Can programmatic help podcasts find the money?

In 2023, headlines about podcasting were boom or bust: From Inside Radio’s “Time Spent With Podcast Hits All-Time High” to Bloomberg’s “The Great Podcasting Market Correction.” So, in 2024, what’s it to be?

The fact is, podcasting is one of the fastest-growing digital channels, with U.S. ad revenues having grown 115 percent from 2020 to 2022, according to a 2023 report by the Interactive Advertising Bureau (IAB). And it anticipates exponential growth over the next few years. Yet even as it grows, podcasts have struggled to post revenues, let alone profits, according to research by Deloitte Center for Technology, Media & Telecommunications. “Monetization remains an open opportunity across the audio entertainment market,” it declares.

One opportunity that rarely makes the boom-bust headlines is the growth of the programmatic share of podcast revenue, which has more than doubled year over year to 11 percent in 2023, per the IAB report. Still, that represents only 1 in 10 revenue ad dollars, substantially behind other digital media where programmatic represents nearly 9 in 10 ad dollars. One potential reason for this is that podcast ad inventory remains largely show-specific — often with integrated ads read by the host — which can mean it’s more challenging for advertisers to reach audiences at scale.

However, there are signs that marketers are adapting their strategies within the podcast realm to become more agile. “While many advertisers will still continue to focus on host endorsement, nearly all advertisers I'm speaking to are exploring programmatic opportunities at a minimum to expand their direct relationships,” says Bryan Barletta, a partner at Sounds Profitable. The IAB notes that podcasting is adopting practices already prevalent in other digital channels: A shift of revenue from direct response to brand-building campaigns; the increased usage of dynamic ad insertion, the technology that makes programmatic reach possible; and publisher recognition of the need for brand safety and suitability solutions, to name a few.

Audio streaming networks that have embraced programmatic are reaping positive results. SiriusXM Media saw 28 percent podcast ad growth during its third quarter, outpacing the marketplace, and noted that “podcasting…programmatic specifically” was up 97 percent year over year, as reported in its Q3 2023 earnings. Similarly, PodcastOne delivered record programmatic ad revenue in the company’s history for the second quarter of fiscal year ending March, 31 2024.

“Programmatic is a winning strategy for us in streaming,” Lizzie Widhelm, the SVP of ad innovation and B2B marketing at SiriusXM Media, tells The Current. “We’ve been able to grow programmatic buying as a transaction type faster than anyone else in the space, and now we’re bringing our expertise to podcasts.”

One of the advantages of programmatic advertising across podcast networks is the ability to tap in to audiences at scale, buying beyond a single show. For instance, SiriusXM Media has exclusive advertising relationships with some of the most popular true crime podcasts, including audiochuck’s Crime Junkie.

“It’s an incredible genre. It reaches women at a scale that you can’t find in many other mediums right now, but you go to a marketer and they’re like, ‘I’m hesitant to be around true crime.’ But it’s the best storytelling you can get,” says Widhelm.

Such audience-based buying can allow marketers to target audiences across the deep bench of podcasts that a network like SiriusXM Media offers, reaching beyond the top 20 or 30 shows to less prominent content that may have just as valuable an audience. “We’ll continue to see growth by distributing advertising more evenly throughout our entire network and onboarding new targeting capabilities,” says Widhelm.

This tactic is reflective of the increased use of audience and demographic data, which can allow for more sophisticated targeting types that publishers say their clients are using. For instance, the IAB report says nearly twice as many publishers used audience data overlay in 2023 (77 percent) than in 2022 (38 percent).

Widhelm says brands are getting more comfortable with defining where they want to live in the “conversational space” of podcasting. “We’ve gone to great lengths to build suitability measurement and verification into our inventory and allow for advertisers to buy against GARM [Global Alliance for Responsible Media] standards so that they can get comfortable buying across many different podcasts,” she adds.

This focus is fundamental to the growth of programmatic activation, says Matt Shapo, the director of digital audio and video at IAB. “The dramatic increase in the sophistication of brand-safety ad-suitability tools has been a big part of the growth story in podcasting,” he says.

Another factor playing here is the shift toward leveraging podcasts for brand-building. The podcast medium traditionally drew direct-to-consumer marketers, but as it matures, marketers are likely realizing the storytelling that podcasts allow drives business outcomes. Brand awareness ads, branded content, and brand mentions together now are forecasted by the IAB to grow 13 points in revenue share from 2021 to 2023 (48 percent to 61 percent).

“That statistic shows us that as people in the advertising community began to test brand-building and upper-funnel positioning, they found that they were getting the return and the response they wanted,” says Shapo, who notes that the IAB report shows that podcasters are deploying measurement solutions more typically used with other digital channels — everything from brand and sales lift to audience surveys to pixel-based attribution.

Given that the podcasting space is primed to grow, the opportunities and engagement in the space are “pretty immense,” says Bob Hunt, the senior director of audio at Hearts & Science. “Clients are increasingly seeing podcasting as a medium where they should consider having a presence, even if they don’t have one currently,” he says. “Podcasting is increasingly becoming a greater part of a way to reach people in an ad-supported channel. There are ways to tap in to unique shows and communities that really don’t exist elsewhere.”