As the economy shifts away from expansion to contraction, media consumption and advertising support is uncertain. Podcasting has experienced extraordinary growth in users and financial benefit. By 2024, there could be close to 505 million global podcast listeners.
The world of podcasting has a huge listenership with comedy and true crime taking the top spots for the most popular genres.
This gives businesses a profitable opportunity to capitalize on advertising and influencer marketing.
In fact, podcast ad revenue is expected to exceed $2B in 2023.
The world of advertising is ever-evolving, and as new technologies and platforms emerge, advertisers often shift their budgets to keep up with trends. One area that has seen a decline in spending over the past few years is podcast advertising.
Podcasts have become increasingly popular in recent years. In fact, over half of the US population have listened to a podcast, and one-third of them listen to at least one podcast per month. This popularity has led to an increase in the number of podcast shows available, with a corresponding increase in the number of advertising opportunities.
However, despite the growing listener base and advertising opportunities, advertisers are starting to reduce their spending on podcast advertising. Here are a few reasons why:
1. Limited audience targeting options: Compared to other advertising channels like social media or search advertising, podcasts have limited audience targeting options. Advertisers generally have to rely on the content of the podcast itself to determine whether the audience is the right fit for their product or service.
2. Lack of unified measurement standards: Unlike other advertising channels, podcast advertising lacks unified measurement standards. While several measurement metrics are available, it's difficult to compare them across different shows or platforms. This makes it tough for advertisers to determine the effectiveness of their campaigns.
3. Low conversion rates: While most podcast listeners are highly engaged, they may not be in a buying mindset while listening to a show. This can lead to lower conversion rates for the advertiser, which can impact the ROI of their campaigns.
4. High CPM prices: One of the biggest factors limiting podcast advertising is their cost per thousand (CPM) pricing model. Many podcasts charge high CPM rates, which make it challenging for smaller brands with limited budgets to compete.
In conclusion, while podcasts remain popular among listeners and advertisers, there are several factors limiting their effectiveness for advertisers. Until these issues are addressed, we may continue to see a decline in ad spend in this sector. However, with the rise of new technologies like AI, the possibilities for podcast advertising may evolve and grow in the future.