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Remember Podcasting? Listeners Do.

Proving that podcast ads work.

April 24, 2008 | Media & Entertainment

Podcasting is about as long tail as it gets.

Although there are a few highly-rated podcasts with more than 100,000 listeners/viewers, most podcasts have far smaller audiences, highly-focused on niche interests.

According to long-tail theory, these targeted audiences should be especially valuable to advertisers and marketers. Although the audiences are small, each listener or viewer is very interested in the subject, and the audiences should therefore carry commensurately higher ad pricing.

In fact, eMarketer predicts that US podcast ad spending will grow to $435 million by 2012 from $165 million in 2007.

US Podcast Advertising Spending*, 2007-2012 (millions and % change)

That's still a fraction of online spending overall, and the long-tail part of the equation hasn't kicked in yet. Podcast publishers would love to see premium prices, since the medium is far from mainstream.

A December 2007 study by Ketchum and the USC Annenberg Center for the Digital Future found podcasts way down on the list of media consumed by US adults, at 7%. By way of comparison, 60% used search engines.

The Ketchum-USC study looked at all US adults, about one-third of whom do not even use the Internet. But podcasting is a niche activity even among US Internet users.

Universal McCann's "Power to the People: Social Media Tracker" study in April 2008 estimated that just over 14% of US Internet users downloaded podcasts in 2007.

Internet Users in Select Countries Who Download Podcasts, 2006-2008 (% of respondents)

There are other barriers for podcast publishers as well, especially when it comes to charging premium ad prices. Some podcast publishers are still figuring out how to price. Podcast advertising networks simplify this somewhat, but it can still be tough to gauge ad effectiveness.

New data from Podtrac and TNS should help.

The companies studied podcast advertising from February 2006 to March 2008 across multiple product categories and ad types. Unaided awareness for podcast ads was 68%, compared with 21% for streaming video and 10% for television.

“The data suggest audiences are paying close attention to show content and the embedded ads within them which greatly increased ad effectiveness in the studies,” said Doug Keith, president of Future Research Consulting. “The high unaided ad recall figures are no doubt the results of a less cluttered environment.”

“The studies showed a 73% increase in likelihood to use or buy an advertised product," said Velvet Beard, vice president at Podtrac. "The studies showed that 69% of audience members have a more favorable view of in-show advertisers."

“Podcasting is, by its nature, a niche medium, and this is not likely to change," said Paul Verna, senior analyst at eMarketer. "But podcasting delivers a level of end-user engagement that is rare in today’s multi-format world.”

Learn how to make the most of targeted podcast audiences. Read eMarketer's Podcast Advertising: Seeking Riches in Niches report.

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