Podcasts: A lucrative financial and marketing opportunity
Starting in the 1980s as the basic, primitive form of ‘audioblogging,’ today’s podcasts are growing day-by-day into a formidable force of digital media.
As with any new medium, a great deal of profits is waiting to be made – one must just know the right content to create and whom to make it for, as well as the right advertisers to attract.
Advertisers are still podcast-shy
A study by the Interactive Advertising Bureau (IAB) found that advertisers committed a measly $314 million to podcast ads last year in the US.
Given this interconnected age of digital media we live in, this figure is still negligible.
As technology news website Recode explains, this number does not compare with the sum spent on TV ads in the US during the same year: $68.5 billion. Internet search ads expenditure reached $22.8 billion, while internet video ads spending reached $11.9 billion. Traditional radio, which is thought to be rivaled by podcasts, made a significant $17.6 billion.
The brands that have adopted podcast advertising, however, are seeing positive results.
Faith in podcasts pays dividends
According to estimates by IAB and PwC, podcast advertising revenue in the U.S. will reach $400 million this year and grow to more than $650 million by 2020, Statista reports.
(Graph by Statista)
As seen above in the graph above, a Nielsen survey found that brands that advertise in Business podcasts saw a 14% lift in purchase intent, tops among other sectors. It is followed by brands that advertise in News & Politics podcasts, seeing a 12.8% rise in purchase intent. Brands advertising in sports podcasts saw similar success.
Nielsen also found that 69% of those surveyed became more aware of the new products/services advertised.
According to Edison Research, 26% of Americans listen to podcasts each month in 2018, compared to 24% in 2017. Approximately 124 million, or 44% of the American population aged 12 and above, have listened to a podcast in 2018.
(Graph by Statista)
The Middle East is slow on the uptake
In the Middle East, podcast adoption has been very slow. Online video content on sites like YouTube has proven much more popular, especially in countries such as Saudi Arabia.
Podcasters are hinging their hopes on record-breaking smartphone penetration in the region, among the highest in the world, to boost revenues.
Furthermore, most people who listen to podcasts are young millennials, who are expected by professional services firm Ernst & Young (EY) to make up 75% of the workforce by 2025. This means that particularly in the Middle East, those that capitalize on the lack of competition in the podcast sector could become household names in coming years, as adoption rates increase.
Podcasts are a product of the internet age
In truth, podcasts aren’t that new. Officially blowing up between 2004-2005, and receiving the support of then-revolutionary iPod, the concept of listening to audio content on the go whenever you pleased seemed irresistible and very next-century like. They excelled over portable radios in that the listener themselves could choose the exact content to download.
Wanted to listen to an audio programme discussing an episode of your favorite TV show? It was possible. Wanted to listen to a Real Madrid-Barcelona match analysis but don’t have the time to listen to a live broadcast? Podcasts were the answer.
This was significantly aided by the rise of broadband accessibility and affordability at the time, as Dial-Up connections were beginning to be phased out.