Podcasts drive global audio advertising market, report
The audio advertising market was evaluated at $31.811 billion in 2020 and is projected to grow at a CAGR of 5.07% during the forecast period. This is according to a report by Research and Markets.
Audio advertising is the presentation of advertisements in the form of audio records via internet streaming platforms such as podcasts or music streaming applications, and radio channels. In accordance with the rising popularity of audio, advertising through this medium is also gaining popularity, thanks to technological developments and customer demand.
Audio streaming services also saw an increase in the number of users, owing to the COVID-19 pandemic. According to the IAB Internet Advertising Revenue Report, digital advertising increased by 35% to reach $189 billion in 2021. Podcasts have also had a significant impact on the audio advertising market, as audiences have started adopting podcasts as their means of media consumption. However, the rise in the adoption of ad-blockers may prove to be a setback for the audio advertising market and may decrease the overall market demand.
Advancements in audio advertising
Audio is becoming increasingly appealing for brand advertising since it can be presented in an open environment. Earlier this year, Spotify added clickable cards to its digital audio advertisements, allowing users to take action after hearing advertising material. More than 1 million new podcasts were added to Spotify in 2021, accounting for roughly a third of the total podcast inventory (3.2M podcasts). As consumption increases, Spotify aims to make it easier for audiences to understand and interact with advertisements, and also for marketers to extend their reach.
iHeart announced its plan to launch a new digital ad network earlier this year. The iHeart Audience Network (iAN) will gather advertising content across streaming and podcasting from the iHeartRadio database and other premium publishers. With the debut of the new ad network, iHeart claims that advertisers will be able to achieve scale in their digital audio buys, as well as target addressable audiences across numerous channels, devices, and behaviours to pinpoint the proper audience.
Podcasts gaining popularity
With an increase in the adoption of podcasts as a source of audio consumption, audio companies have reported a huge influx of users in the genre. Companies have also reported significant revenue generation from audio advertising through podcasts. According to a report by IAB, podcast ad revenue increased by 19% year-on-year in 2020. Despite the pandemic, revenues from podcast advertising increased to $842 million in 2020, increased from $708 million in the year 2019.
Rise in the prevalence of ad blockers
Ad-blockers have seen a significant increase in demand among users. Ad blockers protect users from malvertising, maintain privacy and also provide a better ad-free experience for users, and are usually free to use. According to Blockthrough, by the end of 2020, there were 257 million PC adblockers and 586 million mobile adblockers.
