that it can drive both sales and build a DTC brand.
Dr. Byron Sharp, one of the world’s leading experts on marketing effectiveness, concludes that growth “never occurs without the brand increasing the size of its customer base (market penetration), and that requires building mental and physical availability.”
Brands need to be known before they are needed. To achieve Sharp’s “mental availability,” brands need to add reach to their media plans. Adding AM/FM radio’s massive reach to the podcast plan adds scale.
Jack Myers: Podcasting one of the few media platforms to grow in 2020
Jack Myers, the noted media economist, just issued his COVID adjusted advertising expenditure forecasts for 2020. Myers estimates that podcast advertising will grow 8% in 2020, one of the few platforms in positive territory of 21 media categories.
- Ads per podcast up modestly (+3%) from Q4 2018 to Q4 2019
- Total podcast ad occurrences are up +25% powered by episode growth
- Unique podcast advertisers are up +7%
- Ads comprise less than 10% of podcast time: The longer the podcast, the lower the proportion of ad time
- The use of mid-roll ads in podcasts is on the rise at the expense of pre-roll ads
- 75% of all podcast ads run in comedy, sports, true crime, news, and society and culture podcasts
- Brand advertising is growing as a share of podcasts ads as the top ten brand advertisers have doubled the number of ads
- The podcast genres exhibiting the largest growth in share of brand advertising are history, TV and film, sports, kids and family, business, and true crime
- Magellan AI’s Brand Power Ratio ranking reveals music, business, TV and film, arts, and sports genres have the greatest relationship between share of brand ad occurrences and share of total ad occurrences
- Many top podcast advertisers now advertise heavily in AM/FM radio to add reach
Doug Hyde is the Senior Director, National & Local Insights at CUMULUS MEDIA | Westwood One.
Cameron Hendrix is the Co-Founder of Magellan AI.
Contact the Insights team at CorpMarketing@westwoodone.com.