Tech companies keep pouring investments into podcasting, but are the acquisitions really worth it?
It sure seems like it.
After some turbulence in listenership last year, habitual listening to podcasts is still on the rise, according to Edison Research’s annual podcast listening report, The Infinite Dial 2021.
Audience diversity is also increasing, encouraging a wide range of content creation.
As listeners and creators flock to the format, tech companies are moving quickly to make room for advertising opportunities.
The Latest Moves in Podcasting Monetization
Amazon, Facebook, Apple, and Netflix are all moving fast as they expand their podcasting footprints.
After acquiring Wondery in October, Amazon has increased its podcast portfolio with the recent acquisition of Art19, a major podcast hosting and monetization platform. This is a noteworthy purchase for Amazon because the company only started offering podcasts last fall. By adding this ad marketplace that targets and inserts ads into programming, Amazon will offer podcasters a more effective way to monetize their work.
Apple is also creating new ways to profit from podcasts. Last week the company launched the Apple Podcasters Program, designed for podcast creators. The program costs creators $19.99 a year, allowing them to easily sell podcast subscriptions to their listeners at the price point that works for them.
Large publishers are already participating in the program, including Amazon’s Wondery, CNN, Fox News, NPR, the Washington Post, Sony Music Entertainment and Three Uncanny Four, and more.
Facebook recently launched a new podcast and live audio stream feature, in which hosts connect their show’s RSS feed to Facebook. This will create News Feed posts for new episodes that appear under a “podcasts” tab for Facebook users. Facebook is slowly launching this feature, and it is not yet available for all creators.
The idea is that, “Facebook will be the place where people can enjoy, discuss, and share the podcasts they love with each other,” according to an email from Facebook to podcast page owners.
Netflix currently has a portfolio of about 30 podcasts that primarily generate content around their original series and films. But there’s talk going around that they’re actively looking to expand their library and will be hiring a head of audio programming shortly.
Spotify recently acquired Podz, a discovery platform. Many users already listen to podcasts for free on Spotify—but this integration will make discovering and following podcasts much easier for listeners. While other tech companies are trying to figure out monetization or expand their content, Spotify is focused on improving user experience.
Spotify already is the top platform for listeners to go to for podcasts, so this move will likely solidify their position, leading to more advertising and subscription opportunities for the platform.
There’s a lot going on in this market. As competition ramps up, how are advertisers investing in the format?
Overall, the number of advertising brands and their collective ad spending are increasing.
Between January and May 2021, there were 3.5k brands spending $222mm in podcasting. In that same time period in 2020, there were 3k brands spending $179.2mm.
This is a 19% increase in ad spend YoY overall. This is a significant increase—but we recognize that comparing this year’s spending to last year’s spending isn’t a fully reliable picture because, well you know… the pandemic.
However, the positive and more telling sign of growth is that monthly ad spending in podcasts has steadily increased each month. May spending was the highest at $51.8mm.
BetterHelp was the top advertiser in podcast advertising Jan – May in 2020 and that hasn’t changed in 2021. Their spend accounted for 3% of all podcasting spend in 2020, and 4% in 2021 so far.
Though top advertisers are returning and investing more, it’s smaller companies with smaller ad placements that are breaking into the podcasting space, driving the increase in ad spend. As tech companies expand their influence in this space and integrate more advanced ad tech, we’ll keep monitoring which types of brands increase their ad buying.
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