At the beginning of 2019, we predicted it would be a big year for audio—and it was.
Ad spending on the medium was up and podcasts became a big topic at Digital Content Next.
Better yet, Midroll Media found that 6 out of 10 podcast listeners purchase based on the ads they hear on their favorite shows. The power of podcast ads was becoming crystal clear.
Today, podcasts and their ads are shining even brighter. A 2022 study found that 38% of the U.S. listened to a podcast in the past month, more than 3x the share recorded a decade earlier.
Advertisers have responded. Podcast ad revenue was expected to reach $2 billion in 2022 and $4 billion by 2024.
What feeds this advertising format?
Their very nature. Many podcast ads are the audio equivalent of native ads, which we know perform well.
Traditionally, host-read ads have attracted the most attention, but they may have to make way for their programmatic counterparts as advertisers seek more efficiency and performance from the format.
The question is: How, exactly, do podcasts connect to programmatic tech?
Programmatic Podcast Ads: What We (Don’t) Know
The conversation surrounding programmatic podcast ads is more complicated than anyone would like.
Case and point: AdExchanger featured two apparently contradictory articles.
One focuses on how programmatic audio took off. The other argued we shouldn’t expect programmatic ads for podcasts just yet.
“As the podcast industry gained steam, it also overcame some technical hurdles,” writes Alison Weissbrot. “As for programmatic, the buying method is still nascent in podcasting but the technology is advancing.”
By way of evidence, Weissbrot points to Panoply’s new programmatic marketplace, Acast’s $35M Series C funding designed to move programmatic forward, and NPR’s foray into listener metrics.
In a phrase, the state of programmatic podcast advertising was still uncertain—and it still is.
According to a Digiday article published in 2023, advertisers are hesitant to buy programmatic podcast ads.
Why? They still love host-read ads, and programmatic technology strips their ability to vet the corresponding content before the ad goes live, i.e., they don’t know where their ad will play.
That said, the downfall of third-party cookies could put a premium on podcast ads as advertisers look for equally effective ways to reach consumers with targeted ads. As that happens, players rolling out programmatic podcast ad tech will have to evolve quickly to meet the rising expectations.
How Podcasts Move Programmatic Tech Forward
The success of programmatic podcast ads revolves around one thing: The technology’s ability to keep up. Advertisers big and small have come to trust programmatic technology elsewhere, which is why ad spending via programmatic means continues to rise.
Programmatic podcast advertising may reach that point, but it must prove itself first.
“The tech infrastructure that underlies much of digital ad buying wasn’t really made for audio,” Ross Benes writes at eMarketer. “The ad industry’s most popular ad servers and ad exchanges were originally designed for display. To ensure that their ad insertions aren’t too clunky, audio streaming platforms have had to build a lot of their ad tech themselves.”
According to some, the tech is coming.
“Standardized measurement will come,” one Spotify automation lead told The Drum. “If you look at video, there are a lot of verification technologies out there. None of these have a metric for audio, yet. As adoption grows and expands, those layers of verification and development will expand.”
Which brings us to our second question: Have podcasts affected advances in programmatic tech?
For their part, Pandora, Apple, and Spotify have dipped their toes into programmatic podcast advertising. Pandora even opened its ad inventory for programmatic buying partway through last year.
More recently, Pandora announced that it reorganized into a cross-platform ad sales team that combines SiriusXM, Pandora and Stitcher.
Lizzie Widhelm, SVP of ad innovation and B2B marketing at SXM Media, said, “We can take the exclusive content we have from Sirius to build new shows, use Stitcher to find new audiences and monetize in a way that makes sense for the intimacy of the podcast medium.”
Meanwhile, Spoify’s ad business is booming.
Despite the hesitation, it’s clear that advertisers are warming up to programmatic podcast ads. As the technology grows stronger and advertisers learn to trust it—like elsewhere in the programmatic world—the sentiment will warm even more.
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