Primitive ad tech and the perception they are a niche listening behaviour have held publishers back from investing in podcasts, but data suggests that we might be on the verge of a “golden age” for the medium.
Once a fringe add-on, podcasts are now an integral part of many publishers’ offerings. The BBC’s Global News Podcast, The Daily from The New York Times, the Guardian’s Today in Focus and the FT’s News Briefing count millions of listeners between them and regularly feature high up in podcast charts.
With 80% of surveyed industry executives telling the Reuters Institute for the Study of Journalism this year that they will be putting more resources into podcasts and digital audio, it seems that the format is only likely to grow.
“Advertising money is now starting to catch up with listening habits, and as publishers and tech platforms pour more money into content, distribution and advertising technology, we could be on the cusp of a golden age for podcasts,” says Tom Standen-Jewell of media analysts, Enders.
Figures from consultancy Price Waterhouse Coopers suggest that publishers have reason for optimism. According to their analysis, UK podcasting advertising revenue, currently £37m, is set to grow to £64m by 2025 – 16 times more than the £4m that the market was worth in 2016.
Although ad spend projections do not single out news publishers, Robert Clapp, a senior analyst at advertising analysts WARC, says they are helping drive the growth in content and audience that’s key to enticing advertisers.
"News publishers have been key to this as they look to broaden their revenue streams, reach a younger and more diverse audience, and tap into the strong demand from a variety of brands," he says.
Standen-Jewell says that advancements in podcast ad tech are helping move the industry on, as advertisers are now better able to measure their return on investment. Agencies, he says, are reporting unprecedented interest from UK advertisers in podcast inventory.
"Now you have a situation where there is enough progress being made in the technology that podcasts are picking up real momentum. Advertisers now have access to detailed targeting and attribution techniques, are prepared to pay more for podcast ads, and see the medium’s potential to reach large numbers of sought-after audiences," he says.
Although programmatic technology – which uses software to automate the ad selling process – represents a very small proportion of total podcast advertising at the moment, this will grow as the sector matures, says Standen-Jewell.
While ads read by hosts could work as a premium offering, programmatic ads could help smaller publishers who don’t have the same direct advertiser relationships.
But while smaller publishers may benefit from plugging into programmatic marketplaces, Standen-Jewell maintains that it is is not a panacea that will put large and small publishers on an even footing. There will always be parameters set by advertisers in terms of what they want and benefits to scale, he says, making it more effective for the larger players.
Once the domain of smaller advertisers, larger brands are now also looking to get their messages into podcasts, says Standen-Jewell.
"Audio platforms are racing to expand into podcasts. Whereas you used to see most podcast demand from smaller advertisers, now larger advertisers all want to buy podcast ads. It’s not just mattress start-ups or subscription meal kits anymore," he says.
The Guardian: Podcasts an 'important strategic focus'
The Guardian was an early entrant to the world of podcasts and is widely credited with inventing the term back in 2004.
The UK publisher says it has seen global monthly listens to Guardian podcasts increase by more than 60% since February 2020 and its combined podcast network enjoys millions of listens every month.
"Investing in audio journalism remains an important strategic focus as we look to build on our success and develop The Guardian’s audio offering to reach even more people," says Nicole Jackson, director of audio.
Among its most-well known podcasts are Football Weekly, Audio Long Reads and flagship daily news offering Today in Focus, which is one of the UK's top podcasts.
Advertising is central to its podcast monetisation strategy with Visa and Ocado among the brands with which The Guardian has commercial relationships. Imogen Fox, director of advertising, says podcasts are integral to the company's client campaigns and are not just add-ons to a media plan.
Although its podcasts primarily generate revenue through commercials, Fox says The Guardian is currently looking into other ways to generate income such as merchandising and live tours. Football Weekly has held live events for the first time but announced last week it is embarking on its first nationwide tour.
Podcasts: still niche but growing fast
Podcasts are growing faster than any other media, gradually becoming more mainstream. While podcasts in the UK still account for only 5% of audio time, listening is growing quickly.
Research from Enders found that weekly reach almost doubled, from 9% in 2017 to 17% in the third quarter of 2021. The BBC’s move away from a radio first approach to a format agnostic one through BBC Sounds, growing smart speaker ownership and more mobile listening are all helping the format.
And those that are listening, seem to be listening more. A nationwide survey of 3,250 adults commissioned by The Guardian found that 41% of podcast listeners are listening to podcasts more than they were 12 months ago and that audiences are getting younger and more diverse - a key demographic for advertisers.
The same research further found that listeners respond more positively to the adverts they hear on podcasts. Sixty-five per cent of regular podcast listeners said they paid attention to the ads they heard, compared with 39% for adverts on TV and 38% on radio. Over half (51%) of weekly listeners said that hearing advertisements on podcasts made them want to buy what was being advertised – compared to 38% for radio.
Currently, the UK lags behind other markets when it comes to podcast listening, particularly the US where podcasts generate four times as much revenue per head as in the UK.
But even in the US, where the market is most advanced, podcasting revenue still lags far behind other formats. The New York Times, which perhaps has invested more in its podcast offering than any other publisher, commands huge audiences for its podcasts. Its flagship podcast, The Daily, attracts around 4m listeners each day. Revenues, while growing, have some way to catch up. Even fast-declining print advertising is still four times bigger than its podcast ad sales, Press Gazette has reported.
Could publishers take their digital subscriptions successes and replicate this in the podcast world?
Last year Spotify and Apple introduced a subscription mechanism, with functionality allowing listeners to pay creators directly for access. Research suggests that people appear to be willing to pay for audio content they identify with.
These efforts are, however, in their infancy and will have significant teething problems, says Standen-Jewell.
A key issue is who owns the customer relationship, which is why Substack has just added new functionality for creators to produce a paid, subscription-based podcast in the same way they publish newsletter posts to their communities, meaning they own their "own audience".
"If subscription service platforms prevent podcasters from accessing listener data or contacting them directly, this can limit the ability to build audience relationships and listener communities. For media organisations pursuing strategies based on stronger relationships to their brand, this could be a deal-breaker," says Standen-Jewell.