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. through Q2 2020.
Here are the key findings:
Podcast advertising is pandemic proof: Ad volumes quickly recover and surpass prior levels
March 2020 was a strong month for podcast advertising with a record number of advertisers and ad detections. When the pandemic itensified in April, the number of unique advertisers dipped -12% from March while total ad occurrences also dropped -12%.
The recovery began immediately.
In May, the number of unique advertisers in podcasting jumped back to March levels. In June, total podcast occurrences grew +8% versus April and the average number of ads per podcast (2.9) reverted to pre-pandemic volumes.
Comparing June to January 2020, the number of U.S. podcast advertisers surged +18% and total podcast ad occurrences are up +15%. The resilience and strength of podcast advertising from Magellan AI’s occurrence data validates the IAB/PwC recent podcast revenue growth forecast for 2020 (+15%) and 2021 (+35%).
Q2 2020 versus Q2 2019: Despite the pandemic, ad volumes and the number of advertisers slightly exceed prior year
With ad volumes, most media platforms would love to be able to have a pandemic-impacted quarter exceed the prior year. That is the amazing feat podcast advertising was able to pull off in Q2 2020.
While the pandemic did depress April 2020 podcast ad activity, Q2 2020 still managed to improve upon prior year performance. The number of unique advertisers in Q2 2020 was +2% greater than Q2 2019 and the total ad occurrences grew by +2%.
Compared to Q2 2019, the number of ads per podcast in Q2 2020 was lower (2.8 versus 3.2) due to the significant increase in episodes being offered by major titles. This is how total ad occurrences can rise while average ads per episode can dip.
Podcast over-commercialism has not arrived
Depending on the TV network, advertising can represent 23% to 27% of programming. According to Magellan AI’s Q2 2020 ad occurrence analysis of the top 400 podcasts, advertising represents only 5% of podcast program content.
The proportion of advertising in a podcast has not grown, nor does it change by the length of the podcast. Podcast advertising stands out given the exceptionally low ratio of ads to content.
Brands rush in: The proportion of brand ads continues to grow
Magellan AI determined the campaign objective (direct response, brand awareness, or tune-in) at the brand or product level based on whether ads for that brand or product included a promotional code or unique vanity URL.
The proportion of brand advertising in podcasting has been steadily rising over the past year. In Q2 2020, 38% of ad occurrences were from brands, up +46% from Q2 2019 (26%).
Top brand advertisers have tripled their podcast weight
Magellan AI finds the number of quarterly podcast ads from the top ten brand advertisers has tripled over the past year. Geico grew from 107 ads in Q2 2019, to 259 ads in Q2 2020. On average, the top ten brands ran 153 podcast ads in Q2 2020, up from 59 podcast ads in Q2 2019.
There is a growing overlap between top podcast advertisers and top network radio advertisers
Three or so years ago, there was little overlap between podcast advertisers and network radio. A Q2 2020 comparison between Magellan AI’s top 200 advertisers and Media Monitors’ top 200 reveals 25 brands in common.
Major network radio advertisers (Progressive, Geico, Capital One, and T-Mobile) are now big podcast advertisers. Conversely, brands that started in podcast advertising (Babbel, Stitch Fix, Sleep Number, and Honey) are now expanding to the mass reach of network radio.
- Podcast advertising is pandemic proof: After a brief April dip, ad volumes and advertisers have surged back and now exceed pre-pandemic levels.
- Brand advertising shows strong growth in podcasts: Major brand advertisers are tripling down on their ad commitments.
- The ratio of podcasts ads to program content is exceptionally low: Only 5% of podcast program content is devoted to ads, a quarter of the network TV ad load.
- Advertisers are embracing an “all audio” approach as more brands use both podcasting and network radio: A Q2 2020 comparison between Magellan AI’s top 200 advertisers and Media Monitors’ top 200 reveals 25 brands in common.
Doug Hyde is the Senior Director, National & Local Insights at CUMULUS MEDIA | Westwood One.
Contact the Insights team at CorpMarketing@westwoodone.com.