The news: More advertisers are testing podcasts and publishers are increasing inventory as budgets flow toward brand-building efforts.
1,297 brands tried podcast ads for the first time in Q2, per Magellan AI, with an average spend of $31,400.
Finally, more dollars spent are going toward brand awareness, which accounted for 59% of Q2 spend—down from 63% in Q1, but up 16% YoY and above direct response at 40%.
That higher spending means more ad breaks: Overall ad load reached 8.8% of episode time, close to the 8.1% measured a year prior. The composition of ads changed, too.
Digging in: The $31,400 figure shows that the channel may be attracting experimentation and incremental dollars, rather than huge initial commitments, as brands assess which shows and channels provide the best ROAS.
In addition, declining pod-on-pod advertising means publishers aren’t just stuffing episodes with more self-promotion, which indicates that commercial advertisers are taking a larger share of podcast airtime.
Podcasting has also been closely associated with promo codes, vanity URLs, and host-read performance ads. However, the data shows that brand-awareness investments are driving spending and substantially more sequential growth.
Why it matters: As new advertisers launch modest tests, ad load and brand awareness efforts are increasing. This could create a tension between growth and listener tolerance.
The rise of advertiser ad load amid relatively stable overall ad load shows how podcast publishers are making more room for paying advertisers without significantly changing the overall share of episodes devoted to ads. But as more brands test the channel, publishers may need to balance monetizing that demand against the risk of episodes feeling cluttered.
Recommendations for advertisers: Those testing podcasts should use initial investments to determine which shows, audiences, placements, and genres merit additional dollars before scaling up spend.
As competition for inventory rises, consider ad load when choosing where to advertise: more ads can mean more opportunities for reach, but also more competition for attention and the potential for ad fatigue.
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