Podcast ad buyers have yet to see notable budget cuts from their clients \u2014 though the time of podcasts as the shiny new medium may be coming to an end.<\/p>\n
But podcast ad spend is not seeing the same adjustments yet. Four podcast ad buyers told Digiday their clients\u2019 budgets are not getting slashed. Instead, they are continuing to see an increase in brands\u2019 podcast ad spend.<\/p>\n
A new report out Tuesday from independent podcast hosting and monetization platform Acast [Editor\u2019s note: Not exactly an impartial party] found 65% of the 500 marketers and advertisers surveyed expect to increase their podcast marketing spend year over year. As for marketers who have previously bought ads against podcasts, 83% expect to increase their spend on the medium year over year.<\/p>\n
\u201cPodcast advertising is continuing to experience growth and is still projected to be a $4 billion industry by 2024, so the advertiser interest is undeniable,\u201d Elli Dimitroulakos, Acast\u2019s global head of ad innovation, said in an email.<\/p>\n
Despite the fact that ad buyers remain bullish on the medium, the fervor that swirled around podcasts during the pandemic seems to be settling down to a place where podcasts are considered just one of many channels brands can put dollars into \u2014 rather than the shiny new place to be.<\/p>\n
\u201cSome of the shininess has worn off,\u201d said Molly Schultz, svp of integrated investment at UM. \u201cWe have done so much with the technology around it to make it more similar to everything else we do\u2026 that\u2019s good for many reasons, but it does then take away from that, \u2018This is so different and so new.\u2019 But clients don\u2019t always need that.\u201d<\/p>\n
Billing is up for podcasts is up year over year, said Maria Tullin, vp and managing director of advanced and digital audio at Horizon Media. She is continuing to see an increase in podcast ad spend from both existing and new clients in the podcast space, though she did not provide exact figures to illustrate this.<\/p>\n
Kristen Coseo, director of podcast and digital audio strategy at Ocean Media, said their clients are pulling back from channels like linear TV and reallocating dollars to podcasts. \u201cRight now, podcasts have just been \u2014\u00a0on a performance standpoint \u2014\u00a0killing it for all clients. I don\u2019t think we\u2019ve had one client yet that hasn\u2019t proven successful within [podcasts and streaming audio],\u201d she said.<\/p>\n
Ocean Media quadrupled audio ad spend year over year from 2021 to 2022, Coseo said. \u201cI don\u2019t think we\u2019ll see the same growth that we did year over year last year,\u201d she said. Clients are \u201cstill overly cautious\u201d right now and the \u201csoftness\u201d they\u2019re seeing in other channels will likely trickle into the podcast space. Despite this, Coseo predicts \u201cwe\u2019re going to be spending even more than what we did last year\u201d in podcasts.<\/p>\n
Podcast ad spend from CMI Media Group\u2019s clients \u201chas gone up 10X\u201d in the last year, despite those brands cutting their spend in other channels, said Mark Pappas, svp of innovation at CMI.<\/p>\n
While advertisers remain cautious about creating new budgets at this time, Tullin is seeing clients come in with low test budgets for podcasts, and then returning with \u201cthree-times that budget\u201d and adding podcasts to their quarterly or annual media plans, she said. Peloton and Sleep Number are two existing clients of Horizon\u2019s that have recently handed over their podcast budgets to the agency.<\/p>\n
\u201cOur budgets are staying the course because we\u2019re letting people dip their toe in and then they\u2019re getting excited about it,\u201d she said.<\/p>\n
Compared to last year, Tullin is seeing more performance clients coming in with annual podcast budgets, versus the mostly brand awareness clients they were working with this time last year.\u00a0<\/p>\n
But how can advertisers\u2019 optimism be reconciled with the contraction happening in the podcast production space, with layoffs, cancelled shows and cost cutting<\/a> hitting the industry?<\/p>\n Dimitroulakos believes this is because production companies are moving away from \u201cthe massive multi-million dollar minimum guarantee signings.\u201d But as those large deals that were signed during the pandemic taper off, ads on shows with lesser-known talent \u2014 even those with smaller audiences \u2014 have \u201cmore appealing\u201d prices for advertisers, Coseo said.\u00a0<\/p>\n The buyers Digiday spoke with said there is plenty of ad inventory available despite the recent reports that investment in new and existing shows may be decreasing. Pappas noted that the number of podcast shows on Spotify increased from 4.4 million last year to 5.5 million as of this month.<\/p>\n Coseo is not seeing a decline in the number of shows booked overall for Ocean Media\u2019s clients, and budgets are not being spread out across more shows, she said.<\/p>\n Developments in podcast ad targeting and measurement tools has only improved the ad buying process, especially with the increasing adoption of dynamic ad insertion<\/a>, said Schultz.<\/p>\n In fact, there\u2019s a lot of competition right now to book upfront commitments in the top podcasts, Tullin said. The biggest challenge her team is facing is the \u201cfrantic booking for stuff immediately and then strategic planning for Q2 through [Q4]. We are trying to do all that right now because we want to book things now to get the best, most efficient upfront rates.\u201d<\/p>\n<\/div>\n